In-store mobile app usage is quickly replacing many of the traditionally available services in brick-and-mortar locations. Consumers are turning to their phones—rather than sales associates—to find locations, get product information, pay for purchases, and collect rewards points. These mobile apps are helping to make shopping trips easier for consumers, and brands need to get on board to take advantage. A brand must be prepared to offer mobile apps to consumers that help improve the in-store customer experience to compete in today’s crowded market.
One of the biggest questions most brands face when choosing an in-store mobile app marketing campaign is if their in-house app is enough or if they should partner with a third party. While there are drawbacks and benefits to each, the true answer lies somewhere in the middle. The most prepared brands are leveraging third-party apps with branded apps to maximize their reach.
The Advantages and Disadvantages of Branded Apps
Branded apps are common for retailers and restaurants but not so much with CPG brands. With branded apps, a company develops it in-house—or pays someone to create it—and is ultimately responsible for the app. While these apps offer some benefits, there are also a few drawbacks.
| Pros | Cons |
| Rewarding loyalty: Branded apps focus on those who regularly engage with a brand, whether they’re buying a product for the tenth or hundredth time. Usually, incentives increase as loyalty increases, which encourages ongoing loyalty and app retention. | Difficulty in pulling new customers: Usually, only someone who regularly buys a product or shops in a store will choose to download a branded app. As such, it’s difficult to get the attention of new customers who are not already loyal to your brand. |
| Low competition: With a branded app, a brand can put the spotlight on their products while not having to compete with other products in the same category. | Challenging retention: Branded apps designed for use at one location or with one brand tend to have low retention rates, in that the consumers will download the app for one-time use and rarely use it again. |
| Improved brand perception: Using a high-tech, engaging branded app that assists the consumers in-store creates a positive brand impression as the consumer views the app as a free service provided by a company. | High expense: The cost of both building and maintaining a branded app can be extremely expensive, or even cost prohibitive. This is especially true in the development of high-tech apps which offer features like augmented reality or proximity messaging. |
Branded apps can be a great way to reward customers for their loyalty to a brand’s products, but they’re also a risky endeavor. If the app fails to take off, the brand will be out a significant amount of money with very little return. These types of apps can be great for larger, well-known established brands but not as good for challenger brands.
Partnering With Third Parties for In-Store Mobile App Usage
The options in third-party app partnerships for brands are numerous. Brands can connect with third-party partners to handle all their app’s needs, or to enhance their program with a few basic features. With Shopkick, for example, brands seek out a partnership to supplement their existing app program. Here are the pros and cons of working with a third-party app provider like Shopkick.
| Pros | Cons |
| New market exposure: By working with a third-party app provider, a brand can gain exposure to that platform’s audience. These individuals may not have heard of or tried a product before, meaning a brand has the potential to expand its market share via a third-party app. | In-app competition: Third-party apps represent multiple brands and retailers, meaning there is the potential that a brand could be up against some competition within its category. |
| Access to new features: Third-party app developers have one primary mission: develop the app. This specific focus means they have the time and resources to dedicate to adding new features like AR and rewarded video options. | Limited control: When working with a third-party app, a brand will have limited control over what that app offers. While the brand can control the content they share about themselves on the app, they will have limited input into the app’s features. |
| Lower cost: The cost of partnering with a third-party app is often less when compared to those associated with adding and maintaining features to an existing, in-house app. The brand also gains access to new features at no increased cost and can offer customers emerging options when doing so in-house might have been cost-prohibitive. | Fraud risk: There are many third-party app developers and not all are created equal. To ensure you’re working with a reputable provider, seek out companies who are verified by TAG and with audits completed by MRC compliance standards to ensure you’re working with a quality company. These certifications ensure they follow rigorous, established standards in digital advertising. |
Third-party apps can provide an abundance of features that brands can leverage to reach out to new consumers. These partnerships allow your brand to connect with new audiences while limiting the potential high costs associated with in-house development. This benefit is especially true for in-store features, where consumers are notified of a brand as they’re in the shopping aisle.
The best solution for leveraging in-store mobile app usage isn’t deciding between a branded and non-branded app. Often, it’s better to use a combination of both.
The best solution for leveraging in-store mobile app usage isn’t deciding between a branded and non-branded app. Often, it’s better to use a combination of both. The third-party app can resolve the issues in a branded app campaign and vice versa. Brands that recognize the need to leverage both types are the most prepared to cater to the increase in in-store mobile app usage.
Shopkick provides an innovative, intriguing app that our partners use both standalone and to supplement their in-house programs. For more information on becoming a Shopkick partner, contact us.
Image courtesy of fizkes
