There is no doubt that the number of smartphone owners will increase in the future. It’s fair to say the mobile app industry is currently entering a renaissance period. The confluence of advanced mobile handsets, generous (but increasingly not unlimited) data plans from mobile operators, and the ubiquitous cloud computing trend has created an environment suitable for the development and distribution of apps to owners of mobile handsets, most of whom are curious to find out how these applications will increase the value of their handsets beyond voice.
There are now more than 390,000 in Apple’s App Store while Android’s Marketplace has 170,000 as of Q1 2011, both of which dominates today’s mobile app market targeting user handsets installed with the respective operating systems. A significant number of apps are offered free-of-charge to users with more than 60 percent of all apps in Android Marketplace being distributed at no charge as of the first quarter of 2011. Interestingly, the same percentage of apps distributed on Apple’s App Store is paid versions for the same period.
- The number of mobile apps in the application stores suggests developing and distributing apps for mobile users is not difficult. But how does one sustain the longevity of the app once it is launched? This question is especially critical for brand owners where their intent carries a commercial premise that is realised through the interaction between the user and the mobile app installed on the user’s handset.
How the app is developed will determine its future sustainability. Here are some areas to consider in the app development and sustainability plan:
Is the App Different From the Many in the App Store?
Since there are so many apps offered free on major app stores, how can a brand owner differentiate so as to stand out from the crowd? This question re-calibrates the developer’s focus from developing apps for a specific user segment or app category (e.g., entertainment, utility, etc.) to creating apps that have functional specifications that exceeds the perceived strengths of their competitors.
Remember there is no effective barrier of entry for any developer from creating apps that will have features that are better than incumbent developers in the app store. Hence, it’s critical that the development of any user and functional specifications must take into consideration on how competitors will respond following the launch of the developer’s app. Only then can the app be considered relevant to the target audience and effectively positioned to ward off competitive responses from other developers and corporations in the same app category.
Users Have a Choice Not to Download Your App
Mobile users have choices and they can choose not to download the app to their handsets. In most cases, the obviously negative choice of not downloading the app stems from the fear of owning an untested asset (as the app moves from the store and installed onto the user’s handset, it is perceived to be owned by the user who implicitly recognises the app to be an asset). One way of reducing this fear is to offer apps for free for a limited period where users are encouraged to download it at no cost by a certain period as it reverts to the normal retail price (e.g., US$0.99, US$1.99, etc.). This approach is especially useful for apps that don’t have the following attributes:
- Visceral experience (e.g., TVU Player);
- Leverage on existing brand equity (e.g., Grand Theft Auto);
- Network of users (e.g., WhatsApp).
Therefore, the strategy is to bring forward the utility of the app to a select number of users who will use, experiment, provide feedback (and criticism), and establish the word-of-mouth marketing that creates curiosity amongst mobile users who missed out on the initial free period. As a result, the developer gains the following benefits from this exercise:
- An unbiased group of users who will act as beta testers who give the developer independent feedback to polish the app for its eventual commercial distribution in the app store.
- The increase in online word-of-mouth on the app creates awareness and reduces download risk as the experience of the initial users are documented, which inadvertently becomes a natural FAQ for most hesitant users.
Low Price Doesn’t Drive Downloads
Apps are charged at all prices (i.e., US$0.99 – US$4.99) in the app stores and there are always substitute apps that serve the same needs for free or at a lower cost. Hence, developers should not build their case for downloading the app on the price of the app in the store, but on what users will gain if they download the app onto their handset.
For instance, a game can be positioned, as “arcade, shooting and role play rolled into one”. This gives users the perception they are downloading a game that fulfills three gaming needs in one single download (and at one price). Similarly, a mobile utility that stores user IDs and passwords can be positioned to have the core values of “store, encrypt and protect” that reinforced the benefits users will experience if they were to download the application.
Interestingly, the messaging behind these qualitative benefits are automatically quantified by users such as cost savings (from downloading just 1 app) and reduced financial risk (yes, a US$0.99 can be considered a financial risk for some) from ‘investing’ in an untested app. But it is the careful and deliberate messaging behind the app, which creates the perceptual incentives that promotes its eventual download.
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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.