Retailer App-titude: Understanding Consumers & Apps

Like many, I have a love affair with my smartphone. I take it everywhere, I feel lost without it, I buy it accessories and I protect it from harm. But my smartphone wouldn’t be as dear to me without applications, or “apps.” Without apps I wouldn’t be able to keep in touch with friends, identify music, check the news, know the weather forecast, track my running or shop.

According to CEA’s 16th Annual Ownership and Market Potential Study, 64 percent of U.S. households now own at least one smartphone. The plethora of apps is expanding beyond smartphones into other categories as well; computing via tablet computers and video via smart TVs. Nine in 10 (90 percent) tablet owners use apps on their device and half (54 percent) of smart TV users have apps on their TV, according to CEA’s recent study on apps, The Intersection Between App and Hardware.

What can retailers do to become part of the app landscape? Specifically, what can consumer electronics (CE) retailers do to ensure they’re an app beloved by consumers?

What Consumers Like & Dislike about Apps

Six in 10 (60 percent) online consumers enjoy using apps. Half (55 percent) of online consumers who have apps installed indicate that apps make life easier by providing utilities as advanced as monitoring your house or as simple as checking the weather. While generally apps have a tendency to make life easier, they can have the opposite effect as well, and annoy consumers. Top frustrations reported by online consumers include faulty apps or apps with glitches. This includes freezing, abruptly closing and slow speeds. Outside technical issues, top frustrations include in-app advertisements. While malfunctions are not always controllable, retailers should be attentive when using in-app advertisements, opting for more targeted ads through location-based technologies – a part of the future opportunity for retail apps.

The Future of the App

If retailers would like consumers to enjoy using their app, the first step is exposure. Half (58 percent) of consumers learn about apps from family, friends and co-workers. Beyond personal connections, 60 percent of online consumers indicate the sheer volume of apps is generally overwhelming. Consequently, app discovery averages below 25 percent for many channels such as social networking sites, advertisements and search engines with consumers indicting no particular source for learning about apps. Therefore, in the fight to be noticed in the sea of apps, advertising and grassroots campaigns to encourage word of mouth are the best approaches for retailers.

Regardless of the challenge brought on by the abundance of apps on the market, having a mobile presence is vital for retailers. According to CEA’s 16th Annual Ownership and Market Potential Study, 64 percent of households own a smartphone and 45 percent of households own a tablet. Online consumers report having an average of 28 apps downloaded to their smartphone and tablet. Those between the ages of 25 to 34 have more apps installed on their devices compared to other age groups, according to CEA’s A Tale of Two Techs – Smartphone and Tablet Adoption Usage. Millennial consumers, specifically, are using their mobile devices more than any other age groups while shopping. In CEA’s study, Millennials – The New Face of Retail, CEA found that one in five (17 percent) Millennials use their mobile device while in the store researching a CE purchase. Millennials research activities include comparing prices, searching for additional information and reading customer ratings and reviews.

App-titude for Retailers

What does this mean for retailers? First, if they haven’t already, retailers need to build an app. If you already have an app, at a minimum, it should provide additional information about your store, products and services, and share customer reviews, so consumers will be less likely to seek apps that might lead them to a competitor. In addition to your app being an information source about your store, product and services, one-third (32 percent) of online consumers are interested in trying mobile payments (i.e., making payments in physical retail stores) via apps, according to CEA’s app study.

Finally, the buzz around the retail and marketing app space for the past few months has been focused on the updates to iBeacon, due to the release of Apple’s iOS 7.1. The new operating system is ushering in major improvements and a new era to location-based technology, especially for retailers. For retailers, the improvements to iBeacon mean location-based tracking is available regardless of whether or not an app is open.

These app developments are opening up the possibility to customize offers and drive additional foot traffic that was previously a pipe dream, due to app limitations. As retailers, specifically brick-and-mortar stores, enter a new era of in-store shopping, apps will play an important role to help consumers find what they need. Retailers must put on their ‘A-game,’ as in ‘App game,’ to support shoppers’ needs and desires.

For more details on CEA’s recent app study or other CEA research cited in this article, visit: CE.org/research.

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