It may sound bizarre, but I still meet mobile users in Asia who only know ONE app store, and it is owned by Apple. But we know that it’s not true – there are more than 120 application stores in operation since 2011. Some of these application stores are owned and managed by handset manufacturers such as LG and Samsung. Others are managed by owners of mobile operating systems such as Apple and Google. In particular, the bulk of the estimated 120 application stores worldwide cater to handsets using the Android mobile operating system.
Applications Impact Brand Equity
The growth and success of these application stores have influenced mobile users positively by giving them a reason to access the Internet on their handsets to search, download, and engage the apps with mobile data. Over time, the consumer behavior to download apps has been embellished in the constant conditioning of the mobile user to download the latest and greatest apps in today’s app stores. This is why many brands are increasingly releasing apps in today’s major app stores, hoping to catch onto the rising trend of user engagement via mobile apps. However, there are three strategic challenges that must be overcome to build a sustainable mobile application strategy for brand owners and advertisers.
Strategic Challenge 1: Customer Engagement
Customer engagement is paramount to building a sustainable customer experience. Indeed, the act of downloading a branded mobile application represents a short-term advantage in raising brand awareness and risks stagnation over the long term if customers are not engaged over time when interacting with the branded mobile application. In this instance, having a social or community strategy is critical to encourage repeated usage of the app, and foster habits of self-reliance amongst their users that hopefully lead to the rapid utilization of the service to customers’ daily lives.
Strategic Challenge 2: Who Owns the User Data?
Furthermore, the growth of application stores will lead to the gradual shift of data ownership from brand owners and advertiser to operators of application stores. As these application stores are hosted on the cloud, the brands’ representatives have minimal, if not zero visibility on download data, purchase history, and the incentives that promote incremental revenue per application (e.g. in-app purchases). Such consumer insights will be owned by the owners of application stores that directly manage the end-to-end consumer value chain from app discovery to billing (for paid apps). To this end, it is critical for brand owners and advertising honchos to carefully discern the merits of each app store and negotiate with the owners on how it can access their customers’ information on the cloud.
Strategic Challenge 3: An Increasingly Fragmented Application Store Environment
Not surprisingly, most operators today are launching their individual app stores to mitigate the risks mentioned earlier. Bharti Airtel, MobileOne, and China Mobile have launched their respective mobile application stores. Therefore, brand owners and advertisers must carefully review the merits of distributing their branded mobile applications in all app stores and choose the few whom they are confident will add value to their bottom-line.
The Future of Branded Mobile Applications
The future of the branded mobile application is to make full use of the handset’s hardware, such as device GPS, accelerometer, etc., to maximize the apps’ user experience, while shifting most of the app’s processing work, such as database queries, to the apps’ servers hosted in other countries. This reduces the need to do multiple data transfers via the mobile Internet, reduces the need to have taxing computing requirements on the handsets, and conserves battery life, a critical requirement for mobile users today.
What does this mean for brand owners and advertisers? It means that it is imperative to own and develop mobile applications that are relevant to their business operations. It also means that the confluence of cloud technology and increasingly fast mobile networks has created opportunities for creative minds to design the intent and delivery of these mobile applications to reach their target audiences. To this end, brand owners and advertisers must embrace mobile applications as a means to interact and engage their target customers in today’s mobile-first world.
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American Apparel's chief digital officer discussed the future of retail, the importance of delivering value to the consumer, and strategies for an IoT and omnichannel world.