What’s the ROI of Investing in a Custom E-Commerce App?

Key Factors Influencing Ecommerce App ROI

There are some factors responsible for the ROI that influence the ecommerce app. Some of them are mentioned below – 

1. Increase in Purchase:  When it comes to custom ecommerce app development, it provides a tailored shopping experience to the users.  However, the users often visit the ecommerce app and spend more in ordering the product. 
2. High Customer Lifetime Value: Some of the well-known ecommerce applications have reported that they have increased their customer lifetime value five times, with a significant increase in ROI. 
3. Improved Customer Retention: Research shows that there has been a significant improvement in customer retention. However, there is a 70% increase in the customer retention rate. 
4. Personalized Tailored Ecommerce Solutions: “Custom,” as the name suggests, is perfect for tailored suits. What makes ecommerce apps cost-effective in the long term is user satisfaction. 
5. Efficiency: Apart from the sales, there is a significant improvement in the operational efficiency. Most of the companies have reported more than 30 % improvement in terms of custom ecommerce solutions. 
6. Competitive advantage: There are well-known businesses that outperform 2.5 times more by investing in a custom ecommerce app. 

Calculating & Understanding ROI from Custom Ecommerce App

Before moving forward with the benefits of investing in custom ecommerce app development, let us know about calculating ROI for a custom ecommerce app. 

• Basic Calculation: Formula to calculate ROI – (Net Profit – Total Investment Cost) / Total Investment Cost x 100%.
• Metrics Related to Ecommerce: In terms of ecommerce, ROI is generally calculated at least $2 to $3 in revenue for every $1 spent, representing a 200-300% return. 
• Long-Term: The cost of ownership must be lower than the long-term. Custom ecommerce app development offers higher scalability, maintenance, and avoids the template limitations or dependency on third parties. 

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Custom Ecommerce App Development Benefits: How it Drives ROI?

1. Enhanced User Experience

Being a custom ecommerce app, there are more chances that it satisfies the users’ expectations and their needs. However, with enhanced user experience, there are more chances of customer leads and less cart abandonment. This helps to increase the conversion rate. However, to deliver better results, one can offer fast performance, personalization & checkout in a click. 

2. Increase in Average Order Value (AOV)

Integrating with an AI-driven solution with custom ecommerce has been more advantageous to the users. It has helped in personalization, displaying tailored products as per need. And hence, users likely spend more time on the application. However, research shows that personalization helps in increasing revenue by 30%

3. Improved Brand Loyalty

Apps are just a tap for users to explore with the business. Integrating with features like push notifications, gamification, and offering rewards helps to increase customer engagement in the ecommerce app. However, it is more viable to focus more on existing customers as it costs five times less than acquiring new customers. 

4. Efficiency

With a custom ecommerce app, there are fewer chances of errors, speed issues, operational costs, or filling up orders. Due to customization, one can easily integrate with inventory, logistics, and CRM systems. 

5. Data-Driven Decisions

An ecommerce app has valuable data of its users. It helps businesses analyze users behavior, purchasing history and hence accordingly take the smart decisions. Analyzing with everything in depth helps business to implement with the right campaign to run

6. Uniqueness

For a business, who go with custom ecommerce app development can stay ahead in the competition by offering uniqueness to its users. One can integrate with different things like integrating AR/VR model, subscription model and advanced search functionality. This provides a more enhanced shopping experience to the users & also helps in increasing the retention of the existing customers. 

Read More About: How Much Does It Cost to Develop a High-Quality eCommerce App?

Long-Term ROI Factors Associated with Custom Ecommerce App

Apart from the above benefits there are other long term ROI factors associated with custom ecommerce app. Some of them are described below – 

1. Increase Customer Lifetime Value (CLV): There are more chances of retention of customers with custom ecommerce app that in turn boost the CLV
2. Scalability: Custom ecommerce helps your business grow that supports the new market trends, features and currencies.
3. Less Third-Party Platform Dependency: There is no need to rely on third party platforms that may lead to higher profit margins. 
4. Brand Credibility: There is long term growth in the business, with high performance of the app increasing brand equity. 

Future Trends: How to Increase ROI of Custom Ecommerce App

The future trends of ecommerce app is going to boost the online shopping industry. Some of them are – 

1. AI & Machine Learning: Integrating AI into ecommerce app offers with smarter personalized ecommerce solutions, quick chatbots & product recommendations
2. Augmented Reality: This feature allows users to try virtually before buying the product that helps to boost confidence. And there are less chances of returning.
3. Voice Commerce: Making product search on the ecommerce platform at ease by integrating Alexa, Siri, and Google Assistant
4. Mobile-First Payment: Allowing secured mobile payments, digital wallet, pay later etc. 
5. Integrating Omnichannel: Offering seamless shopping experience to users across web, app etc.