Mobile Commerce

Consumers Are Ready For A Post-App World — Are Retailers?

Mobile Apps Might Not Be the Future

If mobile is the commerce platform of the future, then apps have been anointed as its chosen champions. Whether they're dedicated marketplaces or just random utility apps, the push seems to be on from retailers to transition whatever mobile-based services their consumers are currently using to walled-off apps.

You don't have to look hard for the evidence. On Friday (June 3), Facebook announced that soon mobile web app users won't be able to use its Messenger service. Far from a vote of no confidence in Messenger — on the contrary, Messenger seems to factor into The Social Network's future plans extremely heavily — it's far more likely that this is just another way for brands to prepare consumers for a future of apps, more apps and only apps.

What a shame it is then to see the rumblings of a post-app world, and what a shock it will be for retailers to see that consumers could be the ones driving the change.

First things first: While consumers no doubt enjoy the experience of app-based commerce, why they enjoy it might not conform to retailers' preferences. According to a recent survey by Gartner that looked into consumer behaviors with both paid apps and free ones that contain in-app purchases, the average user spends about 24 percent more on in-app transactions. Stephanie Baghdassarian, research director at Gartner, elaborated on this consumer affinity for in-app purchases and what it could say about apps in general.

"Overall, the survey results showed that mobile app users are spending $7.40 on paid-for apps every three months and $9.20 on in-app transactions, resulting in a quarter more spending on in-app transactions," Baghdassarian said. "This confirms that, once users are confident that an app delivers the expected value without having to pay upfront, they then find it easier to spend on in-app transactions."

The operative phrase here is: once users are confident that an app delivers the expected value. It might seem pedestrian, but the fact that consumers aren't madly in love with apps but are instead remaining cautious about determining each one's relative worth before pulling out the credit card shouldn't go unsaid. Effectively, this foregrounds the convenience apps can deliver as the determining factor of consumers' preference for them.

That could be bad news for brands — Facebook and others included — who are slowly consolidating their services into the closed app ecosystems they can control. Sooner or later, some invisible line of delivered convenience will be crossed, and consumers — as they always do — will adjust their behaviors accordingly.

That critical point is surely still a few years off, but some companies are already working on solutions to the problem of post-app commerce. Google — a perennial member of the usual suspects — is throwing its weight behind a project it calls "Instant Apps," and though the name might not conjure up much excitement, its premise just might.

Announced at this year's I/O conference, Android Instant Apps could soon allow users to run discreet sections of mobile apps without visiting app stores or installing any new programs. This doesn't require new apps to be developed, but rather subsections of native apps are preloaded as necessary on users' devices. What's more is that, since nothing needs to be installed, the entry point for these apps needs not be users' own phones. With links and buttons in the right places, a click on the mobile web can jump right into the app-based checkout or research formats that consumers know and love.

Sure, something like Instant Apps might not give retailers the exhaustive control that current closed apps can, but it has a better chance of dovetailing with evolving consumer expectations than its staid predecessors. After all, if more consumers are moving toward a place where they prefer to evaluate apps before pulling the trigger, it'll be eminently important to provide the conditions in which in-app purchases aren't the only leg merchants have to stand on.

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NEW PYMNTS STUDY: LEVERAGING THE DIGITAL BANKING SHIFT – SEPTEMBER 2020  

The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.

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