Apps

With the proliferation of smart phones, mobile apps are increasingly being used to make our lives easier or more interesting. And as they assist us in performing all kinds of day-to-day tasks, it is important that marketers of the products and services employed for those tasks, are aligned with this cultural change.

According to Statista, as of June 2016, Google Play has 2.2 million apps available for download, and Apples App Store has 2 million, and these numbers are increasing at a hectic pace. At the Apples App Store, for instance, the app count has increased by 33% over June 2015.


Average number of apps used and time per month, per person - source Nielsen

Exhibit 13.6   Average number of apps used and time per month, per person. (Source Nielsen, US study).

While the apps universe is very large and growing, the number of apps used per person in the US, has hit a threshold. Based on data shown in Exhibit 13.6, obtained from a Nielsen study, the number of apps used by the average US resident remains close to 27. What increased quite substantially, is the time spent on the apps.

Another study conducted by Ipsos, on behalf of Google, revealed that of 36 apps on average, installed on a user’s smartphone, 9 are used daily, 18 are used less frequently, and 9 are never used.

The data suggests that the vast majority of the roughly 5 million apps available today are virtually unheard of, and rarely used. As per statistics for August 2016, provided by Androidrank, there are 19 applications on Google Play with over one billion downloads on unique devices; all are owned either by Google or Facebook. Another 2,613, representing 0.12% of total Google Play apps have at least 10 million downloads. It is a fairly concentrated market. While marketers are understandably keen to jump on the apps bandwagon, few of them are likely to succeed.

The most common types of apps used daily are social/communication, gaming, music and video/movies apps. Besides these mega sectors, there exist a large number of other categories, where apps have gained popularity, and changed peoples’ way of living. For instance, travel apps like Uber and Car2Go offer affordable, hassle free services. Search and discovery services apps help people find the facilities they seek. These include well-known brands like Foursquare and Localeur, as well as others like P&G’s Charmin SitOrSquat, a bathroom finder which tells users where they can find the nearest bathroom. Mapping apps like Google Maps help us find our way. Mobile payment apps facilitate payment through mobile phones. These include Apple Pay and Samsung Pay. Starbucks too has an app that lets you conveniently pay for purchases, earn Stars and redeem rewards. Apps like Expensify and Concur help people with their personal finances, and there are a host of other apps that help in areas of personal and professional productivity.


Ikea Catalogue app: Place Ikea furniture at home with augmented reality

Exhibit 13.7   Ikea Catalogue app: Place Ikea furniture at home with augmented reality.

The use of augmented reality (AR), i.e. superimposing computer-generated images over a real image, is increasing in apps. AR can be quite immersive and has been used to create a wide array of compelling applications from gaming to retailing. For instance, in 2016 Pokémon Go became a worldwide phenomenon, getting people out of their homes to seek virtual treasures.

In retailing, one of the finest examples is the Ikea catalogue app (Exhibit 13.7) which helps customers visualize how Ikea furniture will look in their homes, by giving them a virtual preview of the item at the location where they would like to place it. This greatly reduces risk of buyer remorse — customers are making informed decisions based not only on what the furniture looks like in the catalogue and in the store, but also, importantly, based on what it looks like where they would place it in their homes. And, as can be seen from the ad in the exhibit, the app is very creative and engaging. It also contemporizes the iconic Ikea catalogue, which has always been central to Ikea’s marketing strategy.

For banners like Ikea and Starbucks, and brands like Charmin, Apple and Samsung, an app is essentially a marketing tool. But it is also a product or service in itself. And for it to wriggle its way into the limited repertoire of apps that its target consumers use (27 for US residents), it needs to be marketed well.

The basics of marketing are not very different for apps, yet a couple of aspects are of greater importance. Since the vast majority of apps are still a novelty, and unheard of, they need to be discovered. The usual approaches like search and targeted advertising apply here. And good content on the internet will undoubtedly aid discovery. For instance, when you google “find bathroom”, Charmin’s SitOrSquat website usually appears near the top of the first result page.

The second aspect that is crucially important for apps, is repeat usage. In that sense, an app is like an FMCG product — it succeeds if enough people never cease to use it. The only way an app can ensure that people remain engaged is by serving a useful, practical purpose for its target market, on a continual basis.

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