Mobile commerce apps: The pros, the cons and the six secrets to success

The last four years has seen the mobile app market explode. As public interest in apps has increased, brands have increasingly shifted their digital budget to accommodate an app presence for fear of falling behind competitors.

Today, the app market has matured to the point where app usage currently sits at 86% of all mobile activity, with statistics from app analytics provider Flurry suggesting that of the 2 hours and 42 minutes spent on mobile devices, 2 hours and 19 minutes is spent on apps.

“In today’s mobile, ‘there’s an app for that’ world, it is hugely important that brands are ready to meet customers on their own terms in the mobile arena,” says Michael Allen, VP of APM at Compuware. “Research shows that the overwhelming majority of people prefer using mobile apps to mobile optimised websites when browsing online through their mobiles, so having an app rather than relying solely on a mobile optimised website is a major advantage to a successful mcommerce strategy.”

Peter Gough, design partner and founder of ORM, adds: “The mobile application is here to stay and brands have realised the importance of engaging with their customers on this valuable touchpoint as part of an omnichannel strategy.

“With the mobile app market maturing, failure to create an effective presence that caters for an important customer segment could result in major losses in revenue.”

And there are other factors that are driving brands to roll out apps, as Gough notes: “Thriving brands in the mobile space realise that apps can cement loyalty and reinforce affinity. If you are a regular drinker of Starbucks coffee and you search for your nearest branch on your mobile, you are prompted to download the app to extend your relationship with the brand. The app then gives the likes of Starbucks the opportunity to provide personalised offers, loyalty schemes and competitions to encourage further engagement.”

“There is a discoverability issue here as well,” suggests Gareth Mackown, mobile leader for IBM Global Business Services UK & Ireland. “Sometimes people will be searching for you via Google, but sometimes they’ll be searching in the app store – in Play or in Apple’s App Store. And so if your business doesn’t have an app and a presence you can slip off the radar.”

But building an app is by no means a no-brainer, and there are plenty of pros and cons to take into consideration.

“Choosing apps or web will depend on the specific organisation, its goals, customer base and a variety of other factors. The key is to choose an approach that matches these goals,” notes Alex Sbardella, product strategy director at Red Ant. “Unfortunately, many are skipping this stage, believing all they need to do is develop an iPhone app to be successful.”

Alexandre Vaz, CEO of Liquid, adds: “By using apps, mcommerce vendors can provide a better experience to its customers and, thus, trigger higher conversion rates. On the negative side, it is harder to maintain and requires greater engagement from the customer to be successful.”

He summarises the pros and cons of rolling out an app that businesses should be aware of.

Pros:

• Increased access to user data (e.g. by requesting Facebook login).
• Better use of the screen (not inside the browser window).
• Better use of smartphone features/tools (e.g. camera, GPS).
• Can access without an internet connection, using 3G for example.
• More control on how it is being shown.

Cons:

• Apps need to be downloaded.
• Apps need to be upgraded.
• There is a low repeated usage of apps.
• Needs to be built for each platform (iOS, Android, Windows).
• Needs to be right the first time – reviews stay “forever”.

The last point is particularly pertinent, as consumers have soaring expectations of apps, says Allen.

“With this in mind, it is really important that apps aren’t just rushed through development and are able to make the grade when it comes to user expectations, or customers are likely to choose the opposition and the business stands to lose valuable revenues,” he suggests.

This is a very real danger, as apps have become such a competitive arena in recent years. A chart of the most downloaded retail apps compiled by App Annie, for instance, demonstrates how many major retailers are scrapping out for customer attention.

So once a business has decided to roll out an app, how can it ensure that it gives it the best possible chance of success?

Create a compelling reason to open the app

“The secret to success with the app route is to give people a compelling reason to actually open the app,” advises James Lovell, European retail Smarter Commerce solutions lead at IBM. “The average number of apps on a person’s phone is well over 40, and we probably don’t use half of those on a regular basis. So how can retailers give the end consumer a compelling reason to actually open the app and use it? And I think that’s where retailers really need to think about other things away from the transactional stuff.

“For instance, if I’m a retailer that offers credit, how can I let my customers manage their credit account through the app? What other things can I do with the app that makes consumers come back to that app on a regular basis, rather than purely for transactional stuff? That may be through gamification of loyalty, for example. That is something that the airlines and the travel industry do very well - I’ve got the BA app on my phone and I’m regularly checking my points balance and Air Miles balance, and it gives me a compelling reason to go back to that. So that’s something that retailers can learn from other industries, but they need to think about themselves – how can we get our customers into the habit of using the app and going to the mobile device to manage that relationship with the brand?”

Gough adds: “The challenge is for brands to understand their customer’s needs and their affinity and engagement with the brand to create an app that serves a useful purpose. We are beyond the point where brands need to build an app to have a mobile presence – apps should support the overall brand experience, not be an experience that sits detached from other touchpoints such as the website.”

Give it a simple function

“The most effective apps are extremely simple in concept and purpose,” says Gough. “In the early days when brands were starting to build their mobile presence, apps were sometimes a poor extension of the website and were difficult to engage with and encouraged drop-outs. If a brand’s mobile efforts weren’t useful we steered towards the website or away from the brand completely.

“The best apps perform a simple set of functions that solve a problem or task quickly and simply, with a quick and responsive interface. Banking is a perfect example of where apps work really well as they perform a simple task and don’t require much input from customers. Simple tasks such as balance transfers and payments can be made swiftly without fuss. Through apps, brands are able to improve our lives, making light work of menial, lengthy tasks, no longer on a fixed PC but on the move – all helping to develop a positive brand experience.”

Understand where it fits into the customer’s journey

“When retailers start to go into the mobile space seriously, they’ve got to really understand what their objectives are of going into that mobile channel, and how their customers want to interact with them and what content they want to deliver back to their customers,” says Lovell. “Strategically they need to really understand the role of that channel and the part it plays in the overall customer journey. Then obviously once they do that they can decide the content and the features and functions that they want to put into that channel.”

Research by App Annie has revealed how retailers are using apps to support the customer in many different points of the customer journey.

For instance, in response to the proliferation of showrooming - where customers will go into a shop to check out a product before buying it online – some retailers are using their apps to encourage people to make their purchase while they are in-store. Walgreens, Walmart, Target and The Home Depot have cleverly linked their apps to their physical store fronts, integrated scanning tools for product search, and begun using location technology to offer relevant offers and product suggestions based on where the customer is in the shop. App Annie notes that integrating the in-store and app experience could drive up to five times as much engagement, which ultimately increases loyalty and sales.

Other retailers have been using their apps to introduce gamification into the shopping experience. These interactive campaigns work to engage customers and build brand loyalty – showing that apps aren’t just solely for generating transactions. PINK Nation, for instance, ran an in-app scavenger hunt, through which it awarded deals and offers to participants.

Know who you’re targeting

“The better apps out there have targeted a particular audience or market segment,” suggests Gough. “In retail, early app efforts didn’t take into account the differences between a desktop customer and a mobile customer. As mentioned above, if you have downloaded an app, you are probably a fan of the brand in question and will require different engagement than browsers or passers-by. For example, a fashion retail brand will need to realise that its app audience might not be interested in all the lines and ranges available. The app serves as an opportunity to be more personalised with relevant garments that match the shopper’s tastes. The app shopper is more likely to be loyal to the brand, making impulsive purchase decisions in a lunch break or on the journey home. App content and user experience should reflect this to provide a proposition that suits this customer base.”

Make sure you promote it

“When you launch a new app, particular if you’re active on social media, then you should be announcing it and maybe using mobile marketing to launch it,” recommends Mackown. “One of the great things about apps is that there is an expectation that you’ll keep updating them. You always have free marketing through that, as it’s always in people’s updates list so they get to see it there. I always like the app providers who are putting out some quite relaxed messaging about what those updates contain that really sits with their brand – it’s almost a conversation with their customers and community. You get that excuse to keep it fresh in people’s mind in a way that you perhaps don’t with a mobile website. I think that’s the real value with that.”

Keep testing

“Performance is perhaps the most important factor in delivering a strong mobile user experience, and as such, it should be the foremost consideration at every stage of the design process,” says Allen. “With today’s increasingly globalised economy, mobile websites and apps also need to perform from anywhere, at any time. As such, having insight into how well it’s running in different areas of the world, and how it will perform during peak hours when it comes under the most pressure, is essential. This means that brands need to conduct regular testing on their mobile sites and apps to see how they are performing within the different regions where their customers are. They should also conduct load tests ahead of any peak sales periods to ensure that mobile commerce offerings are able to withstand the intensified pressure and don’t leave their customers disappointed.”