Someone Woke Up the Sleeping Giants

When we hear about triple digit growth in MAUs for a mobile app, most people think hot new startup like Uber, Airbnb, Tinder, or Snapchat. Surprisingly enough, the second fastest growing mobile app this quarter was Kohl’s. Yes, the retail giant. The company was the second fastest growing mobile app with 793% growth in 2014, second only to Lyft (835%) and faster than Tinder (737%).

It’s quite unexpected to say the least but it makes sense. Simply directing their huge customer base onto their mobile app would produce huge gains for the company. Another notable contender in the top 10 was Walmart, having grown 342% that year. It goes to show that the sleeping giants have woken, and they’re gearing up to change the playing field.

Kohl’s sales have slumped since its peak in 2010 as it rapidly lost market share to online retailers such as Amazon, Gilt,and Zappos. These nimble companies shook up the retail industry, offering exciting new ways to purchase clothing and goods that capitalized on people’s’ unwillingness to go out for shopping. See Death of the American Shopping Mall.

While online retailers have steadily been growing, Kohl’s sales have slowed significantly since 2010, when it reached over $18 billion in sales. Since then, their sales growth have actually decreased.

So What Changed?

We’ve all been hearing the same advice for years: “Companies need to focus on mobile.” In response, Kohl’s has poured over $1 billion into upgrading their platforms, customer data collection, and back-end fulfillment network according to Yahoo! Finance. In February of 2014, they created a team of 30 people that came together to revamp the Kohl’s app, which has produced impressive growth.

Already a retail giant, Kohl’s took full advantage of their large customer base and funneled it into their app. They also utilized their popular customer loyalty program Yes2You, incentivizing users by tracking rewards and showing how their points would affect prices.

What’s Next for Kohl’s on Mobile?

“The real question is how often are people going to be using these apps? If they’re smart, these retailers can get this adoption and then make it part of the habit of their loyal shoppers.” – Aaron Task, Editor in Chief of Yahoo! Finance

Even with the impressive surge in growth and adoption, Kohl’s still has a long way to go.
The company is taking full advantage of it’s user base, but it’s not going to be enough on its own. The growth doesn’t necessarily mean they’re retaining users, and increasing sales by nearly as much as they could.

Though the app does seem to have a better ratio of one star reviews as compared to before, users are still overwhelmingly rating the app very poorly. With 80-90% of all downloaded apps being used only once, the winners in the app marketplace aren’t those who gain the most MAUs, but those who retain, engage, and convert them into customers. And that is a big challenge on its own.

What the company needs to focus on now is fixing its product to work smoothly, and optimizing it for maximum engagement, retention, and conversions. There are a number of ways to do this, such as focusing on user onboarding, or optimizing their mobile marketing campaigns to take full advantage of the current influx of customers.

For more suggestions, check out our post on 7 things to test in a retail app, where we detail techniques and tests that have shown results for our customers.