App Growth Series
Every year, Mary Meeker, a prominent internet and mobile analyst with KPCB, does a detailed postmortem analysis of Internet Trends. She also provides entrepreneurs, a window into the future of what innovations to expect.
This is part of a series of blogs about what opportunities we see for app publishers and with recommendations on how to further grow apps.
This is third blog in this app growth series.
The first one was about China & India surpass US internet users, and Growth opportunity for app publishers.
The second one was about Maturing app market & subscription incentives means growth opportunity for app publishers
Per Mary Meeker’s report, Internet as retail distribution channel has growth to over 10% of the total retail sales of $3.4 Trillion. E-Commerce and M-Commerce continues to grow as a distribution channel from approximately 1.75% of total retail sales in 2000, to 6% in 2010, and now to 10.5% in 2015.
Consumers are increasingly shopping directly from brands. while retailers leverage insights to develop own vertically-integrated brands. Less differentiation between products, brands and retailers as single products evolve into brands. New distribution models emerging enabling direct-to-consumer commerce in the home.
Retail now is an intertwined combination of technology, media and distribution. Buyers prefer media rich buying experiences. Digital retailers continue growing and all physical retailers are adopting e-commerce and succeeding. Image-based shopping platforms like Pinterest and Instagram have shown the importance of images and and even videos within apps.
The line between products, brands and retailers is becoming blurry. Warby Parker started as a brand and online retailer selling eyeglasses as a product. It now sells online, via physical stores and from its app. Brands and Retailers continue to offer apps that meet the expectations of the users.
Mobile and Conversational Commerce
Mobile Commerce is quickly becoming the new norm to buy and sell products. As brands around the world integrate improved systems to allow the online sale and purchase of items, mobile eCommerce is emerging as a favorite for consumers around the world. With a wave of new mobile apps to securely process payments in a matter of seconds, at least one of three of all eCommerce transactions are now completed via a mobile app.
See article Mobile commerce is eating commerce the world
Conversational Commerce based on artificial intelligence interfaces via chat bots through WeChat and Facebook messaging platforms is already becoming a frictionless way to shop. The following shows communication with a shopping bot in Facebook messenger and a weather bot in telegraph. Once you add a bot you can communicate with it similar to how you would communicate with a real person. A bot communicates with a backend hosted in the cloud, or within another app (using deep linking), or a hybrid.
Reliance on Data
The New Normal in retail is to use collected data to launch new products and private Labels. Amazon has launched number of private labelled products based on sales of items on amazon.com. Internet-enabled retailers, products, brands are on a rise, bolstered by Mobile’s always-on connectivity, hyper-targeted marketing, images and personalization.
For app publishers, Behavioral Intelligence based contextual marketing is the key to successful and effective marketing. Identifying and understanding app users by segmenting them into niche segments, improves the effectiveness of promotions and more importantly allows app publishers to personalize the app for users.
Personalizing apps based on location, context, usage, behavioral traits makes experiences immensely better and increases engagement and loyalty.
Commerce based on Visual Usage, both Video and Image continues to rise
Video Usage, Sophistication, Relevance Continues to Grow Rapidly. Over 3.25 billion photos are shared each day on select platforms (snapchat, Facebook Messenger, Instagram, WhatsApp, Facebook) 55% of users use Pinterest app to find and shop for products.
Image-based shopping platforms like Pinterest and Instagram have shown the importance of images and and even videos within apps.
Apps that utilize images and video have 3x to 4x engagement.
Apps that utilize images and video have 3x to 4x engagement. Higher the engagement, higher the revenue in a world where 96% of the apps are free and in-app advertising and in-app purchases are the main sources of revenue. e.g. OfferUp app is an image based marketplace.
Apps that utilize images or video have 5x the view to purchase conversion, compared to apps that don’t. e.g. Sketch app allows adding products from Houzz Marketplace images both from Houzz or app user’s sketches.
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