Speakers’ Corner: App stores for retailers

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The mobile content and services market is set to be worth $17.5 billion globally by 2012, worth more than CD sales in 2012 ($13.83 billion). Mobile application downloads are expected to increase from over seven billion in 2009 to almost 50 billion in 2012 – a year on year growth rate of 92 per cent.

This seems like the kind of market opportunity that mobile retailers should be interested in.

Today this market is dominated by networks and manufacturers. Retailers/dealers are getting no revenue from it. But over half of all mobile connections are sold by retailers; they face the consumer at that critical moment when he or she may be persuaded to add some content to the purchase. The consumer trusts them.

Sure, the geeks (or ‘early adopters’ to use the marketing jargon) can’t be separated from their Apple or BlackBerry application store, but the man on the street? Mobile retailers can reach into a whole new growth market.

The revenue opportunity is impressive, but also the potential to differentiate, rather than to continue selling the same phones and tariffs as everyone else, just at a slightly different price. This should enable retailers to sell more connections. Another benefit is the potential to create an ongoing billing relationship with customers, and increase their loyalty.

Of course it is not an easy business to get started in. What do consumers want? There are questions also of supply of content, validation of it, testing of it, integration of it, as well as issues around sales, billing and taking such a service to market.

Clearly, it is a daunting task for retailers to create their own mobile services and content portfolios, which can be easily and economically offered and managed, not to mention time consuming and expensive.

So what is the solution? It is very important to have an efficient in-store sales process that doesn’t take too long.

So, for example, a prepay card that can be redeemed by a consumer at home in a retailer branded web store makes for a simple impulse purchase, and represents a stand-out item in store. Likewise, a retailer-branded application store on a phone, with an interface that allows where consumers to easily browse and buy content is a good solution.

The right kind of content is another consideration. One of the problems with the big application stores is wading through 100,000 items to find something of interest. It’s like surfing endless cable TV channels, and too often boredom sets in before purchase. Having the right products on the shelves is a classic retail skill.

Also, it’s not just about mobile games, music, wallpapers, Facebook and Twitter. There are many other valuable services  – backup, remote wipe and security for for business customers, for instance. Ten thousand mobile phones are left in London taxis every month, containing valuable and sensitive information.

Building a services business also requires a system that automatically records customer history, essential to deal with questions, and critical to running marketing campaigns to customers to keep revenue flowing. Having a system which enables this to be put together quickly, and targeted at the right customers (with compatible phones and the right user profile) is critical.

Given slowing growth and margins on connections and prepay top-ups, mobile retailers urgently need to find new and profitable revenue growth. On the other hand, ‘in-life’ revenue potential is increasing as handsets become more sophisticated.  There are more things to do on a mobile phone than ever before.

So mobile retailers really should act now before they miss out. Mobile application solutions that work in-store, on the web and on a handset, branded as your own, provide a valuable route to capture a slice of the burgeoning post-sale revenue stream.

Content and services are the mobile accessories of the modern day. It’s a fast growing new market which mobile retailers are ideally positioned to benefit from.

 

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