Mobile

Who will emerge as the killer app of shopping?

This sponsored post has been produced by Ramneek Bhasin, GM Mobile & VP Product, TheFind, Inc.

Mobile shopping apps are proliferating, but not all will survive. Successful apps provide entertainment or utility. Who will come out on top?

Mobile trends are disrupting consumer experience and business models across all industries and none more deeply than shopping. Mobile has profoundly changed the way that retailers vie for consumer attention, loyalty and share of wallet.

Mobile traffic is critical to a retailer’s overall business. As of 2013, U.S. consumers spend more time engaging with retailers on their smartphones than they do on their desktops.

Also, according to IBM’s holiday benchmark study, mobile traffic grew to 39.7 percent of all online traffic, increasing by 24 percent year over year. Mobile sales were also strong, reaching 21.8 percent of total online sales, an increase of nearly 43 percent year over year.

TheFindSP3

Above: Source: Comscore

As a response, retailers and mobile app developers have taken note, resulting in a proliferation of shopping-related mobile apps.  Shopping apps can be successful in building an audience and gaining loyal usage either as an entertainment app or a utility. Retailers and app developers are becoming increasingly aware that not all popular shopping apps, especially those in the entertainment category, are effective at driving traffic and revenue. Search and utility apps around search, are still the biggest driver of retail revenue.

So, apps focusing on this utility will ultimately be more valuable. In this crowded marketplace, who will succeed, and who will be left behind?

What consumers want

The most popular apps in any category meet consumer desire for entertainment or utility. Consumers are primarily using their smart phones and tablets for entertainment, e.g., Candy Crush for casual gaming or Netflix for streaming content; or for achieving specific tasks, e.g., Google Maps for directions or The Weather Channel app for checking the forecast. If a shopping app is to survive, it must also follow this pattern of providing entertainment or utility.

% US Smartphone Onwers Who Report Using This Type of App

Above: Percent of U.S. Smartphone Owners Who Report Using This Type of App / Source: Nielsen The Mobile Consumer 2013

With so many shopping app choices and limited real estate on their devices, what apps do consumers find most valuable?  To answer that question, a recent Immr study looked at what consumers want in a shopping app.

  • Save money. Allow price comparison, find and apply coupons, and receive deals and offers.
  • Save time. Search across a multitude of categories, stores and brands, get product and store information easily.
  • Shop online and get it locally. Shop digitally, verify where products are available nearby, and complete their purchase in local stores. Same-day delivery options are likely to increase the popularity of this feature.
  • Browse and be inspired. Apps that allow recreational shoppers to see trends, get and share ideas, or check out product reviews.

The consumer app landscape

The landscape of shopping apps is diverse and growing. For example, Google Play lists more than 250 apps in the coupon category alone for gas, groceries, and more.

But consumer app discovery is a challenge. On iTunes shopping apps are generally listed as part of a broader lifestyle category, so consumers are seeing horoscope and dating apps while looking for shopping apps.

As a result, relatively few shopping-related apps that have gained significant traction with a broad set of consumers. In order to better understand this landscape, apps can be categorized by consumer need: entertainment, utility or a combination.

Source: TheFind/immr

Above: Source: TheFind/Immr

Are apps driving retail traffic?

Consumer preference is dominated by apps over mobile web. According to Nielsen, 89 percent of time on mobile devices is spent in apps; but conversely, mobile apps drive only 25 percent of retailer traffic. Retailers have not yet seen the full benefit of this time spent when it comes to shopping as mobile search drives retail traffic more than any other source.

Retailers have an opportunity to bring these trends together and leverage apps that focus on a search in an app experience.

Source: Nielsen/Google Nov 2011

Above: Source: Nielsen/Google Nov 2011

Conclusion

For shopping apps to thrive, they must take notes from apps successful in other categories and ensure they are designed to incorporate elements of entertainment or utility.

For retailers and shopping app developers looking to drive retail traffic, they must leverage the power of search, making it easy for consumers to find products, prices, and coupons.

With mobile traffic making up more than half of all retailer site visits and mobile search driving more than 40 percent of that traffic, it is critical for retailers and shopping apps that want to drive a higher volume of transactions to invest in making their products available to mobile search apps seamlessly.

Will there be only one killer shopping app – a winner that takes all? It’s too soon to tell; however, what is clear is that shopping apps focused on making mobile search experiences better will be important drivers of revenue for the holiday season in 2014 and beyond.

For more information about TheFind, mobile, and the shoppable Web, download our latest whitepaper, “Democratizing the Shoppable Web,” by GigaOm and Immr mobile analyst Dr. Phil Hendrix.

This is the final post in our series. See also: Shopping: Is there an app for that? and 4 Things You Should Know about Ecommerce in 2014.


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