BrainTrust Query: Rise Of The Planet Of The Apps
Through a special arrangement, presented here for discussion is an excerpt from a current article from the Joel Rubinson on Marketing Research blog.
Four years from now, it is likely that globally there will be close to two billion (yes, billion) smart mobile devices, outselling computers, according to Yankee Group estimates.
Nielsen reports that over half of mobile phones being activated now in the U.S. are smartphones. IDC estimates 182 billion (yes, billion) annual app downloads by 2015.
Flurry estimates that smartphone owners spend more time on apps than PC owners spend on the internet from their computers.
Smartphones, tablets and the iPod Touch will create the mobile, app-enabled lifestyle. Why? Because mobile is not like a computer with a small screen; it is transformational. Apps provide needed simplicity for mobile web access by extracting the essence of a service and putting it right in front of the user in a way that fits perfectly within the screen limitations while adding a localized dimension.
If there is any life activity that is crying out to become appified, simplified, localized and mobilized on your smartphone, it is shopping. Furthermore, marketers want it too. Imagine you will be able to deliver messages and offers to a shopper as they stand right in front of your brand and its competitors that are customized from prior purchase activity. This is behavioral targeting and "recency," two principles of media placement on steroids.
Look at this distribution of time spent on apps by category from Flurry; it appears that shopping aids have not yet taken off.
- Games: 47 percent
- Social: 32 percent
- News: Nine percent
- Entertainment: Seven percent
- Other: Five percent
However, app developers are starting to work on this:
- Modiv has been testing a mobile shopping solution called Scan It with Stop & Shop that is now about to be tested on iPhones. It links offers to your frequent shopper history and knows where you are in the store.
- Ad Age reports Finish Line unveiled a new app that gives shoppers access to real-time inventory at the store nearest them. Users can check to see if an item is available in the style, size and color they’re looking for before coming to the store.
- Amazon offers a price checking app so you can be in a Best Buy or Walmart, check the price of the same item at Amazon and decide if you want to order it from within the app.
Truly it is the "Rise of the Planet of the Apps." As an increasing majority obtains smart mobility, as smartphones replace PCs as the number one way of accessing the internet, as life becomes app-enabled, people will insist, "Yeah, we want an app for that" — and they’ll get it.
Discussion Questions
Discussion Questions: How will the growing appeal of apps change the way brands and retailers connect with consumers? How will it change the way consumers interact with brands and retailers?
Check out all the Q.R. codes on a growing number of consumer products and you might have your preview of what’s coming ahead over the next four years. Information, discounts, and cross merchandising are coming to a mobile device in your stores very soon.
In order for shopping apps to be embraced by consumers they will need to aggregate a number of features: loyalty cards, coupons, special offers, location and payment. Until then, most retail apps are nice-to-have, not need-to-have.
The focus of these apps will be retail, and as with most consumer-oriented retail vehicles, they will be powered by brands. Brands will provide the money for retail to offer the apps.
Hopefully these apps will not simply be retail and brand advertising opportunities. To be successful, the apps will need to provide value by saving consumers time and money.
I think it’s important to think of shopping apps on mobile platforms in terms of user generations. The large Boomer cohort is losing eyesight capacity to use the smartphone for everything they do at retail. The Gen X’ers and Millennials will use shopping apps, but not for all categories. The pleasure of the in person trip to the marketplace is still a very culturally imbedded desire, and it has a lot to do with the need for socialization. The power apps of the future for shopping will, in my opinion, need to connect the dots socially before the percent of retail purchases affected by them moves beyond 25%.
I think it will be interesting to watch what categories will emerge as win/win for shopper apps and retailers.
The question I’m hearing from the field is: ‘Is there an app for that?’. On a recent trip to the LCBO (Ontario’s liquor retailer), I discovered QR Codes on self talkers. QR codes are also appearing on bus shelter and bench advertisements. Retailers are embracing the whole app craze and it is a great way to connect to the customer. Apps that load up flyers, locations, store hours and special app-only sales are an example of how retailers can use apps to draw more customers in. Looking at phone trends, I would think that 4 years is too long. Smartphones are cheap and readily available and most carriers here have competitive data plans.
Apps will have continued impact on retail sales with these caveats:
1. The app has to be a good one. It must have clear purpose, be easy to navigate, and offer one or two key benefits that are “no brainers” to understand by consumers.
2. The brand or retailer must promote the app in its marketing literature, not just create it, publish it, and expect consumers to adopt it for usage.
Too many apps are being created just to be in the game. The ones that will change customer behavior need to be integrated into larger marketing efforts and deliver clear value.
The large number of apps represent the same mixed blessing as a large number of products in the store represent: large numbers are VERY attractive, but have the perverse effect of hiding what’s important, potentially suppressing sales.
Probably less than 100 apps will have a significant impact, and it is not at all clear, at least to me, which most of those will be. However, I strongly suspect that “pay as you select,” eliminating the checkout, will be the first explosive shopping app and will be the driving app for a lot that will come, after the fact.
Brands and stores will continue to pry into the personal lives of consumers to capture their attention before they make a purchase decision. The earlier in the shopping mission/cycle, the better chances are that the brand to reach the consumer first will win the purchase.
The biggest concern I have with app-driven shopping is the reliance on price to drive consumer behavior. It is as though no one can learn the obvious: using price as the single differentiator allows only one or two low-cost providers to survive the ensuing carnage. In this model, Amazon and Walmart will clearly prevail. Anyone else? Doubtful. My hope is for the brands to drive unique app offerings that focus on experience over price. However, except in the rarefied world of luxury products and consumers, it is increasingly difficult to capture the consumer’s attention with anything other than price, and perhaps celebrity.
A reason for hope? With the increase in influential bloggers, I can foresee a success formula that utilizes targeted ‘endorsements’ to drive consumers to shop at regular price for their favorite influencer’s recommendations. This works particularly well in the beauty industry. Let’s see who makes this move vs. the damaging price-only model.