How to Make Sense of the Changing Mobile App Economy
Mobile commerce is a rapidly evolving beast. Every year there are more devices, a greater proliferation of apps and companies investing in mobile experiences, and all sorts of new disruptive technologies changing the game, from Apple Pay to chat bots.
At the second annual TAP Conference in New York, a hall full of app developers, entrepreneurs, and a host of mobile-focused startups and brands took the stage to talk through the complex state of mobile commerce today. Whether you're looking to build commerce revenue, ad impressions, or simply drive installs and active users, businesses and app development teams need to keep everything in mind from intuitive user experience (UX) and contextual engagement to the eternal riddle of app discovery across app stores and mobile partner ecosystems.
Hosted by mobile monetization and deep linking company Button, the conference featured companies including Facebook, Uber, OpenTable, Pinterest, Foursquare, and others revealing the biggest challenges, opportunities, and innovations they're dealing with in the mobile space. As Button CEO Michael Jaconi explained during his keynote, he sees Button as an interaction layer between where users spend their time and where they spend their money. Mobile now represents 65 percent of all digital media time, according to comScore, yet most incremental ad dollars still funnel right back to Google and Facebook.
"Although the app world is not winning in terms of sessions and unique [visits], it's winning the battle for time and for dollars," said Jaconi. "Part of the reason we exist is that when you think about how solutions need to be built right now, mobile resources are likely the most overburdened resource pool in the digital era. Then when you think about discovery, [user] intent is becoming the most powerful factor. If you tap into intent, you unlock tremendous amounts of value."
Button announced extended publisher support for the mobile Web at the conference, allowing brand partners in the Button Marketplace to extend mobile ad and commerce experiences across native apps and mobile websites. The company also announced new verticals for specific use cases, rolling out Button for Local, Button for Travel, Button for Loyalty, and Button for Digital Media, and announcing new partnerships with apps like GasBuddy, Jet, and DoorDash, among others, as well as media companies including Condé Nast, and Refinery29.
We can't recap every mobile concept and trend, but below are some of the most applicable lessons and strategies for building great mobile experiences, keeping users engaged, and driving commerce and ad revenue.
Creating App Value With Design ThinkingBusinesses are always looking for the way to get that edge on mobile; the strategy that helps them identify their next great app, feature, or product. Tamara Mendelsohn, VP and GM of Consumer for Eventbrite, talked about how the popular events app uses design thinking to build products that solve a pain point for consumers.
In design thinking, there's no replacement for simply observing your users, and then rapidly prototyping and iterating to figure out a way to design something useful for them. As Mendelsohn explained, Eventbrite identified that many of its users, particularly the "ringleaders" of a friend group, were dealing with serious cases of FOMO (fear of missing out) or fear of missing out on something better. Users would express interest in a number of events, and then wait until the last minute to choose which looks the best and marshal their friend group to go.
"Customer empathy has to be the foundation for everything you build," said Mendelsohn. "We would see ringleaders collect different event options, and as the date approaches look at all their options and pick the best thing. The worst feeling is realizing you knew about something, but then forgot about the event and missed it. As a result, we created a new app in beta right now called Eventbrite Rally."
Eventbrite Rally applies that design thinking to the "ringleader" user, giving them a simple app to keep track of all the events they may or may not go to, then "rally" their friends with a built-in chat feature. Eventbrite identified a prevalent user behavior, and then built an app to enable and optimize it. That's direct value for users.
Brand Discovery and Keeping Your App "Sticky"In a panel entitled "Brand Discovery In the Age of Apps," representatives from blockbuster Walmart acquisition Jet.com, boutique shopping startup Shoptiques, and others discussed how they get eyes on their app, and the dos and don'ts of keeping users engaged after the initial download. It's all about making the user experience "sticky."
"Marketing as a whole drives app downloads," said Sumaiya Balbale, VP of Marketing at Jet. "When we're running TV ads we see a massive uptick, same with search campaigns, display campaigns, etc. Especially with younger shoppers, the first thing they'll do after seeing an ad is go find the app."
After discovery and download, Balbale said the key to that "stickiness" is providing a real utility. For Jet, that means adding things like lists into the experience. When people are shopping, a natural behavior is to keep a running list in their heads. Jet wants to bring that inside the app. The company is also adding features like a new capability in iOS 10 to allow two users to build a shared cart together by sending iMessages back and forth.
"It's a very precious space, your phone. In order to earn placement on it, you need to provide serious utility to the user and add value every time they interact," said Balbale. "It's about how we think past just being a place to shop and assist in ways that make us a meaningful utility. It's about stepping outside the narrow ecosystem of shopping and thinking of that app in the functional role it will play in broader life."
Shoptiques CEO Olga Vidisheva added that apps are an extension of your brand. The better the native app experience, and the more features you give the user to entice them to keep coming back, the better retention will be. Shoptiques has launched features including a Tinder-type swiping game surfacing different boutique products from around the world and letting users swipe left or right.
"On the first day we launched it, one woman swiped 700 times. On the back-end we then learned everything about her—the styles and colors she likes—to personalize her experience as a 'super user' with all the data we're gathering," said Vidisheva. "If you're coming back, you want to see something new. We also just launched a Wedding category, sending emails of what women should wear to different types of weddings. We're always releasing new features."
Hyperlocal Engagement With Location and BotsIn the "Thinking Local with Mobile" panel, representatives from Foursquare, OpenTable, GasBuddy, wedding planner app Loverly, and others talked about the different ways they're using location-based marketing. The panel discussed how contextualized user experiences and the right combination of emails, chat bots, and push engagement can get people into stores and restaurants, and making more and larger mobile purchases.
Steven Rosenblatt, President of Foursquare, called location the "atomic unit of mobile," giving you proximity, context, and a tremendous amount of data. For OpenTable, location informs the entire experience.
"For us, restaurants are a hyperlocal business where so much depends on the neighborhood you're in," said Denis Scott, VP of Restaurant Marketing at OpenTable. "That translates to how your product experience needs to be. In dining, we're a mobile business especially on the weekends. Put yourselves in a normal situation. You're out with friends, or with a spouse, and making a reservation on the fly, on your phone. More than 50 percent of our reservations now come from mobile."
Walt Doyle, CEO of GasBuddy talked about making the most of location-specific engagement. For a location-based experience like GasBuddy, where you know the consumer will be filling up at a particular gas station with their app open, there's a pivotal window.
"You have captive attention, which is on average about five minutes. Every retailer wants to get that consumer into the store," said Doyle. "How do you make that critical user experience engaging and personable?"
The answer for many of the apps is becoming a chat bot component. Foursquare released a chat bot called Marsbot this summer, which uses location data to recommend restaurants and nightlife through a conversational interface. For Loverly, chat bots have become a way to onboard new users planning a wedding, and to maintain a personal, concierge-like experience even when a human representative isn't available.
"The vast majority of our users are downloading the app between 9pm and 2am. Why? They're planning a wedding, they're stressed, and they can't sleep," said Kellee Khalil, CEO of Loverly. "We're introducing a bot to onboard people and get the process started. 'Are you currently planning a wedding?' 'Do you have a date?' The chat bot is this feedback loop and data gathering mechanism to keep the user engaged until a concierge gets back to them the next day to start really planning their dream wedding."
Where Is Mobile Commerce Going? Follow the MoneyIf you want to identify how an industry is changing, ask the venture capital firms investing in it. The "Investing In the Future of Mobile" panel at TAP featured VC panelists from Priceline Group, DFJ, BoxGroup, and Guggenheim Partners talking about the current state of the mobile app economy and where it's going, and they identified a few trends that all businesses relying on mobile commerce should keep in mind. The first: mobile is simply a given.
"We see mobile as horizontal. It's no longer a vertical," said Nimi Katragadda, Principal at BoxedGroup. "It's a part of every company we see. There's no such thing as being mobile-first or mobile-only anymore."
Katragadda said that the mobile app economy is maturing and consolidating to a point where the top seven mobile apps by unique visitor are own by Facebook or Google. That's daunting for new mobile startups, she said, and puts mobile acquisition and discovery at the beginning of every conversation. The Priceline Group, which owns OpenTable and a number of major booking apps including Booking.com and Kayak, sees mobile experiences beginning to emulate the way the app ecosystem works in China.
"We've done a lot of investing in China, and there, everything runs through WeChat" said Susanne Greenfield, Director of Corporate Development at Priceline Group. "Users do their shopping in WeChat, they pay bills, book appointments; the WeChat platform has almost become this iOS or Android-like platform that are being built on.
"Now look at what Facebook is doing with WhatsApp and chat bots and AI," she added. "They're trying to become a WeChat-type product. Instead of developing apps for Android or iOS, you're doing it for Facebook. It's still an app, just for a different platform."
The app landscape is consolidating and it's more difficult than ever to break through, but the VCs don't think the mobile app economy is dead or dying. Mobile as the primary platform through which users interact is simply entering a new phase, one in which the panelists think we've barely scratched the surface of the treasure trove of data underneath.
"Billions of people will come online in the next few years with mobile as their only device, and mobile devices are also the biggest data collector we've ever had," said Heidi Roizen, Operating Partner at DFJ. "We're still in this early primordial soup phase of using machine learning and AI and all these other technologies to make sense of all this data and put it together to make amazing things. We just don't know what those things are yet."
This article originally appeared on PCMag.com.