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Mobile Users Spending Up On In-App Transactions

In-app mobile transactions are outpacing upfront app payments, according to Gartner, while younger people are more confident with in-app transactions than their elders.

According to a Gartner online consumer survey, mobile app users spend 24 per cent more on in-app transactions than on upfront app payments, which Gartner states “indicates that the flexibility they offer is delivering a better customer experience than paid-for downloads”.

“Overall, the survey results showed that mobile app users are spending $7.40 on paid-for apps every three months and $9.20 on in-app transactions, resulting in a quarter more spending on in-app transactions,” Gartner research director Stephanie Baghdassarian commented.

“This confirms that once users are confident that an app delivers the expected value without having to pay upfront, they then find it easier to spend on in-app transactions.”

While not all users will activate in-app transactions, those who see the value are more likely to spend higher amounts.

In-app transactions typically drive higher mean spending across all age bands, with the exception of the 35-44 band, in which in-app transactions equal upfront payments, while the gap between the two models is wider among users in the 18-24 and 25-34 segments.

“Younger users are more confident in spending within an app than older users, who are more comfortable with the classic model of buying to own and use,” Gartner observes.

“For mobile app providers, going forward, younger generations are unlikely to lose confidence and expectations about in-app transactions.”

More than 65 per cent of respondents said their spending remained the same across paid-for downloads and in-app transactions, yet, among users who changed spending levels in the last year, 62 per cent have increased their in-app transactions, as opposed to 55 per cent for paid-for downloads.

“There is appetite for in-app transactions, as they allow users to ‘try before they buy’ and validate the offering before committing further,” Baghdassarian commented.

“A great customer experience leads to users advocating a product or service; it also keeps the user a loyal and returning consumer of the service.

“Mobile app providers should consider recurring in-app transaction options, as well as an all-encompassing one-off upgrade to a premium version of the app. A good approach is to sprinkle in extra features that drive in-app transactions along the life cycle of the app, so the user has the choice of what to pay for à la carte, while still offering the option to purchase the full package if desired.”

Meanwhile, according to the survey, in-app advertising has yet to prove that it delivers value to the user, with only 20 per cent of respondents indicating that they “often click on advertisements contained within mobile apps”, while almost two-thirds said they do not click on ads.

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