How Mobile Apps Impact Profitability for DTC Brands

The current state of DTC ecommerce makes owned channels and brand assets a non-negotiable.

Brands need a way to mitigate the rising cost of acquiring new customers, and provide some breathing room when it comes to profitability.

Mobile apps have the potential to make that difference.

Apps have several significant financial benefits for DTC brands:

• Mobile app users convert at 2-3x the rate of mobile web shoppers.
• Push notifications cost $0 compared to rising paid media costs.
• Loyalty-driven apps see up to a 30% increase in repeat purchases.

But are mobile apps a profit machine for every DTC brand? Not always.

In this article we’ll look at how mobile apps can affect your profit margins (for good or for bad), challenges involved with launching your own app, and ultimately help you decide whether an app is right for you.

Let’s dive in.

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Why Major Brands are Launching Mobile Apps

The mobile web experience has evolved greatly over recent years, spurred by changing shopper habits.

Roughly 70% of ecommerce traffic comes on mobile devices. Mobile optimization isn’t secondary anymore. Brands are building mobile-first.

With that comes the potential to provide an even better experience for mobile shoppers, while simultaneously boosting retention through direct access to your customers.

Even apps that do little more than replicate the brand’s website within the app are more convenient to use.

You don’t have to type a URL to get to the store, you’re automatically logged in, and the small improvements by just removing the browser frame and utilizing the whole screen makes a difference.

That’s why shoppers typically convert at a higher rate and spend more in each order in apps, compared to mobile websites.

But the real value for brands comes in retention. 

Holding onto a customer and convincing them to make repeat purchases is so much easier with someone who downloads your app, compared to a mobile web buyer.

You get a direct line to them through the app, and the customer is less likely to forget you when there’s an app icon staring at them on their home screen as a constant reminder.

How Mobile Apps Drive Revenue (and Margin) for DTC Brands

So how do the benefits of branded mobile apps directly lead to revenue—and more importantly, profit?

Let’s check it out now.

Higher Retention and Customer Lifetime Value

Every DTC operator knows that retention is far cheaper than acquisition. 

The real power of apps lies in their ability to keep customers engaged over time.

App users on average place 2-3x more orders than mobile web shoppers, and consistently display higher engagement over the entire customer lifecycle.

This is largely thanks to push notifications.

Push notifications are perhaps the most undervalued asset in the DTC toolkit. Unlike expensive retargeting ads that eat into margins, push notifications cost nothing to send and generate immediate revenue.

App-based loyalty programs also deliver long-term engagement boosts, by creating structured incentives for repeat purchasing. 

These programs work better in apps because:

• Points balances and rewards are always visible
• Gamified elements (like daily check-ins) boost engagement
• Tiered status levels create aspirational goals
• Referral programs gain higher participation rates

Low-Cost Revenue Through Owned Traffic

The hard truth of DTC ecommerce in 2025 is that CAC (via the rising cost of channels like Meta ads) is steadily eating away at your profit.

This dependency on paid channels is crushing margins across the industry.

Apps fundamentally change this equation by enabling zero-cost, first-party communication with your customers. Let's compare the communication channels:

• Email: 15-25% open rates, free but increasingly filtered into secondary inboxes
• SMS: 90%+ open rates, but costs $0.01-0.05 per message sent (expensive at scale)
• Push notifications: 50-80% view rates, completely free to send

When a customer installs your app, you gain a direct line of communication that doesn't require paying Meta, Google, or SMS providers, or email deliverability hacks for each interaction.

Brands effectively using push notifications for flash sales can generate 5-10% revenue lifts instantly with zero marketing costs.

The retention advantage compounds over time: customers who regularly engage with app notifications spend approximately 20% more annually than non-app users. 

This isn't just incremental revenue—it's high-margin revenue that doesn't require paying the "tax" to advertising platforms.

Faster Checkout & Higher Conversion Rates

The data consistently shows mobile web conversions hovering around 2%, while mobile app conversions regularly exceed 5-7%.

This conversion gap directly impacts your bottom line.

Apps close this gap through several key advantages:

• Stored payment details: Once entered, customers never need to pull out their credit card again
• Streamlined checkout flows: 1-2 taps versus multi-page processes
• Integrated wallets: Apple Pay, Google Pay, and Shop Pay reduce friction significantly
• Personalized recommendations: On-device processing enables smarter suggestions that increase average order value

The compounding effect of these improvements can transform your unit economics. 

A 3% lift in conversion rate combined with a 15% increase in AOV can potentially double the profitability of each customer session.

The Power of Subscription Models & Community Building

For brands with subscription offerings, apps provide critical infrastructure to reduce churn and increase customer satisfaction. 

Apps strengthen subscription models by offering:

• Intuitive management tools: Easily pause, modify, or skip recurring orders
• Exclusive subscriber benefits: Members-only content, early access, and special pricing
• Progress tracking: Visualize usage, results, and milestones

An app as a hub for the loyalty program gives customers more control and visibility over their account, and opens avenues for advanced features that increase stickiness.

Community-building features, like user forums, shared challenges, and user-generated content galleries, create additional touchpoints that keep customers engaged between purchases. 

The Costs & Challenges of Mobile Apps

On the other side of revenue is cost—and the higher the cost, the bigger increase in revenue necessary to launch an app that drives profit for your business.

The Cost of Building and Maintaining an App

Traditionally, apps have taken significant investment to launch.

Custom-built native apps can cost $50,000-$500,000+ in upfront development costs.

That’s in addition to 15-20% of the initial cost per year to maintain the app.

And while fully custom apps provide the absolute highest-quality end product, the cost is prohibitive, unless you expect to make millions of dollars in new revenue through the app.

However, apps are a lot more affordable and accessible today.

You don’t need to build custom—ecommerce app builders allow stores to create apps without code, which synchronize seamlessly with their web store.

With MobiLoud, it costs roughly $1-2k upfront, and as little as $299 per month to maintain.

This lower cost structure clearly changes the game when it comes to profit calculations.

Driving Downloads and Engagement

The hard truth is even a perfectly designed app won't drive revenue if customers don't download and use it. App adoption requires a deliberate strategy.

Some tactics brands use to drive downloads include:

• App-exclusive discounts (e.g. 10-15% off first in-app purchase)
• Limited product releases only available through the app
• QR codes on packaging driving to app stores
• Post-purchase email flows highlighting app benefits
• Retargeting campaigns specifically promoting app features
• Influencer partnerships showcasing app functionality

This can come at a cost—the more aggressive you are about driving app downloads, the more the overall cost of your app.

The Risk of Cannibalizing Website Sales

One concern for many brands is whether an app simply shifts sales from web to mobile without increasing overall revenue.

This risk is real if your app strategy isn't focused on creating incremental value, and driving repeat purchases.

There is a small chance that offering app-exclusive discounts simply incentivizes shoppers to download the app, redeem their discount, and never use the app again.

But with smart use of push notifications and a well-made app, your brand will typically see a notable amount of incremental sales (sales you would not have gotten otherwise on your website).

When Does Investing in a Mobile App Make Sense?

From a financial standpoint, how do you know whether or not your brand should launch an app?

You want to be confident that the new revenue that comes from the app is going to be enough to cover the cost of launching it.

This means apps are best suited for brands that satisfy the following factors:

• High repeat purchase rate: Consumable products (beauty, supplements), and brands with large SKU counts (fashion) benefit most
• High AOV: Higher transaction values make even a slight increase in purchase frequency go a long way
• Strong brand loyalty: Engaged customer base means higher app adoption rates
• Impulse buy potential: Can you get customers scrolling through your app out of boredom or curiosity, and purchasing on impulse?
• Large customer base: The cost to build an app doesn’t scale that much by user numbers, so the more customers you have, the easier it will be to get a positive ROI

To help you, we created this Ecommerce App Revenue Calculator. By entering several details from your website, you can get a rough idea how much revenue (including how much incremental revenue) your app could be expected to make.

If you build your app with MobiLoud, you really only need to drive four figures in revenue per month to cover your app’s costs.

The rest is all profit.

When an App Might Not Be Worth It

There are certainly cases where an app may not drive much financial gain for your business (or even a loss).

Some brands aren’t the best fit for mobile apps, such as those with:

• Naturally low repeat purchase frequency (industries like furniture, durable goods)
• Low mobile usage rates
• Early-stage brands without product-market fit (focus on growing through your website first)

Learn more about whether or not your brand needs a mobile app in this article.

Final Verdict: Are Mobile Apps a Profitability Engine or a Cost Sink?

Mobile apps can deliver a major financial impact for your brand.

In recent years, apps have become an increasingly safer bet, thanks to:

• Rising mobile usage rates
• Increased standard of mobile websites (making it 
• The reduced cost of development and maintenance with no-code solutions

Today, unless you’re in a naturally low-LTV industry, or you make the mistake of spending big on a custom app, it’s hard to lose money on a mobile app.

If you launch and do nothing to promote the app, or nothing to drive engagement in the app (e.g. smart usage of push notifications), the app may not make much of an impact.

But even then, the risk is very low, and in the long run you should safely add to your margins just by driving more retention revenue from your top customers.

Next Steps

If you're considering an app for your brand, now is the time to do it.

Apps have never been more accessible, and the mobile commerce market will only continue to grow.

Start by weighing up the potential benefits (use our App Revenue Calculator to help), and match the results against the cost.

If you like the numbers, get in touch with us for a free consultation, and we’ll explain more about how an app can be the profitable growth lever your brand needs to win this year.