Online Retailers and the Mobile App Profit Dilemma

by Holly Shoemaker

A recent report from research2guidance reported that in 2012 most online stores made less than five percent of their revenue from a mobile app. 

Numbers at a Glance

The company surveyed more than 600 mobile-commerce companies and found the following:

• Almost 19 percent of e-commerce companies made more than 25 percent of revenue via mobile channels. 
• One third reported that they expected to generate more than a quarter of their revenue from mobile within the next five years. In addition, 15 percent of those companies reported that they planned to generate half their revenue from mobile apps.
• For online retailers to profit from mobile apps, they need to achieve downloaded numbers of more than two million. At this time, many online stores only achieve a few thousand downloads. 

Mobile Ad Spending to Grow

eMarketer predicts that U.S. mobile ad spending will reach $7.19 billion in 2013 and more than $20 billion in 2016. Despite those numbers, mobile only entails a small percentage of total ad spending. It comes in at just 2.4 percent. If the number increases as expected to $20 billion in 2016 that will bring the percentage to 11 percent – that means it will rank higher than radio, but will not overtake print.

Hope for Online Retailers?

The future for online retailers and revenue from mobile apps depends on the goods or services sold. Stores that sell virtual goods perform well. Companies that sell game apps and upgrades or virtual goods inside them also have a better chance at becoming part of the exclusive five percent.

Target Baby Boomers to Increase Medical Mobile App Sales

by Holly Shoemaker

For developers looking for a targeted market for medical mobile apps, baby boomers comprise a growing number of customers.

Mitchell PR, a firm that specializes in marketing apps to baby boomers, surveyed 600 baby boomers regarding app use. Those surveyed, reported the following:

• Sixty percent of respondents said they would download an app recommended by a physician. In general, physicians yield more influence over apps than other groups. Eighteen percent of respondents said they would download an app recommended by a family member, while five percent would download one recommend by a friend.

 Paying for Downloads

• Seventy-one percent of respondents had already paid for an app. In terms of actual dollar amounts, 36 percent of respondents said they would spend $1 to $2 for an app, while 35 percent said they would spend up to $10 for one.

When it came to the number of downloads, the firm reported the following results:

• Forty-nine percent of respondents said they had already downloaded six or more apps.
• Twenty-eight percent downloaded between one and five apps.

The survey also found that baby boomers were drawn to apps that have a larger size font and were easy to navigate.

Concluding Thoughts

The results seem promising for developers, given the longer development lifecycle and higher cost associated with health applications, especially those used as medical devices. As baby boomers typically have more doctor visits and more scheduled maintenance and medical procedures, developers should continue to survey their needs to better target one of the largest segments of the population.

Mobile App Releases Help Apps Remain in the Spotlight

by Holly Shoemaker

Companies many wonder what to do in the following months after they have launched an app. After companies track the number of downloads and the app’s consumer appeal, developers have concrete data to work with to see where an app could improve. After analyzing the data, developers have an opportunity to use app releases to remain competitive in the marketplace.

Focusing on release updates keeps an app in the forefront of customers’ minds – developers do not want to take for granted that the novelty of downloading something new may wear off. If users know updates were made, and the app has a loyal following, a good percentage of those users will likely download the updates. If those releases are successful, customers may use word-of-mouth advertising and other social media sites to let other fans know about the updated app. Companies should view this as additional advertising to their press releases, tweets or whatever marketing approaches they use to communicate the availability of new and improved apps.

Concluding Thoughts

Apps, just like other programs, always have room for improvements. Companies that do not integrate new releases into an overall marketing strategy will lose ground to competitors and newer apps. Making app releases an integral marketing element also shows that companies listen to their customers – that feedback, and the ability to make changes, drives the longevity of an app. At the end of the day, it comes down to app downloads and the ability to secure a top spot in download heaven.