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Has the App Store Changed Retail?

July 15, 2013

It's rare to stir up nostalgia for something five years old, but last week's anniversary of the introduction of Apple's App Store did just that.

Proclamations arrived that the App Store launch on July 10, 2008 was even bigger than the introduction of the iPhone the year before. In the last five years, more than 50 billion apps have been downloaded and more than 900,000 programs have become available.

Many articles touched on how the App Store transformed personal computing and positioned "app developer" as a career. Traditional desktop and laptop computers have lost ground in favor of smartphones and app-friendly tablets. Far beyond a device that only picks up and makes calls, the app-loaded smartphone has become an essential part of many people's lives.

Wrote Christina Bonnington for Wired, "Apple's handset was able to finally take on the multitude of functionalities we now expect of all touchscreen phones: Sharing photos, posting to Facebook, finding a place to grab dinner, composing music, and playing every kind of game, from word puzzles to first-person shooters."

Writing for New York's Daily News, Ebenezer Samuel commented how the App Store made "digital-only completely hip and cool." For many consumers, the ease of purchase — and availability of free and cheap apps — removed the past need to own "something physical," whether a CD, DVD, book or any software.

Consumers are also proving to be willing to pay for upgrades and better software features. Beyond the addictive games for those on-the-go, the wide variety and solid content of many apps that range from silly to useful to mind-blowing has fed the app fascination.

As far as directly affecting retail — whether featuring barcode scanning, downloadable coupons, shopping list builders or payment options — apps appears to be just getting started.

While many articles touched on increasing competition from Google, predictions roundly called for apps to only become more disruptive in the future.

Wrote Julie Snider for USA Today, "Expect further advances in wearable computers, and the apps that communicate with them. Expect an evolution (consolidation?) in payment apps. And expect apps that will not only get faster and smarter but will do a better job of anticipating our needs and whims, whether we're at home, the office or the car."

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Discussion Questions:

To date, what effects has Apple's App Store had on retailing? In the years to come, what types of apps will prove to have the greatest influence on retail?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

In three years, how essential will apps be to the in-store shopping experience?

Comments:

I see two big effects on retail: First, e-commerce sites for brick-and-mortar retailers need to strive for the sort of design simplicity and ease of use typical of a smartphone app. Second (and more important), the "app" explosion continues to empower the consumer in his or her relationship with the omnichannel retailer. Especially on the issue of price transparency, the smartphone has been a game-changer.

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Dick Seesel, Principal, Retailing In Focus LLC

The Apple Stores took a concept once used by few retailers into prime time. With the use of mobile point of sale devices they changed the landscape. The use of a physical cash register was set aside for the use of a mobile device that we now can see in many retail formats today. Mobile Point of Sale with payment is a significant part of the Apple Store success these past 5 years.

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Frank Riso, Principal, Frank Riso Associates, LLC

The app store has had a significant effect on retail. Apps have put consumers in control of retail transactions. They can look for discounts, compare prices, build shopping lists and check out, all using their phones. What once was only available on a full computer suddenly became mobile, in a format designed to disrupt.

I look for apps to continue to proliferate. Payment solutions is an area ripe for development, improvement and consolidation. Price comparison will continue to grow as Amazon, Walmart and others expand same day delivery.

Apple launched a revolution in shopping. We are still in its midst.

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Max Goldberg, President, Max Goldberg & Associates

Apple's (unplanned) app store or more specifically, the custom apps it and Google Play offer, have clearly begun to affect retail. It's not today's still early stage technologies that are having the effect, but most importantly, the change in mindset among consumers and retailers.

The era of TV ads and Sunday circulars is giving way to flexible empowered consumer interactions that neither retailers or shoppers fully grasp or truly know how to utilize yet. When both sides realize how mobile devices enhanced with meaningful apps can transform shopping into effective experiences, it will truly become the norm and truly be powerful.

Today's approaches to loyalty and couponing will probably give way to apps that create/enhance experiences and translate stores into entertainment-like destinations.

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Ken Lonyai, Digital Innovation Strategist, co-founder, ScreenPlay InterActive

Apps have forced retailers to obtain shopper insights, understand and analyze the data to provide people what they want from an app, whether it be product information, online coupons, or price comparisons. Apps have forced retailers to listen to consumers and deliver. Definitely, the apps that scan products to find the best price have been game changers in the way people shop for products.

In the near future, I expect better, more detailed side-by-side comparisons that tell consumers Product A is better than Product B and why to drive purchasing decisions.

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Zel Bianco, President, founder and CEO, Interactive Edge

Android apps are catching up quickly to Apple's. People cannot seem to get enough of these things. Crazy. Makes you wonder how the world even survived before some of the apps came out there.

I think there still is a huge market for intuitive, simple apps for retail. CPG needs to collaborate better with retailers in bringing the seamless experience to shoppers from browsing to buying to delivery. Apps that streamline those processes and make mobile shopping less cumbersome will tend to have lasting value.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

How can you say "this changed everything" clearly enough? The ultimate disruptor. Not just retail, but ALL businesses have been changed.

Business users now expect consumer-grade usability (to borrow a phrase from Sanjay Poonen of SAP) and that has changed forever the way we will design and build the user experience.

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Paula Rosenblum, Managing Partner, RSR Research

Retail sales reports for this morning are not a reason for excitement in most board rooms. A look at what is going on with smart phone use for retail sales using free or paid-for apps will demonstrate the clumsiness of a large majority of these softwares interfacing with antiquated web sites that by themselves are a nightmare to navigate. This is not to say that technology has not arrived to successfully support this market smothered in ID 10-t cockpit errors—it has.

There is too much growth in the e-commerce market to deny feasibility and successful ease of use. What is missing is the ability of bricks & mortar retailers to manage through the differences of these separate markets.

'gjarnoldjr'

I guess I'm going to be the holdout here—or as I like to think of it, the voice of reason—but I'm going to say "not much." Sure, there has been, allegedly, an improvement in price (and perhaps also inventory) transparency, but buying something is still pretty much the same thing as it's been since Socrates strolled down to the Agora: you go to the store to see if they have what you want, if they do and you like the price, you buy it, if not, you try some other place or some other time. A number of people here have commented on the intangibles: empowerment, expectations, and the like, but it's too early on a Monday for me to get my Big Picture on. As for "wearable computers"...do you have one in a 40 regular?

'notcom'

Apps drastically lowered the bar of entry for consumers to use technology to shop, learn and share. What only a few could take advantage of before the masses can now thanks to apps.

Apps also created an entire market of sub $3 items. It showed developers that getting $.99 from 1 million users was far better than getting $99 from 1,000 people.

Apps that help consumers reach the right products at the right time for the right price will be the most beneficial to consumers. For retailers it will be apps that help them attract the right consumers to the right locations at the right time. Apps can help decrease OOS for retailers and up-sell accessories for something about to be purchased. Finally, apps create immediacy and this will benefit both consumers and retailers. 24/7 shopping from any location.

The 900,000 apps today have just touched the service for what it to come in the next 12-124 months.

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John Boccuzzi, Jr., Managing Partner, Boccuzzi, LLC

Much of the impact of the App Store on retail has so far been centered around "intermediaries," or apps that enable the shopper to navigate across the retailer and brand spectrum. For instance, Red Laser and other similar apps are enablers for showrooming price checks and/or product reviews. Other apps, like Shopkick, are work across different retail stores and are designed to reward loyal store shoppers.

Retail brands have certainly waded in with their own branded apps. But in the future, these store-specific apps are likely to realize a much greater potential for enabling a more powerful in-store digital experience. Retailers will find more ways to leverage their own mobile apps, rather than being corralled into "me-too" intermediary platforms that create layers between the customer and the brand. The retailer branded has the potential to drive the most cohesive physical/digital shopping experience, with the connected store acting as a valuable hub for the omnichannel brand.

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Matt Schmitt, President, Chief Strategy & Innovation Officer, Reflect

Retailers owe the app stores a round of gratitude for driving consumer acceptance of mobile apps for use across a spectrum of activities, including in-store shopping. With apps, retailers are now given the ability to interact and engage shoppers throughout the shopping experience. Integration of a store-branded app with other mechanisms and systems (digital signs, in-store promotions, personalization, loyalty systems, etc.) gives the retailer the ability to improve and personalize the shopping experience.

And Matt Schmitt makes a good point when he states: "Retail brands have certainly waded in with their own branded apps. But in the future, these store-specific apps are likely to realize a much greater potential for enabling a more powerful in-store digital experience."

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Larry Negrich, Vice President, Marketing, nGage Labs

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