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Mobile Commerce May be the Future, but It’s Far Too Soon for App-Only Strategies

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By: Tim Barrett

Post updated 2/15/2017

There is an awful lot of hand-wringing when it comes to retailers trying to be present on mobile phones. It is not an easy problem to solve, especially considering how few have even created a high-quality shopping experience on desktops, a technology that has been prevalent for decades. With global smartphone possession by household predicted to be nearly 63% by 2020, it is clear that m-commerce will be the next battleground for internet retailing. However, some companies have taken this mind set too far, too fast, forgetting the importance of today’s technology and the average consumer’s reliance on it. The use of app-only strategies which limit shoppers to mobile apps in lieu of mobile or desktop websites is a perfect example of this. It ultimately fails because the inconvenience of being limited to an app alone appeals to a more limited customer base.

Case study: Where Flipkart and Myntra went wrong

In the first half of 2015, Indian e-commerce leader Flipkart and its apparel-focused subsidiary Myntra both announced their intentions to eliminate access to their websites in favour of an app-only approach. This makes sense from a development perspective because it allowed them to focus their resources on an app without having to develop a mobile site at the same time. The move would grow their app userbase by forcing downloads; a strategy that trusted in the brand loyalty of their everyday shoppers and the general popularity of smartphones.

The problem is that people don’t regularly use a large number of apps. For as often as people are on their phones, it is common knowledge that time spent is in a concentrated number of apps. There are structural and incentive issues. Each app demands a certain amount of data, storage space and attention, most of which are limited resources. According to the Pew Research Center “Almost half of app downloaders report that they use five or fewer apps at least once per week, and just 16% indicate that they use more than 10 apps on a regular basis.” That might only cover the US, but it’s not hard to apply the same logical globally. Digital offerings are both plentiful and low-cost. It is why consumers have flocked to them. However, for retailers this just means that it is that much easier for those very same users to walk away from their digital “solution” if it causes more problems.

The move to app-only was so unsuccessful that Myntra reported a 10% dip in sales just a month after the change and both companies announced their intention to reinstate their websites. Moving forward, Myntra expected 15-20% of its sales in 2016 to have come from its website. Flipkart ended up developing a mobile site called Flipkart Lite, which mimics the experience of an app, but provides the flexibility of not actually having to download anything. This is a smart move because it mirrors the app, gives potential shoppers flexibility, and creates the sort of seamless experience that is often sought after in e-commerce, but the company should have started with this.

App-only makes sense when you want to test a strategy on a limited basis

While there are no stats yet to back up the viability of this strategy, Amazon’s use of app-only for its new Prime Now program actually has some merit. Prime Now is a fledgling service which promises one to two hour delivery for Prime members in certain densely populated zip codes. It’s a relatively new business which utilizes a new workforce and almost certainly isn’t profitable yet which means that it’s not something that should be scaled very quickly. Having the service be app-only for a limited time allowed Amazon to organically limit its user base despite large ad campaigns because many potential users would not be inclined initially to download yet another app.

The company has since expanded the program as of May 2016, turning it into a more integrated web experience, with mobile and desktop sites in addition to the app. Most interesting is the lack of fanfare and promotion that Amazon has put behind this move compared to when the firm rolled out the program in its app-only form. Expansion into these other web-based access points makes it clear that Prime Now is ready for more users, but the fact that the websites are not prominently promoted by Amazon is a sign that it is still looking to scale the service gradually.

It’s all about what the shopper wants

App-only may sound reasonable in a world where mobile matters more, but the reality is that limiting shopping to an app can put off a number of people for reasons ranging from customer experience to the limitations of mobile devices. Some people prefer the experience their desktop provides for certain occasions and turn to mobile devices for others. Mobile apps may provide better data to their developers and give them valuable real estate on a phone’s homepage, but both of these things presuppose a level of loyalty by limiting users to what the retailer wants. In the future it will be the businesses that approach customers on their terms that succeed, not the other way around.

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