The app stores grow in size and it becomes very hard to gain visibility and sufficient usage for the majority of the services offered. What was first a market place for small developers has now become an important marketing and sales channel for well established brands. Less known services and brands, that initially may have gained some attraction, now find it harder and harder to succeed. The app stores have turned into huge warehouses where the consumer may find what she’s already familiar with and is looking for, but with quite limited or low precision support to encourage exploration of new services. Increasingly the most successful and used apps rely on a brand with an existing user base from other media such as the online web, television, and print. There are exceptions but they become more and more rare.
Why have the very promising phenomena of the app store resulted in a very limited usage for most services offered? There is fundamentally nothing wrong with the app stores but the expectations are far too high. Why? This is due to a number of reasons:
- The app stores are not really built as stores. Let’s just compare to the ordinary grocery store. The most frequently bought items, such as the milk, is far into the store and on the way there you are bombarded with promotions and offers. The business is carefully managed to: promote products in cooperation with the suppliers; align with other marketing channels; make us buy specific products by intelligent shelf management; improve loyalty by cards and programmes resulting in increase revenue and decreased customer acquisition cost etc. For the app stores to really become stores there is a long way to go.
- Most of the services offered are actually not good enough. The services are actually not meeting a demand from a big enough market segment. Many developers are prepared to take a chance developing and launching a new service, but many times with limited knowledge about the market need or how to reach a specific target group. Most services should never have been developed and are just a waste of resources. Trial and error may many times be a quite costly way to determine if there is a true market need or not.
- There are very limited means to reach a specific target group. Many apps would probably be quite appreciated by a specific and limited group but there are not good enough support to make this happen. The logic is now mainly based on that the end user knows what she’s looking for or that she’s regarded as an average user offered the same as anyone else. There needs to be ways for the suppliers to target specific groups is a cost efficient way.
- Most services are not marketed at all. With the exception of established brands with existing marketing channels, the services are hardly marketed at all. You can hope for that you get some free PR, being mentioned in a popular blog or similar, but what are really the chances of getting attention among 100.000 apps without a know brand or a substantial marketing budget? I would say that they are quite slim.
- Recommendation is underdeveloped. As the number of apps grow to very high numbers it starts to become much harder to find what you are looking for. Search will help you to find what you know exist, while recommendations will help you find what you did not know existed or that you were looking for. The recommendation tools are today quite limited and recommendations are mainly found on online web sites. Seems like quite a detour.
- The app stores have a too wide scope. As the stores grow and the end users become more advanced there is a growing need for niche app stores or sites focusing on specific interests. You need to put the services in some kind of context which will also improve the marketing and PR possibilities significantly.
- Most apps are bad business. The business cases for most apps are rather optimistic. Far too little resources, if any, are allocated to marketing and with limited revenues further development and promotion of the service become quite a challenge. Even a very good app may be buried under piles of other less attractive services and with very limited possibility avoiding a slow death.
Is there a solution to the problem? From the app store owner perspective they need first to figure out what they want to achieve running a store. With the limited competition a warehouse approach may be ok for the time being. However, eventually the present app stores have to decide if they should stay as “app warehouses”, if they should develop into real managed niche stores or shopping malls. One may also question the sustainability of the business models and if there’s really a need for the app stores further down the road. If staying with the present strategy they need to strengthen the recommendation functionality and possibilities to involve the end user. There need also to be better possibilities for suppliers of apps to directly target specific customer segments.
As the app store owners presently are quite happy, advice given to the developing community may be more worthwhile:
- Add the chapter Marketing to your business plan. As we all know, no product will sell itself. Don’t rely on that the app store will market and sell your service. Partner up with known brands, market through existing channels and allocate resources and money for this.
- Address specific needs of a defined segment that you have the possibility to target. Do the homework. Is the market really big enough?
- See to that the service is good enough. Depending on addressed market you have to see to that you really fulfil the needs of that target group. Services giving a close to good enough experience for many but not really good enough for any, will hardly gain usage or loyalty.
- Enable viral marketing. Make sure a happy user can act as an ambassador for the service and recommend this within her network.
- Keep costs down and have a realistic view on the revenue potential. Make sure you have enough to develop a good enough product and to market it. Go for general platforms, such as UMIs, to avoid high additional costs redoing the same service in different versions for all different devices. Consider a browser based approach as opposed to the more costly and harder to manage app/client approach.
- Minimize your risk. Have a portfolio approach as it is very hard to predict what services that will really become successful. Calculate and prepare for that the majority of the services will fail.