The abandonment behaviour of the branded app consumer: A study using interpretive structural modelling approach

Abstract

Marketers are increasingly adopting branded app because of their ability to deliver a distinct and gratifying consumer experience. While the user acquisition and adoption of the branded app is growing exponentially, the rate of app abandonment remains an area of concern. As many as 71 % of users remain inactive within a rolling period of three months; however, limited scholarly research has occurred to understand the causal explanation of this phenomenon. This study attempts to shed light on the reasons for such a high abandonment rate, the factors triggering such behaviors, and their causal relationship through the interpretive structural modelling (ISM) approach. An extensive literature review on the branded app, studies on consumer retention, and responses from 31 domain experts led to the identification of 19 factors and the presentation of a seven-layered interpretive structure to define the underlying causal relationship between these factors. The academic contribution of this paper lies, first, in identifying four new factors (onboarding experience, acquisition offer, value for time, and gestation period) and assimilating them into the extant consumer retention research. Second, this study conceptualizes a new model by integrating two existing theories of the Investment and Relationship Stability Model and the Commitment–Trust Theory. It also aspires to improve understanding of the branded app abandonment among practitioners and accordingly helps in prioritizing their marketing interventions.

Introduction

Mobile applications are rapidly emerging as the most powerful digital marketing tools because of their ability to deliver a distinct and gratifying consumer experience (Bellman et al., 2011; Fang, 2017b; Jin, 2016; Baek and Yoo, 2018; Mondal and Chakrabarti, 2019) and help marketers win the battle of small-screen share. Over the last decade, both smartphone and mobile apps are growing at a phenomenal pace. In 2019, the smartphone penetration of the world has reached 41 % (Statista, 2020a) and the download count of the mobile app has crossed 204 billion in this period (Statista, 2020b). At the same time, there are as many as 2.56mn mobile apps available in Google play whereas 1.85mn available in the Apple apps store (Statista, 2020c). The future projection of the branded app also looks very promising as the overall app economy is expected to grow to $6 trillion by 2021 while the revenue from the in-app advertisement is expected to touch $201 billion by 2021 (App Annie, 2017). Marketers responded to this “mobile-first” consumer evolution by increasingly adopting mobile applications (henceforth branded app) as part of their crucial marketing strategies to perform and enhance marketing deliverables such as selling products, rendering services, communicating their brand values, supporting product innovations, conducting market research and, most importantly, facilitating consumer engagement to foster an ever-enduring psychological and emotional bonds with their consumers (Jin, 2016; Fang, 2017b; Gill, Sridhar, and Grewal., 2018). Brands are also using the mobile app as an extension of self-service technology (SST) and enabling consumers to avail themselves self-service in absence of the firm's service person (Collier et al., 2014; Kaushik and Rahman, 2015; Robertson et al., 2016). Academia also responded to this emerging phenomenon of the branded app as evident in the growing scholarly research work in the last decade (Mondal and Chakrabarti, 2019). Bellman et al. (2011) were the first to introduce this concept in academia after 3 years of the launch of the first mobile apps by Apple Inc. In a recent study, Mondal and Chakrabarti (2019, p.150), combined eight extant definitions of the branded app and proposed a new definition as “a mobile app designed for the purposes of extending brand identity and performs different marketing objectives like placing and selling a product or service, making advertisement or promotion, extending consumer services, and conducting consumer research.” While the interest level of the branded app in academia and practice is growing exponentially (Mondal and Chakarabarti, 2019), marketers are facing stiff challenges to retain the active user base (defined as usage at least once in three months). In two separate reports, Localytics (2017) and Statista (2019) revealed that the average three-month user abandonment rate of a mobile app is 71 % across the globe. This study checked the app abandonment rate for a leading telecommunications company operating in India and found it at a level of 81 % after three months (Fig. 1).

Interestingly, this abandonment rate varies depending on app categories; retail apps score the best with 68 %, business and technology apps are at an average of 71 %, travel and lifestyle apps are at 73 %, and media & entertainment apps are the highest at 77 % (Statista, 2019). While an intuitive reason for such a high abandonment rate could be the download cost of these apps are free, consumers still invest their time, effort, allocate memory spaces of their phones, and incur relevant expenses related to data. On the other side, marketers incur a significant cost to acquire these customers. Nevertheless, such a high level of app-user abandonment across product categories is a critical concern for marketers (Chen et al., 2019)—both the impact of cost and consumer experience. If consumers are churning out due to poor experiences, it may create a negative consumer attitude toward the concerned brand and hurts consumer spending in the long term (Kim et al., 2015; Key, 2017). Thus, practitioners are keen to understand the relevant action points to make continuous usage of a branded app compelling and rewarding (Fang, 2017a). The triggers and reasons for such a high rate of branded app abandonment are not fully clear (Chen et al., 2019; Mondal and Chakrabarti, 2019), though considerable research is available on branded app on adoption, usage intentions of consumers, and the impact of apps on consumer mindshare metrics of brand attitudes, brand considerations, and purchase intentions (Mondal and Chakrabarti, 2019). The above discussion leads to some interesting research questions to analyzing the crucial challenges on branded app stickiness that have not been addressed comprehensively yet by the extant research. First, if various adoption models in the research literature have predicted consumer adoption (download and registration) of the branded app, why would so many consumers drop out within 90 days? Second, what are the key factors triggering such behaviors, and what types of relationships exist among those factors? Third, can these relationships be modeled in a structured framework and be presented in a hierarchical relationship model? Fourth, what would be the perspective of such drop-out behavior from the lens of non-users (Fang, 2019)? However, despite growing research interest in the branded app (Mondal and Chakrabarti, 2019) and the high relevance of the above research questions, no significant attempt has been made to understand this research theme comprehensively. Therefore, seeking answers to the above questions is the core research objective of this study.

The study deployed ‘Interpretive Structural Modelling’ (ISM) and ‘Matrix Impact Cross-Reference Multiplication Applied to a Classification’ (MICMAC) methods to identify the critical factors responsible for the consumer churn of a branded app and categorize them based on their order of interrelationship for constructing an interpretive structural model (Sindhu et al., 2016; Sharma et al., 2018). It is expected that this study will contribute immensely to both the academics and the practicing world. For the academic world, it will extend the understanding of “the anatomy of app abandonment behavior” in a relational structured framework, while practitioners are expected to understand critical factors that influence the retention of the branded app consumers and accordingly prioritize their marketing interventions. The remainder of the study proceeds as follows. The following section discusses and highlights the prior research on the branded app and reviews the relevant factors that influence app abandonment. Section 3 explains the methodology for the solution, and accordingly, section 4 presents the data analysis and findings. Section 5 proposes a conceptual model based on the outcome of the fourth section and discusses the theoretical foundation to render an explanation for it. The academic contribution of this study is in the sixth section and subsequently, the seventh section elaborates the managerial implications. Finally, section 8 presents the conclusion, limitations, and future research directions.