Home > Uncategorized > Why aren’t retailer apps cutting it with Millennials?

Why aren’t retailer apps cutting it with Millennials?

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AUGUST 14, 2015
Despite near complete saturation when it comes to smartphone use, Millennials have been slow to adopt shopping apps. New studies on Millennial shopping habits and app adoption suggest the solution may lie in crafting programs suited to the generation’s unique shopping habits.

A study by Forrester Consulting, commissioned by RetailMeNot, found that while 84 percent of consumers use their smartphones while in stores, they are not making use of retailer apps.

“Of the U.S. consumers surveyed who have used a mobile phone in the last three months to perform a retail-related activity, 60 percent have two or fewer retailer apps on their phones, and 21 percent do not have any.” Over half of those who responded said they use retailer apps once a month or less, and more often than not they use smartphone web browsers to redeem coupons in-store rather than an app.

The tendency of Millennials to redeem coupons through smartphone browsers instead of through apps is in keeping with the picture painted by a report titled “Food Shopping in America” by MSLGROUP and The Hartman Group which calls spontaneity a prime driver for Millennials, along with uniqueness and budget constraints.

Mobile web vs app chart
Base: Variable consumers who have used their mobile phone in the past three months to perform each ret ail-related activity
Source: A commissioned study conducted by Forrester Consulting on behalf of RetailMeNot, July 2015

The report further goes on to say that personal recommendations from friends and a unique mix of choices in the basket tend to be big drivers of Millennial purchasing.

So a no-frills app that asks very little from a user and offers deals that play off of a desire for a spontaneous, surprising and money-saving experience could be an app that a Millennial would be more likely to install.

On the other hand, despite the industry’s desire to push app adoption, Millennials’ affinity for using smartphone browsers may indicate that dedicating resources to a good old-fashioned mobile web presence — and innovating along those lines — is the way the grab the Millennial customer’s mercurial attention.

DISCUSSION QUESTIONS:

What will it take to get otherwise uninterested Millennials to install and use retailer apps? Are retailers better served trying focusing on promotions that can be accessed through a browser rather than an app?

 Comments:

How many apps does someone need on their phone? Are we supposed to have an app for every retailer? That’s highly unlikely. If I’m going to have a retailer’s app on my phone it should combine their loyalty program with valuable coupons and promotions and allow secure, one-touch payment. How many retail apps do I have? None.

One other thought: It’s interesting that retailers keep focusing on Millennials when they have far less disposable income than Boomers.

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Max Goldberg, President, Max Goldberg & Associates

 Apps are but one communication channel, but a very important one. If you want an app to be embraced by the Millennials, then make it about them; what they want, what they need and what is important to them. Blatant promotion doesn’t work. The incentive to get Millennials (or any generation of customers for that matter) is to not be generic and make it personal. There are a lot of stores and a lot of apps. It’s not as simple as “If you build it they will come.” Give them a reason why your app is one they should have, and they will use it.
 As a non-Millennial I have to say I’ve found retailer apps quite unsatisfying. Most appear designed either to reflect what a retailer wishes the customer would do with their app or what some mid-lifer thinks a Millennial wants.

Far too often this leads me to a point where I’m quickly missing functions that their website provides but which are left out of the app. And so I use websites — because I know I’ll end up there anyway.

There is need for taking apps seriously and using traditional development process (consumer research, formal design, etc.). Too often they seem to have been created to check off “we have an app” rather than to offer serious value.

Doug Garnett, Founder & CEO, Atomic Direct

It’s all a question of value — especially when it comes to time and choice.

In all the research I’ve seen people download a lot of apps but only use about five! Millennials may use up to seven frequently. So in order for a retailer to break in to the inner circle of apps used 80 percent of the time, that app has to hold a lot of “value” in what it offers the user in terms of time saved, discounts, etc.

Millennials like empowerment and choice. Mobile search enables far more choice and selection than any retailer-specific app.

The retailers’ take away from all this research would seem to be optimize websites for mobile before spending any money on an app. And if there are any additional resources, spend them on first class SEO so that every consumer can easily find your brand, products and services.

It’s far more important and profitable to be on the top of the mobile search page one list than to be one of the top five apps on Millennials’ phones.

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Chris Petersen, PhD, President, Integrated Marketing Solutions

 This may sound like heresy in this forum but perhaps it’s something to think about. My kids are Millennials and are very devoted and discerning shoppers, far more than my wife and I could ever be. As my daughter says, “retailer apps” are self-serving crap. They have already defined their shopping patterns according to the best price/value proposition offered and an app usually showing an “inflated/reduced price” is of little interest.

I believe retailers are up against shoppers that are far smarter than previous generations and no amount of technology will replace quality price and service. Any intelligent retailer realizes that price attracts people that move quickly from one offering of cheap to another and apps just help to speed this up.

jack crawford, owner, crawfords country gardens

 I think the question should be “what do Millennials want/need from retailers” instead of thinking about altering their already imbedded behaviors. It doesn’t make sense even as a Boomer to have to download and keep checking multiple retail apps to take advantage of promotions across the retail landscape. That’s just too time intensive and consumers are seeking time savings. This problem needs to be turned inside-out and re-framed.
 Perhaps retailer apps are just not the answer and key to shoppers’ wallets that so many retailers seem to hope and desperately want them to be. Perhaps Millennials and older shoppers really do prefer browser-based promotions and coupons. Why not embrace and exploit what customers like and want and use, rather than keep mercilessly trying to “get otherwise uninterested Millennials to install and use retailer apps”?

IMHO very few individual apps are going to appeal to consumers and I don’t just mean Millennials. None of us want to cover our phones with all those apps. Just give us a browser and easy access to the web sites we want.

Don’t get me wrong—apps like Starbucks and a few others have been and will continue to be great successes, but look at what they do. Starbucks actually enhances your shopping experience by allowing you to order and pay thru the app. Otherwise it is an unnecessary step to shopping. And who likes that?

For my 2 cents.

Lee Kent, It’s about sharing and succeeding in Retail, YourRetailAuthority

 I don’t disagree with the results. Over 40% of Millennials agree with the statement, “The majority of companies do not know how to market to my generation.” My research into Millennials food shopping behavior ranks “friends & family” and the “Internet” as having the greatest impact on food retailing purchases.

This generation is very focused on social media as its primary communications, advice, and complaining vehicle. Like most consumers, they gravitate toward apps that are easy, quick and relevant to their lifestyles.

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Richard J. George, Ph.D., Professor of Food Marketing, Haub School of Business, Saint Joseph’s University

 Anyone following me may have noticed my nearly total discounting of mobile devices in shopping. That is not because I don’t believe that a mobile device can increase sales. Years ago I looked at the data from a precursor to Catalina Mobile and noticed LARGE increases in sales—to the TINY share of shoppers who used the device. In fact, this confirmed the powerful effect of “interstitial sales.” See:”Googling” the Store.

However, it remains that a smart phone device is a lousy interface to a shopper during their shopping trip. Hence the single-digit adoption rate with even the most successful efforts. Stop the insanity! It is the interface with real live human beings that is so pathetically understood by app developers—but not by Google and Apple.

Google has made a valiant effort with Google Glass, that yet may pay off in the consumer field, but for now is focusing on the human interface in business applications—VERY appropriate. The EYE IS THE DOMINANT HUMAN INTERFACE. However, not everyone is going to wear glasses. (I wear them a LOT—but only for reading, rarely in a store.)

That’s where APPLE WATCH comes into play. I won’t even begin to explain the massive investment Apple has made, and is making, in understanding the HUMAN INTERFACE. If you want to know, read it here:iPhone Killer: The Secret History of the Apple Watch. The watch of course uses the eye as a final resort, but otherwise, touch (distinctive vibrations,) and sound—including Siri for input.

In my opinion, nothing serious is going to happen in the app area, until either Google or Apple knock the ball out of the park. So if you’ve got all that cash to spend, go ahead and send it down the rat hole. But at least be aware of what the REAL problem is, and it is the need for an interface on steroids—not even possible with the existing smart phones—without those having an interface to Google Glass or Apple Watch.

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Herb Sorensen, Ph.D., Scientific Advisor TNS Global Retail & Shopper, Shopper Scientist LLC

 Ever hear of a “company” called Depop? Check it out. It’s a combo of Instagram and eBay, only with better reviews. I know several Millennials (aka young people) that shop that way. In other words, open market, group sourced product at super reasonable prices, all on your mobile, of course.

How can retailers compete with that? By being something completely different. Sure, a retailer should have a good app, they should have an excellent e-commerce site, but they should also realize what got them to the dance in the first place: their brand and their stores. The issue though is; why should millennials care about their brands or come to their stores or their apps? And retailers who don’t become more relevant in those two areas, that answer is, “there is no reason.” Lots of work to do!

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Lee Peterson, EVP Brand, Strategy & Design, WD Partners

 As a group, most first gen retail apps were self-serving and did not provide consistent value to the customer. The branding of retailer apps as less than useful is a problem that is going to be a challenge to retailers who have created beneficial apps. Besides, with mobile web access so easy, the browser route is probably the route to take for future development.
 Question of value. Only so many apps I want to install on my device and also show up on pages. I am not sure launching an app inside the store really gives me any benefits to the shopping experience unless there are tools that I can’t get anywhere else. The other problem is that I find the login procedure to be very cumbersome in mobile retail apps and by the time I get logged in, it sucks up shopping time. If I am not saving time while I am in the store, why would I download and install a retail app? I do use amazon.com app, that’s different because it is a shopping experience in an app.

Think about real-world usage. The three main drivers of these activities are search (goes to web), email (vast majority goes to web instead of deep linking to the app), and apps like Google Maps (goes to web).

Retailer mobile apps generally are used by customers who are already active and engaged with the brand. They’re the ones who open the app as their first action vs. going to Safari or Google Maps.

While apps need to have these capabilities as price of entry, the real users of retailer apps are regular customers. So the best apps focus on their needs.

Think about it. Does anyone go to the Starbucks app to find the closest Starbucks? No, we use it to pay and to see how many stars we need for a free coffee. We use native map apps for nearby locations. So each retailer needs to focus on what their regular, engaged, loyal customers will use.

Michael Greenberg, CMO, associate.io

 The millennial generation pays with debit cards as a preferred means. This is a problem with most of the apps out there. As for the software, it is still clumsy, slow to navigate and checkout is almost always awful. Very few apps were developed for smartphone or tablet use only which makes it difficult to read important subject matter. As time goes by, retailers will come to realize that ease of use and navigation with debit payment capability is a must for the foreseeable future.

Compelling promotions are key, as opposed to just loading one more app on your phone. Aggregated apps for multi-merchant sites are the best way for retailers to capture their audience’s attention.

  1. There is no data to indicate any age group behaves in a homogeneous way, so discussing “millennial behaviors” is an error to begin with. Classifications of “millennial,” “baby boomer,” etc. harken to an earlier era when marketing was guesswork and we used a few mass media vehicles to reach wide swaths of the buying public. Those days are over, so analysis has to be more granular. As a marketer, I need to know how mothers, fashionistas, dads, empty nesters, college students, ethnic groups, urban shoppers, rural shoppers, etc. are using apps.
  2. So-called millennials have little buying power relative to older generations, so catering to their ever-changing tastes (if you can figure what they are this week) is not going to help retailers much this quarter or even this year (maybe not for another five years). However, nearly everyone has a smartphone and nearly everyone wants a deal when they go shopping. The obsession with millennials is faddish and misplaced.
  3. Most retailer apps are painful to use and I’ve tried a lot of them. Most retailers have essentially tried to replicate their Sunday circulars in an app. They haven’t tried to create utility for customers. Frankly, it is way faster to just look at their circulars posted in their stores than it is to scroll through retailer apps. It’s no surprise people don’t use them.
  4. As bad as retailer apps are, they are nascent. So, comparing them to mature website experiences doesn’t mean retailer apps will always be useless and retailers should stop trying. Until retailers start making useful apps, we won’t know. If you follow technology trends (mobile usage, device adoption, etc.) indications are that apps will be both necessary and important. But retailers have to think about them in very different ways than they do now. Business people who usually drive the requirements don’t have the skillsets to do this yet. They’re still thinking about top-down, mass marketing, when the future is largely about personalization driven by data. There are very, very few people qualified to create these types of customer experiences, so it will be awhile before retailers can make this happen.

Carri Bugbee, President, Big Deal Digital

 Millennials are so comfortable using small screens to explore new products that an app must provide some sort of incremental value to earn a place on the phone or tablet with this segment. In addition, many Millennials have filled their phones with pictures and videos, and do not have much room available for the incremental app.

Social is one way to succeed — share recos among friends and engage using Snapchat and Instagram-like capabilities.

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Mark Price, Managing Partner, LiftPoint Consulting, Inc.

 Downloading and managing so many apps on the phone is a painful task and unless the apps offer any unique utility, customers, not just Millennials, will be wary of downloading the apps. Someone downloading the app again does not mean they are loyal, they probably have downloaded other retailers’ apps too. Retailers need to focus on basics — who they want to target, what is their preferred means of communication and what should retailers’ value proposition be for that customer segment.

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Categories: Uncategorized
  1. am4ucmo
    August 19, 2015 at 1:24 pm

    I vote for the IBM answer

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