Futurists are predicting a meeting of the digital and real world is not far way. I’d almost say this ‘union’ is already happening. Smartphone (iPhone / Android) adoption in Australia is cited to be outperforming the US by 5 – 10%. Amongst other things, this means retailers also need to unite with the digital world.
Unfortunately, so far many Australian retailers are lagging in terms of digital marketing (in particular mobile and online).
I’ve just come across stats that make it clear that retailers needs a well thought out digital ‘vision’:

• 35% of Australians own a smartphone and 38% have already downloaded a shopping app

So it’s not hard to then make the leap that mobile, particularly smartphones and apps, is already influencing sales and ongoing loyalty.
But shopper apps need to be well thought out and deliver on certain features to be useful.
Other stats from the US and Europe make it clear that shopper apps, to be useful, need to deliver on certain features:

• 84% of US shoppers use their phones while they shop
• 70% are comparing prices
• 67% are accessing product reviews
• 61% are looking for specific store information – hours, other locations

There’s nothing really surprising in these stats, but certainly worth keeping in mind when designing a shopper app. No point in having an app that no one uses!

Now that I’ve got my shopping apps sorted, the next part of the story will be to download Google Wallet (when it’s released), then really there’s no need for my handbag or wallet. My smartphone and car key is all that’s needed. Much easier then for me to carry shopping bags! Ok, time to go shopping…

It’s widely recognised that the success of Apple’s iPhone has a lot to do with iTunes and the mammoth number of apps in the App Store. With more than 100,000 apps available across many categories, it seems there’s an app to suit everyone, for every need.

However, despite apps being a legitimate and increasingly powerful distribution channel for content, services and brand experiences, iPhone users are seemingly reluctant to spend a lot of money to access paid apps.

So, can brands charge for their apps?

Apps are gradually being recognised as a new distribution channel for brands, particularly those that can deliver content, or provide access to their services via mobile Internet. Furthermore, many iPhone users are looking for more brands to engage with them via their mobile device, however, not at a cost.

iPhone users are looking for new interactions or ways of dealing with companies anywhere, at anytime, and branded apps provide companies with another opportunity to connect with their customers. But, most brands cannot charge for access to their own distribution channels, or for content that is not unique – why pay to access something that can be obtained elsewhere for free?

There will be, of course, exceptions, particularly when a branded app can be a primary distribution channel for unique content or intellectual property, and/or the experience has significant benefits and value to the consumer. Although, at this point in time, consumer brands are yet to fully explore how they can become part of their customers’ lives via owning app territory on their customers’ Smartphone.

Apple’s iTunes App Store has in excess of 100,000 apps across a multitude of categories. There’s apps for fun, for making your life easier, for saving time, for sleeping better, for unleashing your creativity. Basically, there’s an app for just about anything you can think of doing via your iPhone (and for many things you’ve never thought of doing).

The problem is, how do we find these apps when there’s so many of them in there? It’s like being in the biggest shop in the world, but all products fit into 20 simple categories. For new apps, whether free or paid, branded or unbranded, the real challenge is being found in the first place. In a digital shop where browsing is very linear, from one click to the next, it’s difficult for apps to rise to the surface so that they are found before ‘shoppers’ move on.

Latitude Insights conducted an online research community amongst iPhone users from March to April 2010, in which finding apps was an interesting topic of discussion. The main method used to find apps were the Top 25 lists, and word of mouth recommendations from other iPhone users.

App downloading can be either planned or spontaneous. Sometimes people will specifically look for an app they know the name of, or a type of app (but do not know its name) by using a key word, or category search. Other times, browsing the app store may be like window shopping – purposeless, but sometimes resulting in a new acquisition.

iPhone users recognise the inherent problem in relying on the Top 25 list to find new apps. Following the ‘crowd’ when it comes to apps means that the most downloaded apps, continue to be the most downloaded. There’s a certain level of ‘cred’ associated with having a more unique or rare app.

“I would imagine that there are a lot of great apps that never make it into the Top 25. Especially, considering that most of the apps in the most popular list are so amazingly stupid”

Branded or commercial apps need to utilise other communication channels to promote their apps, to facilitate uptake/downloading. Ironically, it may be that non-mobile media, particularly websites and print in the form of both advertising and reviews, are the best way to tell the target market you have an app for them. And then a good app can begin to rely on recommendation to build its fan base.

Ultimately, a good recommendation or a positive experience with an app on someone else’s iPhone is the strongest driver of app selection. That’s why ‘what apps have you got?’ could be the universal catch-cry for iPhone users.

Our presentation of insights from our iPhone online research community.
Stay tuned for a few more insights over the coming days.

Latitude Insight’s case study of iPhone users uncovered just what consumers find so fascinating about the iPhone, why they use that four-letter word – LOVE, and how brands can become part of this ‘affair’.

The study revealed that Smartphones change user’s lives. Initially thinking they are getting a new phone, with email and web capabilities, they find iPhone gives them so much more.

It helps them communicate. It makes them more connected because of its web capabilities. But going even further, the real benefits are about being more entertained, more efficient in what they do, having more freedom because they are not stuck to a computer, and having more ability do things away from home and work. It’s a whole new world where users can do things anywhere, anytime.

Smartphone users also admit to relying less on their computer now they have a mobile device. With predictions that by 2011, 85% of handsets will have some sort of browser, it’s important brands recognise the opportunity mobile devices gives them in terms of another distribution channel to engage with their customers.

Furthermore, with over 100,000 apps available, many free, it’s important apps have lasting traction. They need to ‘do’ something and have a tangible impact on time or convenience to be worthwhile and valued by users.

While debate rages whether the iPad is set to save or redefine publishing, consumers are quietly contemplating whether there is room in their lives for another digital device. We know it looks pretty, and had Apple-cool credentials, but do we really need one?

Even amongst Apple fans there is some question about the purpose of owning an iPad. To this end the answer is often, ‘what’s the point?’. We’ve already got desktops, laptops, gaming units, smartphones, and maybe even ebook readers. Or maybe we’re missing the  actual point, that its not the iPhone users who will rush to embrace the iPad, but others who don’t see it as an overgrown version of their smartphone.

Our study of iPhone users, via an Online Insights Community, revealed that for most, the iPad wasn’t high up on their wish list. It was considered too large to be truly portable, and the lack of connectivity to other hardware meant that it wasn’t a legitimate substitute for a laptop or netbook. Beyond the obvious compatibility concerns is the issue that it is difficult to imagine a use for the iPad. Especially when many people felt that it would predominantly be used in-home. There is speculation that ‘maybe it will be good for…’ but not a lot of ‘I need it for…’.

“It doesn’t fulfill any need I have, so it’s not even a consideration for me”

It will be interesting to observe too, how quickly iPad users take up paid apps, especially those related to publishing and media. iPhone users are quick to identify that there’s a mounting cost once you factor in the hardware, data download and the price of apps. Justifying the additional spend on iPad apps, will require a change of attitude and behaviour in the consumption of content. It’s early days and iPad is the latest toy, but many people are waiting to see both how a second-gen iPad will differ, and how the publishing world will respond with apps.

And despite all the debate about whether there is a need for such a device, 1 million iPads were sold in just 28 days (compared to the 74 days it took to sell this many iPhones).  So while we may not see a need for it – it seems the iPad may find a place in our lives.

And me – well I’m like the million others who want another toy, whether I need it or not!

How many take away coffees do you buy a day? Even if it’s only one, that’s probably $3.50 out of your pocket that you spend without a second thought.

So what about spending  $2.99 on an iPhone app – maybe a game to use in your spare time, or a utility designed to save you time. Or how does $1.19 sound, because that seems to be a common price point? Why you could even get three apps for little more than a latte.

You wouldn’t think that it would be an agonising decision, but we were surprised to find that price is a sensitive issue when it comes to buying apps. And iPhone users themselves don’t understand why they waiver over spending less than $3 on something lasts so much longer than a hot drink. Here’s a taste of some of the comments from our iPhone Online Research Community:

“I am dancing around the idea of a $6 app at the moment that I really want (but not rushing in). Weird psychology really since I have no problem throwing far more than that away on far more frivolous things”

“I only pay for stuff with a lot of good reviews and things I know I’ll like. Otherwise it’s free. Even if it’s an app I’m not sure about and it only costs $1.19 I’ll think twice, three times.. sometimes four times”

“I don’t feel like I should be paying any more than I already am/have for the iPhone considering I use it mostly for communication purposes. I don’t think I will ever pay for an app, but I’m waiting for something to prove me wrong!”

Our frugal friends were a bit bemused at their own behaviour, and put it down to both the intangible nature of apps, and the predomiance of free apps which create a mindset that all apps should be free or so cheap that purchasing doesn’t require a second thought.

There are people who are willing to spend ‘big’ money on apps, whether it’s a $9.99 Jamie Oliver recipe collection or a $69 navigation system. But the apps they pay more money for have to do something - they’re rarely games or time wasters. Even so, our ’spenders’ were more likely to trial a ‘lite’ version before downloading the full paid-for version. Try before you buy matters even more in appland, where the refund policy is non-existent.

There’s no doubting that apps are what makes the iPhone eminently attractive and indispensible, but iPhone users are cautious with their money, and while so many apps are free, many users are happy to dabble in app-lite. This may have interesting consequences for iPad, both in terms of users’ propensity to purchase 3rd party content and apps, and the pricing strategies employed by content providers and app developers. And once big brands with big development budgets cotton on to creating new (free) brand experiences via apps, maybe we’ll become even more reluctant to open our wallets.

The last couple of days, all we have heard is iPad, iPad, iPad.  While I’m not sure iPad will be as revolutionary as the iPod or iPhone, what I do know is that Apple will make a lot of revenue from their iTunes store.  Did you know that in 2009, Apple accounted for 99.4% of all mobile app sales?

According to the Gartner report that’s a big chunk of the $4.2 billion in mobile app revenue that Apple scored in 2009 alone.  Apps are growing by the minute with the market estimated to almost double in the next year, to 4.5 billion apps.

For marketers this creates a number of interesting questions and opportunities:
- What makes a good App?
- What are consumers willing to pay for?
- How does the market learn about Apps?
- How do I make sure I get my Apps noticed ?

Over the coming months Latitude hopes to answer some of these questions with their iPhone user research community.  Not only will we ask members to ’show us your Apps’ we want to drill down to understand how they find, choose and interact with their Apps.  Which ones can’t they live without and most importantly, which ones add to their brand experience.

So what Apps can’t you live without?