When you’re budgeting your marketing dollars, you can feel overwhelmed by options. One of the trendy possibilities is a mobile app. There are currently more than 90,000,000 smartphones in the U.S., and the phrase, “There’s an app for that” has entered into the national vocabulary. It’s easy to decide that a custom smartphone application would be a good investment for your CPG company.
Kraft Foods, for example, has created an app that allows consumers to make commercials with their “Grandpa Frank” character and their smartphones’ video capability. Charmin has an app that helps you find clean restrooms — and leave reviews of public restrooms all over the country to help other app users in the future. Nike’s running app is a glorified pedometer, tracking distance, pace, and calories burned.
Apps that are fun or useful can become very popular, and can provide a significant level of visibility for a company. Most CPG companies, however, according to a survey by Consumer Goods Technology (CGT), use their apps to promote their products. Sending coupons or promotions to consumers who download the app is the most common use of apps fro brands. Apps that keep track of loyalty programs are the next most popular.
Costs for an app can start at a few thousand dollars and go up from there, with $30,000 to $150,000 being a typical range, according to a study by the BBC.
Is it worth it? Maybe not.
There are plenty of practical issues with smartphone app development. Will you create an app for iPhones, Android, or Windows phones? Not only will adding another platform increase the cost of the app, but you may have to go to a different development company for each.
About 50% of American consumers use smartphones, and users are divided among the platforms. Choosing just to have an iPhone app restricts your audience just to iPhone users — and just to iPhone users who download consumer apps. More than 80% of custom apps are downloaded fewer than 1,000 times — a hefty cost per potential customer at the going price to develop an app.
You’ll also find that you have to keep your app fresh and interesting, supporting it with new content and encouraging users. You have to offer support to users of your app. Add that upkeep to the cost of the app when you do your planning, or your app will probably fail.
Once you’ve factored in the cost and the upkeep, you’re still faced with a central problem: shoppers don’t like mobile apps as much as you’d think. Research from Siteworx indicates that most consumers are reluctant to download apps. In fact, 52% of those surveyed said that nothing would persuade them to download an app. About 18% would download an app in exchange for a special offer — so add that cost, too.
The study found that people who shop via smartphone overwhelmingly prefer a mobile website to a shopping app — 65.7% would rather go to a website than use an app for consumer goods. Among 18-24 year olds, many of whom keep their phone with them at all times including when they sleep, 75% would rather use a mobile website than an app.
If you already have a good mobile website, you can use it to promote an app as well as your products, and you might be able to benefit from a custom app. If you’re hoping that an app will take the place of a mobile website, you’re looking at a risky investment. A good responsive website that shows off your products to shoppers using their phones and their desktop computers is a higher priority investment.