A Heavy Burden Falls on Apps for Digital Business

When I tapped Linkedin App button unconsciously this afternoon, an interesting news popped up into my eyes “Consumers Spend 85% Of Time On Smartphones In Apps, But Only 5 Apps See Heavy Use“. The first thing came to my mind was that no wonder a friend of mine who worked in App development wanted to change a job recently.

It seems very hard to determine whether an App has succeeded or not.

Let’s take a look at the data.

From 2012 to 2014, people increased time spent on Apps from 23 mins to 37 mins but the number of apps that people accessed per month seemed not to change a lot. 

8921_smartphone_wirepost_d1.jpg

Nielsen wanted to suggest there’s an upper limit to how many apps consumers can use on a monthly basis.

A new data on app usage comes from a Forrester Research study that analyzed 2,000 U.S. smartphone owners to better determine how users engage with the apps they have on their phones.

According to the data, most time spent Apps category ranking is :

  • Social media ( Facebook, Instagram, Twitter…) 14%
  • Search engine (Google) 12%
  • Messaging ( What’s App, WeChat..) 8%
  • Game and Music 6%
  • Media (Weather, sports, fashion…) 3%
  • Others 57%

The struggle of staying in the 5 spots of people’s mobile never stops. But can we say Facebook is a successful App? What kind of criteria should we use to say that?

Usage is a key point but how these Apps generate profits should be brought up on the table.

We all know that most of the tech companies’ revenue comes from advertising sales. Are all these ads on Apps effective? Is the amount of marketing expense on Apps working? Studies are still on how to evaluate digital marketing.

However, here is a number might imply something: in U.S.Only 15% of web shoppers’ money is spent on Mobile shopping.  It seems the ads have not affected the purchases directly. Maybe you will say that people see the ads and then go to the shops. That is true. Some purchases are expensive and people want to touch the real products. But if the products are not likely to be bought online, why should the companies put ads online? The value chains linking ads and purchases seem to be broken.

Do the companies have better ways to do marketing? Does digital marketing have any room to improve?

The reasons why people love to browse products online but not just buy one can be:

  1. Products delivery:  Recent studies suggest that 62 percent of American shoppers find shipping costs to be a significant deterrent to online shopping. The same study shows 40 percent of Canadian shoppers are too impatient to wait for shipping.
  2. Experience on Mobile shopping: loading time, page looking, and operations on mobile can be better.
  3. Preference of touch the real products: studies above show that 55 percent of Canadian shoppers prefer to see or touch products in-store. Some companies started to move online shopping to offline. Amazon took the strategy to let their customers feel the products in stores.

All these shows an insufficient collaboration between “online” and “offline”. Platform concept is a key for digital business and Apps, acted as a core in the platform, should integrate every section to provide a win-win situation to corporates and consumers. Once the chain was linked, the speed of online purchases would be so fast to boost the economy, bringing more profits to corporates.

A lot of innovation happens in the digital business. Apps are going to make new surprises to the world.

 


Sources:

https://techcrunch.com/2015/06/22/consumers-spend-85-of-time-on-smartphones-in-apps-but-only-5-apps-see-heavy-use/

https://techcrunch.com/2015/06/11/time-spent-in-apps-up-63-percent-over-past-two-years-but-apps-used-monthly-shows-little-change/

http://mobilemarketingandtechnology.com/2017/09/14/why-is-webrooming-causing-mobile-shoppers-to-spend-only-15-percent-of-their-money-how-can-advertisers-bridge-this-gap-by-chaitanya-chandrasekar-co-founder-ceo-quanticmind/?utm_source=linkedin&utm_medium=social_org&utm_campaign=pr_mmktt2017

7 comments

  1. I’m usually bearish on new apps that promise convenience … especially for clothing ect. Uploading a scan of my face to virtually try on glasses just seems like a hassle. I also think Amazon Prime has spoiled us when paying for shipping on other websites. I catch myself unwilling to pay for shipping (not realizing I paid $100 upfront).

  2. Your blog post recognizes an aspect of app use that is typically forgotten. Success measured by ad revenue, as well as the inconvenience that app shopping poses on consumers. I can relate to this directly, because when I am on Facebook and a recommended clothing article pops up and I click it, it redirects me to the clothing companies personal app to download and then search the store. I can see how, while there is advertisement exposure to consumers via social media apps, it usually ends there and rarely ends in a complete purchase.

  3. This is an interesting take on online advertisements as I just came over from reading Whitney’s insider perspective on the ad agency, Digitas. I am quite honestly surprised that only 15% of American shoppers choose to spend their money online as it seems everyone I talk to online shops! However I guess this could be skewed as I believe it is the younger generations that are more likely to spend money online. To go along with that, I would be interested to hear what your thoughts are on the future of online advertisements as perhaps their effectiveness will grow with future tech-savvy generations. And yes I agree with you that there is always room for improvement with a customer’s online shopping experience from reducing lag times and decreasing shipping costs.

  4. There is a real struggle today in working to quantify how powerful or successful apps are. Gross amounts of money are going into these digital companies who are operating at zero to negative profit. It will be interesting to see in the next coming years which ones “succeed” and where investors went wrong.

  5. There are many great statistics here, but I think that the most important one is that only 15% of web shopper’s money is meant on mobile shopping. This means that consumers willing to buy online are unwilling to buy directly from their mobile device. There are several implications to this, most of them related to the fact that if no one is buying from mobile, are advertising campaigns on mobile platforms worth the cost? I think this would depend on how many people see an ad on their phone, and then buy the product from a computer or in-store. Unfortunately, that number would be tough to quantify. I do think, however, that this percentage will increase in the coming years. After all, it was not that long ago that we were uncomfortable buying something off of the computer instead of purely in-store.

  6. Nice post, but be careful of blanket statements. “We all know that most of the tech companies’ revenue comes from advertising sales.” This is true of Facebook and Google, but not of Amazon, Apple, Microsoft, Uber, Salesforce, or AirBnb.

  7. It is very interesting to look at online shopping from the perspective that 62% of people in the US think the shipping cost that comes with buying stuff online is too expensive for people. This just goes to show that physical stores will still be around for a while. In fact, maybe if Toys R Us adjusts enough to the digital world, they will be able to adapt and cater to people who want to avoid these shipping costs, waiting costs, and the inability to touch and feel products.

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