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1. Introduction
The pervasive adoption of mobile devices and the wide availability of the mobile web have turned mobile applications (apps) into a preferred shopping channel of consumers (Leon, 2018). In the 2019 holiday shopping season, consumers made more purchases on mobile phones than on desktops (Analytics, 2019). This consumer trend has turned mobile commerce apps into a new battleground for companies to gain a competitive advantage. A company must not only launch a commerce app to attract mobile customers, but also continually update the app to grow its mobile customer base amid similar attempts of rival apps (Kajanan et al., 2012).
App updates have been identified as an important strategic instrument for companies to grow their mobile customer base (Chen et al., 2021; Sun et al., 2022; Huang et al., 2017; Foerderer and Heinzl, 2017). Unlike non-feature updates such as bug fixes, hotfixes and patches, app strategic updates that this paper focuses on refer to the updates of introducing new business offerings or technical functionalities to an app (Foerderer et al., 2018; Comino et al., 2016). For example, Expedia accelerated its mobile customer base growth by releasing a series of app strategic updates such as introducing rental cars and adding “Things to do” options. These app updates are strategic for companies, because they are competitive moves taken by companies with the aim of promoting app downloads in hypercompetitive mobile app market (Chen et al., 2021; Foerderer and Heinzl, 2017). When continued strategic updates become a common practice in a cohort of rival apps, a deliberate app update strategy is required for a company to harness the effect of strategic updates. Prior research has identified key decisions entailed in app update strategy such as what elements in an app should be strategically updated (Comino et al., 2016), how substantial a strategic update should be (Gutt et al., 2019) and when should a strategic update be released with respect to previous updates of a focal app (Kajanan et al., 2012) and concurrent updates of rival apps (Tian et al., 2020).
Although prior research urges app developers to weigh several key decisions for app update strategy, it has not provided theoretical insights regarding how the strategic...