Branded Apps Are Connecting with Local Consumers
We’ve solidly entered the era of the branded app as the central platform for successful local loyalty programs. Branded apps, because they encourage and reward repeat business, can be seen as the central hub of a successful localized marketing strategy for many multi-location brands, especially in certain verticals where repeat business is relatively easy to win.
Case in point: the McDonald’s app. The company has offered a branded app since 2015, but the launch of its loyalty program in July 2021 — the first loyalty program in the brand’s history — has caused app downloads to soar. According to the latest data from Sensor Tower, McDonald’s saw the highest rate of new user acquisition of any branded app in the first half of 2022, earning 3 million downloads. Currently, the app is #1 in the Food & Drink category on Apple’s App Store and is also #1 for “top free food & drink” on Google Play.
The McDonald’s app is trending on both Twitter and TikTok, earning accolades like the following from Twitter user @beeeee_02: “I will never eat McDonald’s again without using the app. So many discounts and points.” Many other social media users echo the sentiment, pointing to the free items and discounts that make the McDonald’s app especially popular with younger people who may be struggling to make ends meet. The deals are so appealing that, in the words of Twitter user @kiefluvr, “the amount of times i’ve used the mcdonald’s app to finesse them should be illegal.”
The key drivers of success for the McDonald’s app are not new, and have been tested and tried by branded app pioneers like Starbucks and Chipotle. These include ease of ordering for pickup, contactless payment, and a loyalty program based on points accumulated through purchases. McDonald’s has differentiated itself by leaning in heavily on deals and freebies, creating a community of highly active users who feel they are part of an exclusive club.
McDonald’s has earmarked significant ad spend to promote the app as well; the company’s spending on digital ads is up 124% in July compared to the previous year. Aggressive promotions and advertising are paying off in terms of downloads and engagement, though it’s unclear whether McDonald’s will be able to maintain high levels of user enthusiasm in the long term, given that profit margins for active app users are likely to be lower than for the average McDonald’s customer.
Still, branded apps have clearly become central to the local engagement strategy of many large brands, offering far more control over the user experience, and more perceived value for users, than typical local platforms like Google Maps and Yelp that brands merely “rent space” in.
Food brands are not the only ones benefiting from the rise in branded app usage. Sensor Tower reports that branded app downloads are up 13% overall in Q2 2022 compared to the year before, with airlines, retailers, fitness brands and others benefiting from the trend. The brands with the second and third most downloaded apps so far in 2022 are Planet Fitness with 2.3 million downloads and Home Depot with 1.8 million.
Already known for providing value with memberships starting at just $10 per month, Planet Fitness has designed its app as a toolkit that supplements the gym experience, offering a barcode for checking in at the gym, tutorials on fitness equipment, guided video workouts, and workout tracking that integrates with Apple Health. One especially popular feature is a Crowd Meter that lets users know how crowded it is right now at their local gym.
As for Home Depot, the app offers two types of loyalty programs, one for personal users and another for those purchasing on behalf of a business. Users can shop online for products and select in-store pickup or delivery, track online and in-store orders, and rent tools and equipment. When inside a Home Depot location, users can open the app and select Store Mode, enabling indoor maps as well as barcode scanning to view prices and product information.
Branded apps will naturally be more popular among those who frequently make use of a brand’s products or services, with customers of gyms, hardware stores, and fast food restaurants falling neatly into that category. Grocery stores are another good fit, and indeed we see Sam’s Club and Costco coming in at #9 and #10 on the Sensor Tower list. Another recent study from Apptopia showed that usage of branded grocery store apps rose 77% from May 2021 to May 2022, with price-sensitive consumers looking for better prices on grocery apps in order to mitigate the impact of inflation.
There’s likely a saturation point at which consumers will be unwilling to download yet another branded app, but those tolerance levels may well increase as apps continue to innovate in providing value. Apps for popular retailers and local services now provide a range of useful digital enhancements to the in-store experience and offer brands a powerful tool for cultivating loyalty and repeat business. Some of the most innovative tech in local marketing is taking place today within the branded app ecosystem.