Should Brands Abandon their Mobile Apps

Alex Matjanec CEO


Does your business have a branded mobile app? Is it achieving the success you expected? Do you know why you built it in the first place?

At AD:60 we are constantly approached to help brands and entrepreneurs concept and develop digital solutions that are core to their business and in many cases ARE their actual business. So when I saw a stat that predicted almost 20 percent of brands will be abandoning their mobile apps by 2019, I was intrigued.

This statistic was a prediction from Gartner. They’re a big o’l American research and advisory firm that IT and other business leaders use as a resource for information technology related insights.

Their prediction is:

Many brands are finding that the level of adoption, customer engagement and return on investment (ROI) delivered by their mobile applications are significantly less than the expectations that underpinned their app investment. New approaches are emerging that have a lower barrier to discovery and install, and offer levels of engagement that approach those of applications at a fraction of the investment, support and marketing cost. Many companies will evaluate these experiences against their under-performing applications and opt to reduce their losses by allowing their apps to expire.

Do you agree with this statement? I would say if you’re investing in something that isn’t meeting expectations and is costing more money than it’s bringing in, then yes maybe it is time to pivot.

In seeing this prediction I had two initial thoughts. The first is a bet that these brands built their app during the initial wave of app happiness and the idea that every brand needed to have an app. It makes sense at the time since we had the hype of the iPhone and first-hand experience of multiple tech companies scaling to insane valuations through their ability to connect with customers through a mobile app. The second was that brands saw it as a distribution channel before understanding that it costs money getting people to download your app and just like a website, there needs to be a reason to interact with it in the first place.

Additionally, there are cases where brands use an app as a way to break into a new vertical, but eventually fall flat due to a disconnect to their mission and that inevitably makes the app a distraction.

Gartner goes on to say new approaches are also leading to this decision and to that I say there always will be new approaches. It doesn’t mean the medium was wrong. Instead I would challenge to say the strategy was a failure before the app was built.

At AD:60 this is a common debate: what platform should it be on, and does the app itself solve a problem or fulfill a need otherwise not already addressed.  As you think about if an app is the right investment for you, here are two cases I find helpful to consider and hopefully in the process avoid wasting a ton of money and being a trending stat.

Case #1: Mobile traffic doesn’t = Build an app
A retailer popular among high-school and college students was seeing their eCommerce conversions decreasing due to its audience shifting to a mobile screen. AD:60 was contacted to help create a mobile app to help in capturing this shift in behavior and ensuring continued growth through mobile commerce.

Before jumping into strategy and design, we took a deep dive into their analytics to see how customers were engaging with the retailers. We quickly saw that direct traffic and brand term visits were low to none compared to their total traffic. In fact, what became the key finding was that almost all of their traffic was coming in the form of long tail key terms such as  “red lava lamp medium size”.

This was a key indicator that a branded app was the wrong approach.

Building a branded app would result in the retailer having to spend considerable money getting its audience to first download the app and then keep it top of mind when it came time to make a purchase. They were focused on conversions and not long-term engagement.

This learning shifted the focus and resulted in a decision to overhaul their mobile and tablet experience, using screen dimensions as break points so to not impact their existing desktop experience.

Six months after launch, conversions were up 100%, average order sizes grew 10% and mobile traffic also increased 12% due to a better experience. In the end the objective was met, and a mobile was never built.

Case #2: Using a mobile app to break into new categories still require a clear vision
When an AD:60 partner felt their customers were pivoting to a DIY approach, they saw the need to follow suit. All signs pointed this to be true and leaders in this space were seeing tremendous growth through a mobile app experience. Together we worked to build a new concept that offered advanced algorithms, direct human connections through chat and a tailored plan backed by a proven brand.

The project completely failed. The concept did not.

The issue was that the solution ended up being counterintuitive of who the brand was and their mission. The leap to adopt this approach was too aggressive for the internal culture to succeed. All signs pointed to the app being expired by the end of the year, but the technology was strong, and so we took a step back, asked ourselves what we were missing and instead of shutting it down, pivoted the experience back to the existing customer.

The result generated new revenue streams that acted as an extension vs a competitor to its own brand. The customer wasn’t split and neither was the company giving the app a clear focus and results followed. Customer engagement increased 2000%, revenue went from zero to $6 million annually and loyalty to the brand jumped 50% in the form or subscription length, confirming the brands vision was always right, the technology just needed a bump.

Have an example of a case where a branded app was the wrong move and you avoided it? Please share in the comments.

Hi! I’m Alex. As CEO of AD:60, it’s exciting for me to share my thoughts and opinions of what we’re seeing in building some digital business that impact millions of customers each year. I look forward to your feedback and sharing this experience with you.

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