Posted: Thursday 21st January 2016 in Retail Strategy, Thought Leadership.

The short answer is: not unless you can do it really, really well.

In recent years this had been a difficult question to answer, with some arguing the importance of offering choice to the consumer in an ever growing digital market, and others suggesting the market decline means it shouldn’t be a priority. Looking ahead to 2016 and beyond, it appears the market has spoken.

Mobile app downloads dwindling

Research from IMRG and eDigitalResearch shows that 38% of consumers are downloading less apps than they used to when smartphones were first introduced, and will engage with email, social media, weather and banking apps (amongst others) before engaging with any retailer’s app. Worryingly for retailers, 85% of time spent on smartphones is spent on apps yet only 5% of that time is on retailer apps, and nearly half of all consumers surveyed suggested they ‘currently have all the apps they need’ and are unlikely to download any more.

To use a retail analogy, there just isn’t any room on the shelves for a retail app anymore!

The development of mobile and responsive websites, along with larger smartphone screens, has been the key driver for growing m-commerce sales, which saw a 33% increase in 2015. However it also looks to be the key driver in what appears to be a declining app market nearing its maturity. Ask yourself, why would your customer use an app (let alone buy one) when it’s just as easy and effective to go straight through the browser?

The dilemma

This poses a real dilemma for retailers. We know that a large majority still feel that apps offer a better experience compared to websites, and 75% of consumers research products both online and in-store before making a purchase. So although mobile will undoubtedly continue to be a large driver of growth and online sales for retailers next year, it’s unlikely that creating an app will offer the ROI retailers are after. And with such limited real estate available on our smartphone screens these days it begs the question, what can retailers do differently to take advantage?

The problem seems to lie in personalisation. What seems to be holding retail apps back is that customers are not willing to disclose the information that is needed to offer a personalised and seamless shopping experience (stored credit cards, loyalty information, etc.). This is likely due to privacy concerns and fears about how their data might be used. Until retailers can overcome this issue and create a more personalised experience, it would seem for now, apps are not the answer.

So what is the answer?

The focus should be on innovation and integration between in-store shopping and mobile website browsing to enhance the customer experience – just like Toys R Us have done very successfully. Their shopping app allows customers to scan barcodes in store, and get product details, prices and reviews as well as special deals and location-based alerts straight to their phone. It seamlessly bridges the gap between in-store and mobile, and offers value to the consumers that they can’t get any other way.

The other alternative solution is to find a way to infiltrate the apps that already dominate the smartphone real estate – a ‘if you can’t beat them, join them’ attitude.

Amazon is a perfect example of a mobile success story, having been one of the first brands to see the potential in mobile commerce. They now lead the way as the most popular mobile commerce app in UK.

With 35% of all e-commerce spending attributed to Amazon on Black Friday in 2015, integrating with a marketplace like this – one that has found a way to deliver high performance through their retail app – could be priceless. It also offers another shop window to omni-channel retailers looking to stay front of mind and gain a potential inroad into the remaining loyal mobile app users.

Last year the likes of Moss Bros and AllSaints took a huge step in that direction by integrating the ‘Log in and Pay with Amazon’ option through their mobile site. Within weeks checkout time had drastically reduced and average basket values had increased by over 15%.

So, should retailers bother with a smartphone app anymore? Well, unless you’re offering something unique with added value for the customer, probably not…


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