retail-app-report-november-2015

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retail-app-report-november-2015

Apadmi’s Retail App Report:

The importance of integrating

mobile into a retailer’s

business model

Study produced by Apadmi, the UK’s leading mobile retail expert | November 2015


Executive summary

97%

of Brits who own a smart

phone usually take it

shopping with them.

The majority of Brits (65%) use

their favourite retail apps at home.

41% use them on the move and

31% use them whilst in store.

If an app was free of charge, 74%

of smartphone users would be

more likely to

download it.

43%

said they would be more

likely to download an app

if it allowed them to browse and buy

products quickly and easily

41%

said if it complemented

the in-store and website

shopping experience

40%

said if it provided offers

on products they purchase

At present the majority of Brits

(55%) go to the store and also use

the website of their favourite retailer.

Only 11% of people use all channels

including the store, the website and

the app, demonstrating the need for

retailers to implement a strong omnichannel

strategy and address app

engagement among it’s customers.

85%

of smartphone

users in the UK

use retail apps.

71% of Brits

surveyed think that

there is a gap in the

market for more

improved retail apps.

When asked questions

around retail loyalty schemes,

51%

said they own more

than one loyalty card,

while

46%

said they regularly

collect points on a loyalty

card and spend them

55%

11%

Our research shows that

a fifth

of adults in the UK use

their favourite retail apps a

couple of days a week.

With just 2% using

them every day.

80%

Interestingly,

80% of people

would be happy

to collect loyalty

points on their

phone, including

when they walk

around the store.


Executive summary

A significant 61% of people would stop

using a retail app if it was slow and

unresponsive. And 26% would think less

of a retailer if its app was poorly designed.

We asked our respondents what

their favourite features of retail

apps are

53%

said being able to

browse products

49%

said offers and

promotions

45%

said a loyalty

scheme

42%

said click

and collect

Our research also

discovered that 35%

of Brits would be

worried to pay for

products using their

phone because of

security issues.

Personalisation is key.

67%

17%

of people would want

messages and deals that

are personalised to their preferences

38%

would be happy for

an app to recommend

similar products to the ones they’ve

already bought

Only 17% of Brits think that

mobile apps offer a better user

experience than a website.

of respondents already use a

26% retail app to purchase items

don’t use a retail app to

41% purchase but would like to

In terms of how apps communicate with customers,

44% 40%

of Brits said that they

would be annoyed if an

app sent them irrelevant

content or offers

said they would delete

an app if it sent lots of

promotional messages that

were not relevant to them


Hello and welcome to

Apadmi’s Retail App Report.

My name is Nick Black

and I’m the CEO of Apadmi,

the UK’s leading mobile app

developer. We develop apps

for clients such as The BBC,

The X Factor, The Guardian,

BT, Aviva, EE, Lexus and

many of the UK’s most

well known retailers.

Retail is an industry that is constantly

evolving. The proliferation of mobile

throughout our lives is dramatically

changing the way that consumers

interact with retailers and vice versa.

The introduction of retail mobile apps

has helped to improve the shopping

experience for many consumers, and

with more people moving online and

onto mobile to shop it’s also enhanced

sales and revenues for retailers. And

this year having a good mobile site

has become even more important for

retailers, as Google now ranks mobile

friendly sites above those that are not.

As well as traditional mobile retail

experiences, we’re seeing an influx

in new technology too that is helping

to shake up the industry. Technology,

such as iBeacons, NFC and beyond,

is allowing consumers to have a

personalised and interactive relationship

with stores like never before.

With all of these exciting developments

taking place, the mobile retail industry

is only set to flourish. In 2014, online

consumer spending in the UK retail

market surpassed £100 billion for the

first time, a 14% increase on 2013, and

mobile devices now account for around

a quarter of total online retail sales in

the UK. Recent research from Barclays

also suggests that UK consumers are

set to spend £53.6bn a year using their

smartphones and tablets by 2024, so

it’s important that retailers get ahead

of the game and learn how to make

the most of this exciting opportunity.

That said, there is still a way to go.

04


A study by the Centre for Retail

Research found that the UK retail

industry is sacrificing £6.6bn per

year due to lack of investment into

its mobile offering and it’s this lack

of investment which could be why

90% of people delete apps within

the first year.

So to ensure retailers really take

their mobile strategy seriously

and offer customers a convenient

and personalised mobile shopping

experience that they want to keep on

using, we’ve commissioned our own

research to get an insight into how

smartphone shoppers in the UK are

using retail apps at present, and their

thoughts of where they want them to

go. We will also offer tips for retailers

on how to provide the best mobile

app experience.

Who is this report for?

This report is aimed at retailers who

are interested in learning how mobile

technology might fit in with their

strategies, whether they be developed

or not. While a number of retailers

have already developed apps and are

exploring new technologies, are they

really hitting the mark with consumers?

As well as exploring consumer’s

thoughts on the retail apps currently

out there, the report will look into how

mobile apps and technology can help

reshape the retail industry, and we will

discover how apps can help retailers at

every touching point with consumers.

For example, how apps can best help

with customer acquisition, customer

loyalty and retention, customer

experience and customer purchase.

With this we want to help the retail

community understand what mobile is

capable of, where it’s heading and what

customers want.

After reading this report, it’s our hope

that some companies will be inspired to

launch their own retail apps, or review

and refresh others that may already

have been created. We want to ensure

that businesses don’t just build a retail

app for the sake of it; rather, they build

an app that is genuinely valued by its

users and one that provides real benefit

for the companies commissioning them.

05


So what are

the key findings?

To better understand the growing

impact of mobile devices in the retail

sector, we asked 1,000 UK smartphone

users a number of questions to find

out how they are currently using

their phones for shopping and, what

they think about retail apps. We also

explored their preferences and how

the shopping experience, using mobile,

could be improved.

1000

97% of Brits

who have a

smartphone

usually take

it with them

when they

go shopping

With the vast majority of Brits taking

their smartphone with them when

they go shopping, it presents a

massive opportunity for retailers to

take advantage of. As well as offering

mobile payment options, retailers could

utilise indoor location technology such

as Bluetooth Low Energy (BLE)

to interact with customers. One

way they could do this is by sending

tailored notifications to a customer’s

phone, depending on where they are in

the store, to engage with the customer

and encourage them to spend or take

advantage of offers.

06


Retailers need to invest more

in their omni-channel strategy

1%

To maximise sales, retailers ideally

should be connecting with users on

multiple channels and touch points.

Omni-channel is the new marketing

buzzword, which means retailers

need to provide a seamless shopping

experience regardless of the device or

channel. In other words, if a customer

wants to browse and view a product

online, buy it using their phone, and

return it by dropping it off at the store,

they are able to do so with ease.

However, our research has revealed

that not all retailers are using each

channel to full effect.

22%

55%

11%

1% 2%

8%

Brits are mainly (55%) interacting with

their favourite retailer by visiting the

store and using its website. 22% of

people only shop in store, 8% use its

website only, and 2% use its website

and app without visiting the store.

Just 1% use the app only and 1% go

to store and use its app. And only 11%

shop in store, visit their website and

use their app.

1%

Retail apps are on the rise but

more can be done to encourage

continued and frequent use 65%

The use of retail mobile apps rose

by 174% in 2014, and consumers

continue to use mobile apps at

considerably high rates.

Our research found that 85% of

smartphone users in the UK currently

use retail mobile apps. And of those

that have downloaded them, 20% use

their favourite retail app a couple of

days a week, and 19% use it once a

week, which is great news. However,

18% usually use it once or twice then

forget about it. 16% use it a couple of

days a month and only 2% use their

favourite retail app every day. It’s clear,

therefore, that retailers have some

work to do to increase usage and

engagement of their apps.

We also wanted to discover when

people are more likely to use retail

apps - the research found that:

the majority said

they use it at home

41%

said they use it

whilst on the move

31%

use it in-store

19%

use it when they

are at work


30% Payment

Most people mainly use retail

apps for browsing products

29% Product information

Based on the aforementioned data,

it’s clear retail apps have a growing

user base, but we wanted to go

one step further to find out what

consumers actually used the apps for.

Below are the findings:

12% Delivery solutions

53% Browse products

45% Loyalty scheme

49% Offers and promotions

42% Click and collect

33% Find nearest store

30% Payment

29% Product information

12% Delivery solutions

Despite customers mainly using

apps to browse products, 27%

admitted they would want a retail

app to do more than just display

products that they can buy.

08


Consumers think retailers could

do more for mobile shoppers

When asked why they thought more

could be done to improve retail apps,

respondents stated that current apps

are slow (21%), they don’t provide

enough offers or a loyalty scheme (34%),

functionality could be better (56%),

payment methods could be easier (43%),

apps could offer better information and

advice (27%), and apps could be better

tailored to my needs (44%).

Our research found that a

sizeable 71% of UK smartphone

users think there is a gap in the

market for more improved retail

apps. Only 29% did not agree.

21% too slow

34% no offers/loyalty scheme

56% poor functionality

43% difficult payment methods

27% poor information/advice

44% not tailored

What’s more, the research

also found that only 17% of

those surveyed think mobile

apps offer a better user

experience than a website so

there is still lots that can be

done to improve the retail app

experience for consumers.

There is no reason why apps,

in todays ‘mobile first’ society,

can’t become the key delivery

mechanism for consumers.


So what would make a

consumer download a retail app?

Our research showed that consumers really value apps that are helpful and can help

them to solve a challenge, which illustrates why retailers need to think more smartly

about how their apps touch customer acquisition, loyalty, promotion, sales and

payment, for example. In terms of an app’s functions, the study found that:

43%

41%

40%

would download an app if it

allowed them to browse and

buy products quickly and easily

would download it if it

complemented the in-store and

website shopping experience

would if it provided offers on

products that they purchase/use

39%

29%

26%

would download an app if it

offered a loyalty scheme that

they could get involved with

would be inclined to download an

app if it is more convenient and

easier to use than a website

are interested in apps that are

genuinely useful and enhance

the shopping experience

22%

would be more likely to download

an app if they could pay for their

shopping on it without hassle

74%

The survey also revealed that

74% of UK smartphone users would

download a retail app for the main

reason that it is free of charge.

In terms of recommendations,

47% would download an app

if it had good reviews, 12%

would download it if a friend

recommended it, and 11%

would be swayed to download

it if they saw it advertised

and it looked useful.


Retailers need to reinvent

loyalty schemes for mobile

Loyalty schemes are a great way to

acknowledge a customer’s loyalty by

adding value to their visits and giving

them a reason to return in the future.

Customers value loyalty schemes as

our research found that 51% of Brits

own more than one loyalty card, and

46% regularly collect points on their

cards and spend them.

But as more consumers move online, it

would be wise for retailers to integrate

their loyalty schemes into their app as

our research found that 80% of people

would be happy to collect loyalty

points on their phone, including when

they walk around the store. 29% would

also be happy to share their location

with a retail app to gain incentives and

loyalty points in the store.

20%

At present, only 20% of UK

smartphone users already interact

with a retail loyalty scheme on their

phone. But our research found that

consumers can see the benefits and

many would be keen to get involved

in a mobile loyalty scheme.

!

47%

would prefer to collect loyalty points

on a mobile app rather than a card to

free up space in their wallet

20%

admitted they sometimes forget to bring

their loyalty card with them when they

go shopping, which they find annoying

260

63%

said they would be more likely to bring

their phone with them than a loyalty

card when they go to the shops

36%

also think it would be easier to know

how many loyalty points they had on

their phone than a loyalty card


What this shows is that UK

shoppers are open to mobile

loyalty schemes and it’s now

up to retailers to invest in new

and innovative ways to connect

with their most loyal customers

through mobile apps.

Customers appreciate investment

retailers make, especially when it

is rewarding and thanking them

for their loyalty.

Slow and unresponsive apps will

cause shoppers to switch off

The biggest

bugbear for mobile

users is when a

retail app is slow

and unresponsive,

with 61% saying

they would delete

the app if they

came across this

problem.

And if shoppers experienced an issue

with a retail app, 27% would abandon

the task rather than try again.

If an app was poorly designed, just over

a quarter of people (26%) would think

less of the retailer and go shopping

elsewhere.

User experience is therefore extremely

important, and retailers would benefit

from investing properly in an app to

ensure it provides a seamless, quick and

intuitive experience. Retailers could

also consider offering real time support

if an issue with the app occurs, as 27%

of Brits would appreciate this and be

more likely to keep the app as a result.

12


While mobile payments are set to increase,

consumers still hold concerns

As well as increasing sales on

mobile, retail apps are shifting the

way retailers drive in-store sales.

Customers are using their retail mobile

apps to research and compare goods

before they step foot into a shop, and

are also beginning to use them to pay

for items in-store. And thanks to new

technological developments, there

are a number of other ways that apps

can help to improve store interaction

for customers, such as sending

relevant offers to them using the

shopper’s location. These are slowly

being introduced and are hoped to

transform the shopping experience.

9% didn’t

know they

could

24% have

no plans to

26% already

use an app

41% would

like to

In terms of our research, it found that

26% of smartphone users already use

a retail app to purchase items, 41%

said that they don’t currently use a

retail app to purchase items but would

like to. 24% said they had no plans to

use mobile payment and 9% said they

did not even know that they could use

their phone to pay for products on an

app or in-store.

With the introduction of Apple Pay

opening up a range of new possibilities

when it comes to making contactless

payments in stores we wanted to

determine how popular it is at the

moment. Because it’s so new, only 8%

of respondents said they have used

Apple Pay to pay for products in-store

but a further 49% said they would

be keen to use apps that use modern

payment options such as Apple Pay.

Security issues are often cited as one of

the main reasons why people would not

use mobile payments and 35% of our

respondents agree that they would be

worried to pay for products using their

phone because of security concerns.

Only 19% would be happy to store

their card details with the app to make

it easier to pay for products next time.

What this shows is that retailers have to

do more to educate consumers around

the benefits of mobile payments, and

alleviate any fears about security by

ensuring measures are in place to

ensure a secure and robust app.


Personalisation is key

Apps are a great tool for retailers

because they can provide an

unprecedented amount of data that can

be used to build up a picture of each

customer and their shopping habits.

Smart retailers should be using this

data to personalise and optimise the

retail experience for their customers to

increase customer loyalty and drive up

sales. For example, Footclicks is a new

technology that has been developed,

which uses the power of shoppers’

smartphones to help retailers to locate

them indoors, where GPS won’t work.

It triggers personalised, contextual rich

messages, offers or loyalty reminders

by location, movement, dwell time and

even the weather outside.

Our research found that customers really value a

tailored retail experience and get exasperated with

retailers who are sloppy in their marketing efforts.

For example:

84

44%

of people surveyed said that they

would get annoyed if an app sent

them irrelevant content or offers

40%

would even go so far as to delete an

app if it sent them lots of promotional

messages that were not relevant

21%

said they often don’t download

retail apps because they think they’ll

overload them with messages and

irrelevant content

67% of consumers said that if an app sent them

message and deals they would want them to

be personalised to their preferences, and 38%

would be happy for an app to recommend similar

products to ones they may have bought.


What lessons can be

drawn from these findings?

Based on the findings of our survey

about retail mobile app usage, we’ve

learnt that it is essential for retailers

to focus mobile on real business

touch points, such as customer

acquisition, loyalty and marketing.

With so many consumers using retail

apps (85%) it’s important that retail

companies have an app that stands

up to the brand’s reputation and

contributes to its success. If retail

companies don’t invest in quality

mobile apps, for example they have

a slow app or it is not innovative in

its approach, they’re missing out on

countless opportunities to interact

with their customers and drive sales.

And it’s clear from our research that

customers think more can be done to

improve the mobile retail experience.

There has been much talk around the

‘death of the high street’ in recent

times, particularly due to the threat

of ecommerce platforms. However,

by digitalising the physical shopping

experience, effectively embracing

ecommerce and creating a seamless

omni-channel strategy, retailers are

highly likely to survive and succeed.

By improving a retailer’s presence on

all channels, there won’t be a weaker

link. An example of how retailers could

innovate the high street experience is

by encouraging customers to interact

in-store using apps.

With nearly all smartphone users

(97%) taking their phone with them

when they go shopping, this presents

huge opportunities for retailers to

tap into. Currently only 31% of Brits

are engaging with a retail app while

shopping in-store, so to increase these

numbers brands should consider

investing in a valuable mobile app that is

able to send targeted and personalised

messages or offers when the consumer

is walking around the store.

And with the continued

development of new technology,

this is becoming more of a reality for

retail companies who want to really

connect with their customers and

enhance the in-store experience.

15


What’s more, the rise of mobile

payments and developments

such as Apple Pay mean mobile

is fast becoming a more integral

part of the retail experience with

consumers keen to explore these

new methods of payment.

The challenge for retailers will

be to ensure mobile payments

are simple and easy-to-use for

customers with an education piece

needed to alleviate any security

fears consumers may have.

It’s clear that mobile apps offer the

perfect solution to unite online and

in-store efforts and can help to elevate

the in-store customer experience

beyond what can simply be offered

through each channel independently.

However, in order to be effective, all

channels need to offer a seamless and

harmonised experience. Customers

want the same retail experience across

both online and in-store channels and

will be disappointed if they don’t

receive a similar level of service.

Therefore, to get ahead of competition,

retailers need to develop a strong

omnichannel strategy to ensure the instore

customer experience matches up

with that received through the website

or mobile device.

Customers appreciate personalisation

and will continue to use an app if it’s

targeted towards their preferences

and doesn’t annoy them with too

many messages or irrelevant content.

So the more a retailer can convince

a customer to engage with an app,

the more data they can get to market

towards their unique needs. What’s

more, if a retailer offers a mobile

loyalty scheme, shoppers are more

likely to engage and stay loyal to the

brand as they appreciate the benefits

it brings.

Customers

are likely to

disengage with a

brand that does

not consider

what they want.

16


So in conclusion retailers

should begin to invest

more into their mobile

apps if they want to stay

ahead of the game. If

developed effectively

retail apps can reap a

whole host of benefits

for both the consumer

and for the business.

They can play a key

role in customer loyalty

and acquisition and can

help to drive up sales

and revenue. Those

that don’t invest in their

mobile app strategy may

lose out more than they

may think.

By Nick Black, co-founder and CEO of Apadmi.

For more information, contact me on 0161 850 1300

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