App Only – Go, No Go?

This is a debate I have had the chance to be actively involved in much of this year (2015). It also has been hotly discussed everytime key decision were taken by segment leaders like Myntra and Flipkart. They both were going for an App only approach but then recently seemed to have reconsidered this by introducing their mweb portals. Interestingly, I am now faced with this very decision with my start up in the hyperlocal commerce space. In spite of having been in the mobile domain for over 10 years, the choice was not a simple one. In order to take that decision, it was important for us to look at several aspects and while doing so I thought that this would perhaps be a good time to share these insights and decision points with others too. I’ve provided below some background on how the Mobile ecosystem has been changing and considerations you can look at when deciding to go app only or mobile only.

2014 was a critical year for mobile. If you have been in the Mobile Marketing / Digital Advertising space you would understand why. Ever since 2008 we heard people talk about ‘This is the year of Mobile’, every year. Until 2014 when it actually became so. It was the first year that Mobile crossed the 50% mark in what I would call the Holy Grail of internet marketing – Transactions. For the first time, several PC web heavy brands started to see a shift in usage (browsing) and later transactions – Olx was amongst the first to report a 60% traffic from mobile, followed by Snapdeal who were the first to claim 50%+ transactions from mobile and then eventually Flipkart and Myntra joined in to state that over 90% traffic was coming to them from mobile with 70%+ transactions. Olx’s claim was made in Dec’13 early 2014, Snapdeal’s in April 2014 and Flipkart/Myntra later in 2014 and early 2015.

What was surprising was the pace of this shift – many commerce co’s saw mobile move from single digit contribution to high double digits in that one year. This shift can be credited to companies like Olx, Flipkart & Amazon that made mobile the hero in all their TV commercials (see Olx Womaniya,  Amazon AurDikhao) and in my view one of the biggest reasons we saw the shift we saw. But since data is not readily available from these commerce companies (I would request them to share as much as possible), let’s look at Facebook’s publicly available data to see how fast paced this shift has really been.

MAUs in million of users; Q4 2013 mobile took over desktop

Revenue in US $ Millions

All of the above data is just to put into perspective the discussion around App Only. With such a massive shift in usage and transactions to mobile, does it merit to go App Only or Mobile Only? Over the past few months, I’ve had a chance to moderate several panel discussions on the topic with companies from varying sectors – Travel, Shopping, Music, Payments and more. You can watch these here (IAMAI Marketing Conclave), here (VCCircle Mobile Forum) and here (IAMAI E-Click). Basis these interactions and my time spent in mobile, provided below are certain considerations and reasons why one should go or not go App Only.

For App only

• If you are a “Here & Now” business, App Only is recommended

Say that you are a Taxi hailing service where the use case is experienced when users perhaps only have one screen – their phone. In such a scenario App Only is ideal only way to go given the features one can integrate – these include no login (after the first time), location awareness, immediacy of booking with one or two clicks and so on – these benefits cannot be offered on even a mobile site, let alone a website. Ola sees over 97% bookings via the App in cities like Bangalore – making an App only decision extremely easy.

• If resources are limited, App Only is a good way to start

If you are a start up with limited funds, hence limited employees, limited marketing budgets and so on, App Only will be probably the only way to begin.  Because technologies are so different, resource requirements are equally widespread. You will rarely find a developer who is both an expert in Android and Web engineering. Given this, a startup is best focused one a single asset – today that asset to consider is mobile and not web/PC – this allows funneling all resources on one asset instead of spreading resources – human and budgetary – into multiple assets.  For e.g. if you had 10 lakhs to spend would you spend all of that on App Installs or split it between Installs and Web Visits? Add to this that several new users who today experience the internet for the first time, do so from a mobile device – hence making a mobile only or an App only experience that much more easier to adapt to.

• Customization & Data Accuracy requirements need an App Only approach

That brings us to the third reason. Many times budgets spent on “visits” cannot equate to acquiring a user – with an App you are able to acquire a new user, and not just a visit. Apps use Device IDs like IMEI, UDID, Advertiser ID etc. for user identification – these provide a 100% match rate and are longer term in nature. Compared to this, PC web and mobile web visits are based only on Cookies. Accuracy and re-usability of data from App installs is therefore much higher – for e.g. ‘Recently Viewed’, ‘Recommended For You’ and many other features that help customize the first screen user sees can be done without even requiring the user to sign in – not to say that on a website we need sign in, its just that the accuracy is much higher since Cookies are often deleted by users. But when you look at the possibilities in an App environment the advantages become innumerable for e.g. Fashion Apps, say Myntra, can integrate P2P chat messaging – far easier on a phone than on PC; Saavn could recognize if you are travelling and recommend songs. There are core features on Devices that can be exploited in similar ways only by Apps. Beyond these core features there is also accuracy for Re-Targeting, enablement of other marketing options like Notifications, which become additional advantages for Apps.

Against App Only

• Browsing vs. Buying

A consumers Buying journey usually always starts with exploring – i.e. user is at the Interest stage of the Purchase funnel and hence prefer to ‘browse’ and check multiple options – call it window shopping if you like, till they reach the intent stage and decide to make a purchase. At this stage of exploration if the user is not offered an option to browse on the website or the mobile website, would that not be a deterrent? If you are not a market leader in the space it could surely impact opportunities for consumers to explore your products and hence diminish chances of a purchase, but if you have established and built a loyal users base you could get away with it – as probably had happened with Myntra. I may not like it, but I would probably still check the App. There are many brands in the fashion space that still have a web heavy usage and may continue to see that. Travel business where users tend to check multiple booking portals before finally purchasing are another category that are not going App only any time soon. Travel as a category is just about moving over the 50% mark and this again differs whether the users are buying Holidays or Air Tickets – Holidays for e.g. are still web heavy while ticketing is just moving to Mobile. The important aspect to consider here is to check how much of this browsing happens on PC vs. Mobile? How many searches happen on PC vs. Mobile? With discovery channels like Facebook going increasingly mobile only it might not be long before PC web sees less than 10% usage. Also, if you are an early stage start up then you need to consider impact of losing out on organic search led traffic and so on [Google although has just announced search app content too]. Inspite of this I would advocate that while you could explore shutting down the PC website, a mobile website is important for allowing users to browse and explore. [Myntra and Flipkart’s recent decisions validate this too].

• Omni channel vs. Single channel

As someone had pointed out during a panel discussion, the mobile is just one screen though which we access the internet, and in time the internet will be accessible via multiple screens – be it TV, PC or Wearables. In such a multi/omni channel world the user could want to purchase at any point of time – using whichever screen is convenient at that point of time. For e.g. office time purchases could take place from a PC given its accessibility or Couch surfing could take a whole new meaning if the internet experience on TV became as easy as a tablet. In essence the users’ moment of truth (want to purchase) could take place anywhere anytime, and as we increasingly move to an internet connected multiscreen world the user may want to transact through any available screen.

• Consumer preference / freedom of choice

Lastly, one very key consideration – consumer preference. When the Myntra app went app only I have to say that it was a bit frustrating – it restricted my choice. Not just me but even others around me felt restricted when there was no option to “browse” – several users also vented their angst with poor ratings. Consumers love choice – and react differently to (i) when its not given i.e. you never had a web presence to begin with and (ii) when its taken away like happened in the case of Myntra – with the former, consumers would ofcourse not have a reaction but with the latter you would certainly have negatively impacted the brand. If you are therefore a large brand with sufficient resources to run multiple assets, you perhaps should; especially if you always offered them before – your App could always add significantly more features but the consumer always has a choice and freedom to choose how they engage with your brand / product.

 In Summary

App only is a complex topic – the above considerations are limited and don’t cover all reasons to go or not to go App Only – one thing is clear no one answer is right. Any brand that is fighting this decision will have to consider many such reasons, several data points, consumer sentiment before finally doing what is right for their strategy and their users.

It will eventually boil down to one thing – how powerful a brand have you been able to create? Flipkart is the only shopping app I have on my device for the last 2+ years – others have appeared on and off, but flipkart has not once been deleted; and can’t think of the last time I bought something from their website. Will it bother me if they go app only? Perhaps not. But then again even they realize the importance of letting users browse and hence relooked at having an mweb. If not App only, Mobile only surely is a sustainable way to go.

As for our startup, we are going the App only route to begin with (limited resources), but will surely be adding the mobile web as soon as viable for us. And who knows maybe we’d be on every screen with internet. Time shall tell :)