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Balancing third-party and branded apps during the holidaysBy
Retailers will have their hands full this holiday season trying to lure consumers into their own branded applications, while also keeping a close eye on how products and offers appear in third-party apps.
It is also no longer enough for retailers to only focus on their own branded app. Instead, marketers need to be looking at all the shopping apps available to consumers and figure out how to leverage them for both brand building and driving in-store traffic.
“Overall, retailers are more focused on their own app, but they’re not ignoring the third parties,” said Nikki Baird, managing partner at RSR Research, Miami, FL.
“Those aggregator-type apps can be a strong driver of mobile traffic, so retailers are making sure to at a minimum provide the most accurate information to those apps, so that the retailer’s best offers are displayed to shoppers,” she said.
“Retailers are always going to be more focused on their own apps first – they have so many more options for how to engage with a shopper in that medium, and they have far more control over the information they collect and what they do with that information to drive more personalization. More than anything else, it seems retailers are looking to their branded apps to help drive personalization.”
Consumers are undoubtedly coming into bricks-and-mortar stores this holiday season to price compare and browse merchandise via their mobile devices.
Therefore, retailers’ best defense this year is to be prepared for tech-savvy shoppers with their own shopping tools, whether they are in a branded or third-party form.
Apps will play a particularly strong role for driving commerce this holiday season, according to recent research.
For instance, a recent study from Pricegrabber found that 32 percent of smartphone owners plan to download a shopping app specifically for the holidays.
Thirty-one percent of the smartphone users in the study already had a shopping app downloaded. Of these users, 82 percent of users said that they would use their devices this holiday season to save money (see story).
Additionally, consumers are using apps for all parts of the shopping journey from researching, creating wish lists, finding nearby stores and checking in-store inventory and shopping.
Even though the group of shoppers using apps to actively comparison shop might be small this holiday season, they pose a serious threat to retailers.
“All the reports on consumers seem to point to shoppers generally not being aware of showrooming, but the people who are aware of it use it a lot,” Ms. Baird said.
“I only see it growing as awareness spreads,” she said. “Store-based retailers have a big task ahead of them to reduce the impact of showrooming – they have to make the store experience so compelling that no customer ever feels the need to pull out their phone. I don’t think anyone is going to have that figured out for this holiday season, though.”
The case for branded apps
Retailers’ No. 1 priority with apps is their own version because of its strong integration with loyalty.
Additionally, branded apps keeps companies in control of how users shop.
The growth of tying loyalty with location location-driven app programs in the past year offers retailers a way to create a strong, consistent presence on a mobile device.
Take Apple’s Passbook for example. Although some brands have been quick to jump on board, there is still a huge untapped opportunity for marketers to leverage their own branded apps with Passbook.
Personalization is key in taking retailers to the next level of mobile.
By incorporating location-triggered offers into their own branded apps, retailers can both drive in-store traffic and track users throughout coupon redemption.
“Most larger and known retailers seem to be more focused on their own apps since they can then control the experience and the message and build their brands appropriately,” said Ludo Collin, CEO of EachScape, New York.
“Additionally, they are using their channels in social media, which has mobile usage as a major component,” he said.
Compared to branded experiences, third-party apps can be tricky for retailers to control.
However, consumers are increasingly relying on apps that bundle deals and offers into one place.
Additionally, these companies might also offer consumers rewards for shopping through a third-party app.
For example, last year Amazon rewarded consumers who shopped through the company’s Price Check app with a five percent discount (see story).
“We are certainly seeing more influence this holiday season from third-party apps,” said Rodney Davenport, senior director of business research and intelligence at Alliance Data, Plano, TX.
“What I’ve seen from afar and talking to our businesses is that the consumer is leaning on them today and over time, third-party apps will become a major force,” he said.
One way that retailers can battle third-party apps is by offering price matching for deals that consumers find from their handsets.
By keeping a close eye on how a retail brand is portrayed in an app, retailers can also build brand affinity, which can be used to convert a user into a coveted shopper.
For instance, retailers that link to mobile sites from third-party apps should be promoting their own mobile apps prominently at the top of the page.
According to recent data from Alliance Data, 44 percent of smartphone owners surveyed said that they would be very likely to use their device to comparison shop while in-store.
“We are at the beginning of the tug of war with branded apps that are playing catch up over the past 12 months,” Mr. Davenport said.
“Retailers’ main thing to catch up with apps is to bring new functionalities to them,” he said.
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York
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