BrainTrust Query: I Need an App for My Apps!!

Discussion
Jun 19, 2013

Through a special arrangement, presented here for discussion is a summary of a current article from the Mark Heckman Consulting blog.

Almost every week I run across a new shopping application attempting to enter the fray.

According to CatapultRPM’s 4th annual Digital Shopper Marketing (DSM) study, the most digitally-aided shoppers frequently use more than one shopping app to assist them in building shopping lists, loading coupons, finding items in the store, barcode scanning, and even comparing prices across retailers.

In addition to all of these new third partner applications, individual retailers offer their own specific apps for shoppers, each including as much utility as possible in hopes that the app itself becomes a reason for the consumer to fulfill a larger share of their requirements with that retailer.

With all the activity, I have often thought that if one app could combine the function and the offers of multiple retailers (especially the ones I shop), I would load that one in a heartbeat and delete all others in the name of shopping sanity. For the lack of a better term for this solution, let’s call it a "Community Shopping App."

One such platform from Loc Enterprises is designed to coalesce multiple loyalty programs for consumer convenience. A "Loc Card" identifies the cardholder at multiple retailers and then delivers all the program rewards of those participating retailers. It’s a "big idea" that makes so much sense for the consumer that Loc Enterprises is banking on consumer demand to lure the big retailers and their existing loyalty programs.

[Image: LOC Card]

But this is a big "ask" from the "big" retailers, as they have always shown an aversion of participating in anything that requires an open transfer of data, whether offers or content to third parties that could potentially also be a platform for their chief competitors. I have yet to meet a retailer of any size or shape that relishes the thought of providing the consumer a quick and clear comparison of their offers against the best offers of their competition. In addition, most big retailers seem convinced their programs are sufficient to stand on their own. Unfortunately, without the big retailers, the Loc Card app will likely not gain sufficient consumer acceptance.

So now we wait and see who wins: the consumer who covets convenience or the retailers that demand exclusively ownership of the mobile application and it’s content.

Ultimately, consumers like me, that feel overwhelmed by the number of shopping apps that are currently available, will decide how this all shakes out. If we chose to not to shop at retailers that show reluctance to consumer-driven loyalty platforms, perhaps the big retailers will participate.

What factors do you see working for and against community shopping apps? What attributes and functions would such an app need to have in order to win favor with both consumers and stores?

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11 Comments on "BrainTrust Query: I Need an App for My Apps!!"

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Ken Lonyai
BrainTrust

I’ve been steadfast on this: for retailers, it’s ultimately a big mistake to hand over their mobile presence to a third party. It can be likened to having one universal store design for all store brands or having one web site encompassing all online merchants. Following practices of commoditization and price competition is the surest way to run a retail chain into oblivion and a universal shopping app is a major step towards commoditization.

Traditionally, shoppers have physically carried many (sometimes more than a dozen) credit cards and often unfurled their lengthy wallet card sleeve as a badge of honor. I understand Mark’s point, but he doesn’t have to be overwhelmed at all. He can choose just one, two, three, or no apps—whatever his comfort level is. In fact, the willingness for consumers to pick and choose a limited number of shopping apps is much better for them and the marketplace. It pressures retailers that have their own apps to truly make them useful and valuable to consumers, or else, not make the cut to be on consumer’s devices. That’s a win-win that generic apps will never aspire to or be able to compete with.

Paula Rosenblum
BrainTrust

I think Passbook is meant to be an aggregation service for loyalty apps. Shop Runner is also a community app, and eBay Now is really just another aggregation service for same day delivery.

Why not have a central loyalty pool too?

Obviously the barrier to adoption is retailers’ perception that they don’t want to share among retailers who sell similar commodities. There’s some validity to their concerns as it’s a small step from there to price comparisons.

It’s going to happen because consumers will want the convenience. That’s just the way our world is working today.

Todd Sherman
Guest
Todd Sherman
4 years 5 days ago
As mobile and apps are becoming a key way for retailers to connect with shoppers, handing that channel over to a third party is a significant loss of a key asset for the retailer. Community apps create the singular, one-dimensional experience for ALL the retailers involved, so there is no significant ability to differentiate (except on price) or provide their unique brand experience. Also, in a world where “data is the new oil” it’s another asset that retailers would be giving away to a third party community app. But the real question is bigger than that. To date, many retailers have taken the approach that a mobile app should be a “mobile optimized” version of their online presence: a collection of products, their descriptions and prices, which can then be purchased online. But if a retailer has a shopper in their store, such an app is essentially taking them out of the physical store and putting them one click away from the competition. The opportunity with mobile and apps is so much more. It’s really about connecting the shopper with the physical store where more than 90% of retail takes place. For example, help them find the location of products… Read more »
Verlin Youd
BrainTrust

First, shopping apps and loyalty apps, although related and should be connected, are different animals.

Community loyalty applications like LOC, if they are going to succeed will be required to meet retailer and consumer security requirements, and can do so through the use of modern, cloud-based technologies.

Mark does identify the biggest challenge retailers will have with community shopping applications: the ability of the consumer to quickly compare and contrast offers from multiple providers. However, these applications are already here regardless of retailer participation with examples like BuyVia, RedLaser, ShopSavvy, and Google Shopper to name a few.

Bottom line: these applications are going to continue to gain consumer support and the challenge for retailers will be how to succeed in delivering a differentiated value proposition and not just a great price.

Ed Rosenbaum
BrainTrust

We continue to look for the easy way to shop without leaving the cozy confines of wherever we are. And we wonder why we are raising a generation of young people who do not exercise and are overweight.

Bill Bittner
Guest
Bill Bittner
4 years 4 days ago
There are already a lot of “community shopping apps,” they’re just not focused on brick and mortar retailers. Kayak is a great example of a travel industry app that looks across providers. One could even argue that Amazon, with its associated retailers, is a community app. One of the goals of Facebook is to become the gateway that consumers use to get to the retail community as they track their movement between retailers. The fundamental issue is that the barrier to entry for the Internet keeps moving lower. It used to take a significant monetary investment, access to a sophisticated online infrastructure, and special training to develop a sophisticated presence on the Internet. Now people can take out a subscription on a cloud service for very little money and most high school graduates have developed their first website in a technology class. The Internet is becoming overwhelmed with “app graffiti.” A community shopping app is not a technological challenge. It needs to have some basis for affiliation of the consumers. One way would be to focus around different organizations such as school or church sponsorships. Sports teams might become a rallying point for membership. But the offers these groups receive… Read more »
Larry Negrich
BrainTrust

I am sure that some retailers will sacrifice their control over their mobile app, loyalty program, and engagement efforts to aggregation services. They will do this because of a perceived cost savings or lack of familiarity with how to effectively engage their potential shoppers utilizing loyalty data and mobile’s engagement abilities. This will be a costly, strategic mistake for these retailers. The smart, successful retailers are already crafting their strategies to utilize the most powerful shopper communication and engagement device that has ever existed, the consumer’s own mobile phone.

Mobile phones, apps, and associated loyalty programs, afford retailers engagement opportunities that can bring shoppers into stores and that can affect purchase and in-store behavior in positive ways. A retailer that chooses to give up this strategic differentiator and join an aggregated service diluting its brand, its abilities to engage customers, and its ability to gain meaningful insight from loyalty data might as well change its company name to “Store.”

Lee Kent
BrainTrust

We, the people are going to find a way to compare regardless of what retail wants. I have been a huge proponent to APIs for quite some time and hope some great start-ups will find ways to use them and bring convenience to my shopping experience.

As for retail, there are lots of fun app ideas they might consider other than loyalty related ones, that will keep them at front of mind of their customers.

Ralph Jacobson
BrainTrust

Convenience is the overarching factor that will drive ultimate long-term success. Keep the app simple and painless. No rocket science here…or maybe it must be rocket science, since no single app has emerged as the winner…yet.

Robert DiPietro
BrainTrust

One app to rule them all sounds like a movie line. From a consumer perspective, it would be very convenient to have one shopping loyalty app where I can get the rewards and discounts for that particular retailer. It could also be a win for the retailers as they could get a more descriptive picture of the customer.

Now for reality—the retailers will not collaborate and share data on customers until the customers demand it.

Shilpa Rao
BrainTrust

One of the studies we conducted for our client showed that most shoppers used a browser rather than the retailer’s app to shop online.

Retailers need to add significant features on their mobile site, considering form factors and other cross-platform and cross-device considerations.

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