Smartphones are increasingly becoming the mobile device of choice. OFCOM report they represented 48% of all mobile phone sales in the first quarter of 2011. And in May 2011, 42 per cent of UK mobile consumers used a smartphone, compared to only 27 per cent a year ago (IMS Research).With so many smartphones now in circulation it is little surprise that the global app market is exploding. At the beginning of 2011 Gartner predicted $15bn in sales with 17.7 billion downloads for the year and from more recent reports it looks like they may well be right.
Consumers are becoming more aware of how powerful and useful smartphones and apps can be and they are beginning to expect more from apps than just entertainment. As they begin to experience the advantages of using apps to streamline their relationship with retail stores, service suppliers and other brands, businesses and organisations, then anyone who can’t offer a similar level of experience will soon look uncompetitive.
It IS about money – indirectly…
Whilst the top rated apps have demonstrated that it is possible to make money out of selling apps, the apps that make money in their own right are just a tiny minority of the thousands of apps that don’t make enough to cover their development costs. Because of this lottery style economic model then unless making apps is your core business then viewing them as a new money making product line is not a great move. Instead businesses should be viewing apps as a way to augment or improve their current core business, much as the way web sites do.
The retail sector are leading the way in developing apps that improve their core service and give their customers a better experience. A great example here is the Tesco app. The app helps streamline shopping so that you can easily shop in stages, scan items you need to replace or new things that you encounter and like. The Debenhams app is another good example. It allows customers to improve their in-store shopping experience by being able to scan items in store and request sizes and find their way. Their first iPhone app generated more than £1m of sales in its first five months, with more than 2.4 million “shopping sessions”.
Seeking competitive advantage
These apps concentrate not just on the online experience, that a web site can give you, but on the physical experience of going to the store. On this point Starbucks added the ability to pay for coffee in their stores via a scanner in their app which was used by 3 million people in the US by March 2011. These companies have invested in thinking strategically about apps and have started to establish compelling business reasons for developing apps and gaining competitive advantage. To remain competitive it is now time for other businesses to think how an app can enhance their customers experience and enhance their brand.
Think outside the box
One creative way is to offer your customers a simple and valuable interface to your services. If you are a consultant do you have a set of tips that are useful to have in your pocket on an app? If you are a chain do you have loyalty or collecting schemes that can be made more exciting, valuable or fun with an app interface? Whatever business you are in you can ask yourself is their a service or information that I provide which lends itself to being beneficial to my customer if its in their pocket, they can access it on the move or its just fun to do.
If you have publicly accessible grounds or buildings you can ask yourself if there are stories, games or activities that your customers would enjoy that can be delivered through an app and enhance their experience of your venue. The Heritage sector in particular have begun to explore the potential for apps to add a deeper and more personal level of interpretation for their visitors. The benefits in this kind of app is in lengthening the stay, and thus increasing sales of refreshments and in appealing to a wider audience. In app purchase may also be considered as a way of increasing sales of app/brand/venue related goods.
Another use of apps is in helping to build brand and positive PR. Engineering and public service businesses in particular can use apps to help raise awareness of what they do, their history and their community involvement. Apps are great to support events, family days, ceremonial days, conferences, product launches and so on.
Reducing the barriers
So what is stopping businesses developing apps right now?
One of the reasons is cost, and the associated perception of cost. It can cost a significant amount of money to get apps developed and many developers are very busy. And for a strategic app that is going to be integral to your business and integrates with your back-end IT systems it is worth making sure you get it right and either invest in in-house app development skills or develop a good relationship with a reputable design and development company. But the entry-level cost for Apps is coming down all the time, making it relatively low cost to get started.
A second reason is lack of knowledge. For some businesses there may not yet be an obvious killer app idea. Without a better understanding of what is possible, what would be valued by customers and what return on investment would be then it’s a bit of a Catch-22. This is why AppFurnace have started running bootcamps, to help people in companies, organisations and agencies to quickly get up to speed and able to create their own apps to cost effectively test out ideas in the marketplace.
What are you waiting for?
Take a day out of the office, invest a bit of money in your training, and find out how you can get in near the ground level of what promises to be a huge market opportunity.