The Next Logical Step for Retailers
Since Apple introduced apps to the world in 2008 it is estimated that there have been over 150 billion app downloads. That is an unfathomable number and the remarkable million plus apps have revolutionised commerce, communication, gaming, media and many more areas of our lives. However in recent times there has been a dramatic regression in the rate of growth of app downloads; this seems to bely common logic given that everyday new, creative apps are being created and the population is becoming more and more technology literate. The reason for this deceleration is that the rate of new smartphone owners has decreased and crucially users have become more comfortable with their existing apps and are now less inclined to experiment with new downloads. This trend is particularly relevant with regards to retail apps because, with the number of apps in this area always increasing, it not plausible for a consumer to have an app for every shop they visit. Furthermore, and more importantly, the functionality of many retail apps is very questionable.
Many retailers have seen the rise of the app market, heard of the success stories of large corporations like Amazon, eBay and Starbucks and decided that for their brand to progress the creation of an app for their loyal customers is absolutely necessary. However, not only is this not the case but in trying to promote the image of a youthful and up to date company through the implementation of an app an unnecessary waste of resources is often incurred. In essence, the majority of retail apps serve the sole purpose of creating a multichannel portfolio for a company but in actual fact have no extra function to their website. While it is possible to make purchases through apps the vast majority of people do not buy products on apps but much prefer to shop on retail websites or in-store. Add to this the earlier point that people are becoming less willing to download new apps and the creation of a retail app seems fairly whimsical. Instead of spending money on an expensive and largely redundant app it is far better to invest in the improvement of the responsiveness and efficiency of a pre-existing mobile webpage and looking for other ways to engage your loyal customers.
This is not to say there aren’t successful retail apps because there are. What separates these success stories from the multitude of less prosperous apps is that their apps have a purpose or functionality beyond being an extension of the retail webpage. Firstly, the imperative requirement of having a successful app is that the users are very regular customers and secondly, the business must control a sizeable enough market share to justify an app. From this point a few questions must be asked before considering making an app: Will it in some way improve both the in-store and online shopping experiences? Will it improve customer loyalty? Will the app benefit the customer enough to legitimise downloading it?
A study by eBay showed that the majority of retailers ignored these questions and as a result only 42% of retail apps ever made it to the customer. The failed retail apps encountered the fatal problem that there was simply not enough mobile traffic to justify having an app; these failures are detrimental to the brand image. There is a very sensible pool of thought which cites that instead of individual retailers creating their own apps it would be far more beneficial if they were to unite and create an app which encompassed a broad selection of stores. However, even if this were to happen people aren’t nearly as willing to shop on apps compared to websites and who is to say this would change. In a survey 98% of people said they had shopped online but only 18% of those said they had shopped on a mobile app.
However the app platform does provide other opportunities to retailers beyond simply selling their products and the most successful example of this is the Starbucks Loyalty app. This app generates millions of transactions every week and has been incredibly effective in improving customer retention levels. Sadly, as shown, it is not feasible for many retailers to have their own apps, whether for commerce or not, but this does not mean that they have lose out on the brilliant acquisition and retention opportunities of a digital loyalty program. An app called Fidel allows businesses to avoid having to make their own app to engage with their customers. Fidel amalgamates the club cards of different retailers into one place which allows them not only to set up a loyalty ladder to incentivise customers but provides actionable insights through data collection. Essentially Fidel allows businesses to have their own Starbucks Loyalty app without them risking their own app, which in the current commercial and technological climate would be more than likely to fail. Further to this the retailers who join Fidel have a data analytics team behind them providing proven retention and acquisition strategies. Instead of joining the morgue of underused retail apps it is far more sensible to stick to the far more traditional retail methods whilst at the same time fully engaging your loyal customers with a bespoke Fidel digital club card.
Please “recommend” if you liked this article!
Published at: July 15, 2015