Published on Apr 15, 2019 in Business
This is a report of the state of the Shopify App Store in 2019.
Unfortunately, Shopify doesn't provide the number of installs, which is arguably the most interesting stat. However, it does provide enough data to not worry about that.
As you already know, there is an almost infinite number of ways in which you can dissect, interpolate and correlate data and the risk is to drown in a sea of meaningless data.
Hence my goal is not to simply have a big page full of numbers but to discover meaningful correlations, actionable insights and fun facts.
This report will try to answer questions like:
This report is split into 3 main sections: Price, Rating and Reviews. Each metric is analysed through several dimensions, like pricing model, number of plans, etc. When it makes sense I comment the insight with a personal explanation.
Finally, unlike other reports that only split apps between free and paid, I find more interesting to include freemium apps. Freemium apps are paid apps that have a free plan (e.g: Privy). As we will see, the biggest surprises come indeed from this group.
PS: I'm considering building a tool that monitors apps in the Shopify App Store and finds hidden trends but can also be used for competitor analysis and BI. If you're interested, sign up here let me know what you think.
Ready? Let's get started.
As a merchant, price is obviously one of the most important factors when deciding to use an app but as we'll see price elasticity varies massively across different dimensions.
* Note: since many apps have multiple pricing plans, with "price" I refer to the starting price (the price of the cheapest plan). Also, unless otherwise specified, with "paid" I refer to both paid and freemium apps.
Across the entire Shopify App Store, the average price is $14.77 and the median price is $5.99. Things get much more interesting when we segment the results by other dimensions.
🧐 Takeaway: perhaps unsurprisingly, the average price of one-time apps is considerably higher than apps with a monthly subscription since they need to capture all the value in one transaction, though the latter presumably make more money in the long term.
* Note: for this section I only consider paid apps. All prices are per month.
🧐 Takeaway: if we are to trust standard economic theory, we can see the average price as the average willingness to pay. Here the data clearly shows that the category does affect the willingness to pay of merchants. For example, the willingness to pay for "trust and security" or "store design" apps is only around $8-$9, compared to apps that help merchants find new products, manage orders or the inventory for which the willingness to pay almost triples to $20-$25.
The conclusion from the data is obvious: if you're a developer, the category of your app (which is ultimately the market in which you want your company to compete in) can affect your customers' willingness to pay.
Since most apps have multiple plans, in order to "normalise" the data I have used the "starting price" (the price of the cheapest plan).
If we look at the price of the most expensive plan instead the average price is $96.05/month and the median price is $40/month.
😎 Fun fact: the most expensive product in the entire Shopify App Store is Visely, a cross-sells and up-sells plugin whose Enterprise plan costs $999/month.
Ratings are the bread and butter of marketplaces and the Shopify App Store is no exception.
Across the entire Shopify App Store, the average rating is 3.76 and the median is 4.6.
This means that in general people are moderately satisfied with the apps in the Shopify App Store, however, the fact that the mean is lower than the median indicates that there are outliers in the low end of the distribution. In other words, overall people are happy but unhappy people are REALLY unhappy, which results in lots of 1 stars ratings.
🧐 Takeaway: Freemium apps have a higher average rating compared to free and paid apps. For now, let's this fact sink in. Further down in the report, I'll try to explain why this is.
🧐 Takeaway: Whether the app is one-off or monthly subscription doesn't seem to make any difference in the general rating.
🧐 Takeaway: Here we can see a small but significant (13%) difference in average rating between single plan apps and multiple plans ones. I believe the difference is due to the fact that apps with multiple plans usually scale with usage, thus you only pay more when you get more results. With single-plan apps you pay the same regardless of your results, which is good is your store is doing well but otherwise feels deeply unfair.
If we compare this result with the one we gathered from the "By business model" section, we can start drawing some conclusions. In freemium apps, people usually get started for free and only start paying when they see results. Hence users feel they are being treated fairly and this is reflected in higher rating scores.
Personally, I think almost every SaaS app will eventually embrace a Freemium model simply because it's better for customer retention and in the long term retention is all that matters. Profitwell has a great episode on why Freemium is likely going to become more and more popular in the SaaS space.
🧐 Takeaway: the category an app is in doesn't seem to have any meaningful impact on the average rating.
Here we look at the correlation between rating and price to see if how much people pay affects their rating score. I have arbitrarily chosen 6 price ranges to make the data understandable: $0 to $5, $5 to $10, $10 to $20, $20 to $50, $50 to $100 and over a $100.
*Note: only paid apps have been considered for this chart. Also, the price refers to the starting price (e.g: the price of the first)
🧐 Takeaway: price does not seem to have any correlation with rating, which basically means that you are equally likely to find happy customers for $5/month apps as well as $199/month ones.
Reviews are a big part of the Shopify App Store, perhaps even more so than ratings. Most users will read at least a couple of reviews before making up their mind and an app with 0 reviews is a big red warning.
In total, users have left 280,223 reviews in the Shopify App Store. The average number of reviews per app is 104 and the median number is just 8. As we'll see soon, the numbers are massively skewed by a few outliers.
🧐 Takeaway: here we can see a stark contrast between the different groups. Once again, freemium apps seem to show the highest engagement. Paid apps, on the other end, show low engagement, with 50% fewer reviews than the overall average. It's hard to draw hard conclusions from this chart but unless we believe there is something special about the developers of premium apps, we must believe there is something about the Freemium model itself.
🧐 Takeaway: apps with a monthly subscription show a much higher engagement (at least when it comes to reviews) than one-off ones. It's hard to say why but again my hunch is that apps that you keep paying monthly deliver more value, over the long term, than one-off apps and this is reflected in the higher number of reviews.
🧐 Takeaway: even more stark is the difference between apps with a single plan vs apps with multiple plans. This insight matches the one found for the rating in the previous section. Single plan apps simply seem to be "worse" both in terms of rating and number of reviews generated.
🧐 Takeaway: there are massive differences in the numbers of reviews across categories. The general theme seems to be the following: apps that belong to "set-and-forget" categories (e.g: reporting, inventory management, etc) have a a low number of reviews. On the other hand, apps that are used often and where the perceived value is higher (e.g: sales and conversion, marketing, finding products) get many more reviews.
My conclusion is that how often merchants interact with an app does affect the likelihood of leaving a review more than the value actually received. As obvious as it seems if you install an app and never look at it, even if it delivers value it won't be top of mind. The classic example is reporting: maybe an app saves you dozens of hours every month but the perceived value is still less than another app that generates a few leads.
Another interesting thing from this chart is the stark difference between average and median in every category which indicates (unsurprisingly perhaps) that every category is dominated, reviews-wise, by outliers with thousands of reviews.
Here we look at the correlation between number of reviews and price to see if how much people pay affects their likelihood of leaving a review.
Again, I have arbitrarily chosen 6 price ranges to make the data understandable: $0 to $5, $5 to $10, $10 to $20, $20 to $50, $50 to $100 and over a $100.
🧐 Takeaway: price doesn't seem to affect the number of reviews, except for the $20-$50 range which gets almost twice as many reviews as the upper and lower ranges. Not sure what to make of it, more research is needed.
At the time of writing, the ultra-popular marketing suite Privy has 19,622 reviews, which represents 7% of the total number of reviews in the entire Shopify store! Since Privy is such a phenomenal reviews collector, I thought it'd be interesting to see how things would look like if the stats were "normalised" (that is: without Privy).
Without Privy, the average number of reviews across the entire Shopify App Store decreases to 97, which is quite remarkable indeed.
😎 Fun fact: The normalized average of 97 reviews means that Privy is 202x better than the average Shopify app at collecting reviews. Clearly, they know what they are doing!
App developers are the lifeblood of the Shopify App Store. Since it's inception in 2013, Shopify says it's paid out over $100M to app developers. In this section, we look at how they stack with each other.
In total, there are 1,471 app developers on the Shopify App Store and, as you can imagine, the vast majority of them has built only 1 app which is why the average number of apps per developer is 1.8.
The most prolific app developers are:
The most reviewed app developers are:
Here we want to see who are the best app developers based on the average rating of their apps. To keep things interesting, I've only considered app developers with at least 1,000 reviews across all their apps.
Best app: Free Shipping Bar
Why: deciding which app is the best among thousands is a hard task which is why I've decided to simply trust the "wisdom of the crowd".
To calculate the best app I've looked at the rating of apps with at least 2,000 reviews and, since this search returned multiple apps with equal rating score, I ranked them by descending number of reviews and taken the first app. It's not very scientific but hey-oh. Free shipping bar has a rating of 4.9 with over 8,000 reviews, which is truly remarkable. So maybe my method is not too bad after all :)
Best developer: Code Black Belt
Why: to decide the best app developer I looked at the ranking of app developers by rating and although PushOwl has a slightly better rating (5/5), Code Black Belt comes very close (4.92/5) but with almost twice the number of reviews.
Most expensive: Pixlee
Why: there are apps with a $999/month plan but usually is the most expensive option. Pixlee has only 1 plan that costs $599/month.
Most reviews: Privy
Why: at 19,622 reviews, Privy is the undisputed King, Queen and God of this category.
Best bargain: Also bought
Why: to calculate the "best bargain" app I've created a small script that looks at all apps with at least 250 reviews and ranks them by rating, number of reviews and starting price. There are other interesting bargains in the Shopify App Store but it's hard to beat a $9.99/month app rated 5/5 with over 500 reviews.
One can tell almost any story with statistics which is why I've included all the raw numbers in the report so that you can draw your own conclusions.
That said, in my opinion, the numbers in this report do tell some stories.
Story #1: freemium apps seem to perform better for almost every metric. They get far more reviews and have higher ratings in general.
Story #2: apps with a monthly subscription seem to perform better than apps with a one-charge model both in terms of ratings and number of reviews. Among them, apps with multiple pricing plans seem to get higher ratings than apps with a single plan.
Story #3: the category apps are in does affect the willingness to pay of merchants. This probably affects CAC and LTV as well. If you are an app developer, this insight potentially has big consequences in choosing which apps to develop.
One more thing: I'm considering building a tool that monitors apps in the Shopify App Store and finds hidden trends but can also be used for competitor analysis and BI. If you're interested, sign up here let me know what you think.