Come on, get appy

You can do practically anything on a mobile phone these days – least of all make calls or send a humble text message.

A large part of this evolution has been the development of the application (or ‘app’) for smartphones such as the iPhone, BlackBerry, Android, and increasingly, the tablet.

From playing games with friends, to tracking calories and taxi arrivals, all the way through to The Booty Caller (use your imagination); if someone’s thought about it, then a software developer has probably tried to make it into a mobile app.

In fact, the app is now so culturally embedded that it was officially voted the word of 2010 by the American Dialect Society (ADS).

“App has been around for ages, but with millions of dollars of marketing muscle behind the slogan ‘there’s an app for that’, it really exploded,” says Ben Zimmer, chair of the new words committee at the ADS.

“One of the most convincing arguments from the voting floor was from a woman who said that even her grandmother had heard of it.”

Just in case you’re not as savvy as that nanny: this three-lettered word once meant software programs in general. Today, however, the definition has shifted to mean the tiny programs which are downloaded directly from a brand’s website or third-party providers, like iTunes.

Among the freely downloadable frivolities and no-strings attached hook ups, this trend has seen some huge retail names investing in apps of their own.

Pure play retailers, like Asos and eBay, were among the earliest adopters, yet bricks and mortar retailers have been increasingly crossing over too – Tesco, Ikea, Whole Foods Markets, and Walmart to name a few.

Will they make you appy?

While internationally apps are now starting to become expected for the bigger names, they’ve only been a popular buzz word in Australian retail for the last 12 months.

But there currently aren’t any clear leaders in the local market, according to Aden Hepburn, head of digital at retail marketing company, Ideaworks.

“It’s an emerging market here and that space is up for grabs,” he says, adding that “there is a lot of innovation happening.”

It’s this gap which could be seen as a primary motivator for going down the app path. Smart retailers have a chance to be innovators, lead the local trends, and generally gain great publicity for their brand.

Woolworths discovered this benefit when it launched its supermarket app to media furore in August. It has since been downloaded more than one million times by Aussie consumers.

Yet behind the hype there’s significant investment involved, says Chris Watt, GM of Tigerspike, the media consultancy firm behind the Woolworths app, and others like Big W, The Economist, and Vodafone.
He says the best apps give mobile shoppers smooth experiences that seem simple, but in reality, they’re actually anything but.

At least three to six months of development and countless capital investment is involved behind the scenes.

“Innovative apps can be expensive, and retailers should be asking themselves what they want to achieve in the mobile space,” says Ideawork’s Hepburn.

He says this tech trend doesn’t suit everybody and, when it does, the fit invariably needs to be tailored. For many SMEs, “chances are they can get a better result by developing a mobile site instead of an app”.

For those wary, there is another overarching trend which is significant enough to warrant app attention: online shopping.

We’ve all heard the statistics: consumers are increasingly going mobile, with an estimated 50 per cent of Australians owning a smartphone at the end of 2011.

A third of us use these phones to make purchases, with one in 10 transactions now made using a mobile, according to payment gateway, PayPal.

The majority of these purchases aren’t happening via apps. In fact, the market’s so young that there’s currently no app-to-purchase translation statistics available.

Yet there’s no doubt that a traditional shopping app done well does make it easier for smartphone shoppers than browsing information heavy e-commerce sites. With customer ease invariably comes sales, meaning this area of app development is one worth looking at, starting with a true market leader -Tesco.

Traditional shopping gone appy

Tesco is the name that continues to dominate when discussing mobile apps modelled primarily around point of sale – and tellingly it was the inspiration behind Woolworth’s latest software.

The UK supermarket’s app features design focused on simplifying product searches, bookmarking items, and buying items with the touch of a button.

Launched at the end of 2010, it now allows shoppers do everything from use e-coupons, create favourite shopping lists, book home delivery, and even compare items with other retailers. Nick Lansley, head of research and development at Tesco.com, admits this app wasn’t a small feat.

“Groceries are a very weird thing to sell on the internet,” he said at the Online Retailer Expo in Sydney last year.

He says there needs to be incentives for shoppers to buy small ticket items like bread and milk this way, like loyalty discounts, free or very cheap delivery, or special offers.

Tigerspike’s Chris Watt says that it’s also incredibly important to get the technology right for your market.

“You need to understand who your audience is and what their device use is. Some retailers may have a more Android based market if they have a male focused audience,” he says.

For instance, Woolworth’s app is tailored primarily for the iPhone and iPad. This is because research found most of those browsing and shopping on its existing e-commerce site were using Apple products.
Watt also adds that producing a standalone app for selling retail goods isn’t just about taking everything you’ve had online.

“You’d want to look at the two or three things you can offer and do them really well. It’s a less is more attitude.”

“Points of pain” are one area worth considering: solutions that shoppers can’t get from their desktop computer, or even when browsing a more complicated e-commerce site on their smartphone.

This could be realtime store navigation, QR codes, or engaging GPS to help a customer find their lost car in the parking lot after an exhausting shopping experience.

It’s here with these more abstract considerations that the app’s point of difference starts to become really evident.

Scan for more appy

Imagine you’re cooking dinner and run out of olive oil. Instead of writing this down on a grocery list, you grab your smartphone and take a picture of a squiggly barcode on the item’s packaging. This picture will then be decoded by the consumer’s preferred shopping app, where it is added to a grocery list, placed in a shopping basket, or – for some very lucky retailers – purchased right there on the spot.

It’s this simple yet potentially revolutionary shopping moment that’s creating so much excitement around the QR code.

Locally, fashion retailer Sportsgirl has been one of the first to embrace QR, but currently it’s just grazing the surface by using them to get physical shoppers signed up to an online community.

Woolworths and Big W are trying to translate the codes to actual sales like the olive oil example, but this is limited, with few items in Australia currently having the new barcodes. (Tellingly, many beauty products and other packaged goods imported from Europe and Asia increasingly have them.)

Internationally, retailer Whole Foods Market has been leading this trend, with downloadable recipes and charity donations for their instore shoppers.

“Examples like these show how the QR can be used really nicely from a promotions perspective. They’re quite exciting for consumers to use and it can potentially make shopping quite seamless,” says Tigerspike’s Chris Watt.

He says the real potential of QR can be seen in Tesco Homeplus’ much-publicised subway virtual shop, which lets shoppers scan pictures of grocery items, checkout and pay, and then have them home delivered, all from the platform of a tube station.

People who would otherwise have just been waiting for the train have so far increased online sales of Tesco’s products labelled with QR by 130 per cent.

Of course, developing the applications necessary to translate these codes into sales is a huge cost. For those stocking primarily inhouse products, putting the codes on items is also a big consideration.

Third party apps dominant in the US could decrease technology development costs for retailers if brought here, with one called RedLaser so far downloaded more than 12 million times.

RedLaser works by scanning traditional barcodes rather than QR. It then displays basic information like the nearest store the item is stocked – a huge boost for retailers smart enough to list their products.
It also allows customers to compare prices, an innovation that’s potentially devastating for some retailers but hugely beneficial for those offering competitive prices.

Interestingly, Big W has started offering a similar form of comparison via its new app, with interactive catalogues that research prices across stores for the consumer.

“For a bigger business like Woolworths that’s quite scary. It shows that Big W is getting to the front foot of this,” says Tigerspike’s Watt.

Have an appy experience

Retailers not sold on a fully fledged shopping experience, or the investment required in QR codes and other forms of barcode scanning, don’t necessarily need to miss out on app happiness.

In fact, Ideawork’s Hepburn says there’s nothing worse than “apps for the sake of apps” when e-commerce solutions could work just as well.

He says retailers should be wary of investing in things “that don’t add value to the user experience or provide unique, more innovative features”.

One brand that’s been thinking innovatively is clothing retailer Moosejaw. It has released an augmented reality app that asks people to hover their device’s camera above photos of clothed models in a hardcopy catalogue.

The smartphone screen then shows pictures of those same models… but stripped down to their underwear.

This is a titillation which has since gone viral across the internet; reinvigorating the dying relevance of print catalogues and creating buzz for Moosejaw.

While this example involves significant investment and time, there’s third-party apps which retailers should be looking at that don’t cost big dollars.

For instance, a new local app called Sydney Café Culture (pictured below) offers a list of 200 cafes in the city personally visited by its critics, with additional information like public transport, daily offers, and recommendations.

There’s now countless apps like this on the market which retailers should be looking at for coverage or ratings, like Google’s Urban Spoon and cult hit The Thousands.
There’s also apps for retailers that aren’t about sales transactions at all, like innovative concept, Field Agent, which has been released in Australia after success overseas.

Kate Gorman, GM of Field Agent Australia, says the app is “a bit like mystery shopping where retailers don’t disclose data”.

It works by enlisting individual ‘agents’ who do ‘jobs’ that retailers have listed for as little as $100, in return for petty cash or vouchers. Brands like 7/11, Boost, and Hudson’s have so far used it, with

Gorman saying Field Agent is perfect for things like checking up on a franchise’s implementation of head office protocol.

For instance in the US, Walmart found that four days before Valentine’s Day only five per cent of its stores had followed VM promotion directions. This was due to GPS-stamped and time-coded pictures taken of its shelves by eager Field Agent users.

It’s arguably innovation like this, along with perhaps more exemplary examples of shopping apps, which are at the more exciting end of spectrum of application development.

It’s also very early days, but Hepburn says apps that let smartphones be used as a payment device are also a space to look.

“That’s where retailers are getting really excited.”

And then, of course, there’s always Tesco.

* This article first appeared in Inside Retail Magazine. Discover more about Inside Retail’s Australian bi-monthly, printed magazine edition here.

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