Does every business need a Mobile App?

As we all know, the news is full of terms like ‘mobile-first’, ’mobile-only’, ’app-only’ and so on. Most websites one lands on are either recommending you download their app, or in some cases pushing the app. If players like Myntra and Flipkart are going app-only, if PayTM wants to do mobile-only Commerce, and if everyone else from Amazon to Ola to Uber are offering you app-only offers and discounts apart from a big incentive to download the app. Every other advertisement on the television, from Freecharge to Foodpanda, just talks of the app. It clearly looks like big-business. But is the app the only way to go?

If we can shut out the marketing noise, there’s another way to look at this - which is probably the best way to look at it. That is to put ourselves in the shoes of the consumer. Here are a few questions we should ask ourselves before jumping into the mosh pit.

• Are most of your buyers new or old to the category and your site, its promise and experience? If you’re expecting new users to download an app just to try your experience, you are expecting a lot. Once the user finds consistent repeat value in your offering, then and only then would an app be considered. I’m not talking of the case when you are paying the user a huge amount in coupons or free-rides to install an app - that’s a different discussion for later.

• Trivial point, but do most of your present and potential users have access to enough data bandwidth to download and upgrade the app as required?

• Are most of your present and future consumers use the smartphone to purchase your product or service?(note I’m not saying have a smartphone because, broadly speaking, everyone will) If the user is looking to compare tech-specs of four speaker-systems, or insurance products, is he likely to do that on the mobile screen? If your service is a research-led choice, is the mobile screen even big enough for that decision to be made? Do remember mobile customers are fickle and disturbed by calls, SMSes and chats, are frequently on the move, have varying bandwidth, and so on. So do some data analysis on existing users, and some research on potential ones.

• Does your category have the repeat-rate that demands an app? If you are a taxi provider, yes. If you’re an insurance provider, no. If you’re into real-estate, then prepare to be spend a lot to convince people the app is a better choice than web, and prepare to be uninstalled the moment the decision is made. Please don’t expect the consumer to install and maintain and not delete an app that is used once a year, or once in a lifetime - like a wedding-planner-app.

• Is your category search dependent? If all journeys start with a Google search, it may be more important to have updated web-pages for Google to index.

• Sad-but true - real-estate or screen space on the phone is quite limited. It does not allow for too many apps - apps of lesser relevance will be deleted. So do ask yourself if your app could be in the top-10 engaging and relevant apps for your target-group across all the other apps he may have installed. If you’re an mCommerce player and you feel you have the most engaging app, it may not still be enough. Do ask if you can compete with Whatsapp and Facebook for real-estate.  

• Do ask if you’re going app-only because it’s cool. If you think push-notifications will change your life, or geolocation will, or just that the consumer can refresh the page by shaking his phone - do ask consumers first how much they value these features. Do remember the Segway was cool, so was the Concorde. Both can’t be called successful by any shot. Of-course, your slick site navigation is best experienced on a native app, but does the customer make his purchase decision based on site navigation? Or is it something else, like better supply or prices? Wouldn’t you rather invest in the key drivers of his decision?

• Finally, do check with industry experts if your reasoning is on the app business is correct. The app is not simply permanent freedom from having to pay Google. It takes money to build and maintain, more money to market your way to install, app-store-rankings, feedbacks and so on. Discoverability of new unmarketed apps is limited to truly unique and extremely useful apps. If you pay for an install, to complete the loop in the first point, you could just be offering a free-ride before an uninstall happens.

Do remember the PC-web could be boring, but it’ll stay as long as laptops are selling, as long as offices are operating, as long as smartphones have small screens and tedious ways of typing long text, including 16-digit credit card numbers. If you think you can circumvent Google by an app, do remember it’s the Android app-store rankings that’ll make the app sell. You’ll still need to spend on installs and usage, so it’s just replacing a problem with another. Nothing in life, including an app-install, is permanent. The battle is never over.

So what should you do in the meantime? The best thing to do could be to gather usage and preference data from your present and potential consumers. If the mobile looks like a promising area of investment, check if a mobile site, or a responsive site serves the purpose. Then if the answers to the questions above convincingly point towards an app, the subsequent step would be to seed an app, but not go off web or mobile web.

To sum it up, do remember good Strategy is sometimes about saying no to obvious choices when they don’t make sense for you. It is also about not following the crowd and sometimes about choosing the non-fancy traditional option. If you choose to build an app, it has to fit your users and your category. If you choose not to concentrate on the web or the mobile web, then it’s more dangerous. If you choose to forego avenues of growth where most of your users are today, you’d do that at your own peril, and to the benefit of all your competitors.

Ps: The internet has long-arrived, and the TV still isn't dead. Neither is print, by-the-way.

Initially published in ET Retail on April 29, 2015
Related post: Is it Wise to go Mobile-Only?, March 8, 2015

The pitfalls of free-shipping

Every eCommerce blog in the world will sing paeans in favour of free-shipping. It does make decision-making easier for consumers on one hand, and on the other, it does have a cost. There is no such thing as ‘free’ shipping, first-of-all. It is being paid by the consumer in many cases as the cost gets bundled into the product price, or it is being absorbed as a marketing cost by the seller or the platform.

That said, let’s take a look at how free shipping is being implemented today. A seller from, let’s say Gurgaon, is instructed by marketplaces to list articles on free-shipping, so they work out an average cost of reaching out to potential customers, wherever they might be, and add it to the product price they want - not knowing where the buyer might be. This seller could end up with a consumer who lives next door in Delhi but alas, thanks to free-shipping, the buyer has to pay the average all-India price. The seller could be, for all we know, using a worst-case-price - so the Delhi buyer is either paying the Kanyakumari shipping price, or worse and more likely, not converting.

Try this the next time you travel - do prices on your favourite eCommerce site look different whether you are checking them from Mumbai or Bangalore? Try feeding in your PIN-code, and all you’ll know is if COD is available to you - the price of the article won’t change for you. You know why? Of-course you do. It’s again thanks to the glory of free shipping. eCommerce platforms have so far steered clear of optimising the shipping cost for the seller-buyer PIN-code pair. Why bother optimising something that’s free, right?

Wrong. Like we said before, there’s no such thing as a free lunch - sorry, shipping.

This current business of flying pen-drives and sunglasses across the country is not sustainable. This was fine if Indian eCommerce were on the retail model and thus, free to ship from the nearest location, but today most Indian players, for regulatory purposes at least, are marketplaces. Most eCommerce sites are thus making the buyer select the seller along with the product on a buy-now button. What the buyer wants to select is price and shipping time. There is, therefore, a huge need-gap that needs a solve. In most cases, buyers are getting their products more expensive, and much later than possible.

How it should work is simple. The sellers should be asked to input the price they want for their article, and a logistics solutions provider (LSP) that the eCommerce platform works with should be asked, on-the-fly, to provide the price and delivery-time given the pick-up and delivery PIN-Codes. Sure, if you want things simple for the buyer, by-all-means show a single price that’s the sum of the product and shipping price. What happens as a result is:

• the price shown is more accurate, and fairer to the seller, shipper and buyer
• items closer to be buyer are automatically prioritised (wether sorted by price or time-to-deliver)
• shipping distances are automatically reduced
• prices for the same article are different in different cities, which is how it really is if one were to remove price distortions
• every loss that’s a function of transport time e.g. shrinkage or loss in transit, transit-damages etc. get reduced

End-result is that buyers get their products not just cheaper, but also faster and in a better condition.

We must remember that eCommerce adds value by providing a wider selection and more convenience. Shipping across unnecessary distances, adding costs, delays and damages are not consumer benefits but costs. When the current heavy-discounting regime falls, customers will see that the emperor is not wearing any clothes. That, will be an uncomfortable day, and a heavy price to pay - for free shipping.

Previously published here.