4 Big Insights into Mobile Spending

February 24, 2017
 
Ashley Rondeau

There’s been a recent slew of good news for those of us in the mobile space in terms of earning revenue. In case your company is debating whether going mobile-first is a financially sound business strategy, here are 4 take-aways to consider from these recent reports.

1. Consumer spending on mobile is up.

Probably no surprise to anyone anymore, but mobile spend continues to grow year-over-year. According to Business Insider, iPhone users spent on average $40 each in 2016. This is a 14% increase from 2015 despite a small decline in overall app installs. As always, much of the spend came from games but there were growth in other categories, especially as Apple pushes to become a more services-oriented company (ie. Apple Music).
But what of Android which has always lagged far behind Apple in terms of app profitability? There seems to be good news there too. According to a Q4 survey from PubMatic, Android ad revenue exceeded iOS ad revenue for the first time. While this is an indirect statistic to app revenue, it does show that Android apps provide as much benefit to ad dollars as with Apple, which will keep both platforms attractive to developers and companies looking to monetize mobile users.
In total, according to comScore, mobile spending during the holiday quarter amounted to $22.7 billion of the total spent online ($109.3 billion). This was an increase of 45% from Q4 of 2015. It’s a growing slice of the pie and if your company isn’t earning sales off mobile apps, you’re definitely missing out.

2. Mobile continues to influence off-line spend.

While mobile retail sales are growing, they remain just a tiny percentage of total retail sales to the tune of 1.3% according to Forrester. However, it’s clear that mobile traffic directly impacts off-line sales. Deloitte says 56% of off-line sales are influenced by digital traffic and a giant chunk of that is due to mobile traffic. To put in terms of dollars, Deloitte estimates that of the $2.1 trillion retail sales influenced by digital, $1.4 trillion of that was driven by mobile.
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We’ve written about how to use your company’s app to increase your retail sales and it seems like more and more companies are realizing just how powerful a marketing tool apps are. Since 84% of shoppers with smartphones use their devices while in stores, it’s no wonder that there is this “mobile bump.” It’s fair to assume that mobile’s influence here will continue to grow, but taper off as devices saturate the market. Which means companies should take advantage of this quickly.

3. Mobile wallet spend is up.

More users are getting comfortable ditching both cash and card, and tapping their phone instead. According to Juniper Research, mobile wallet spend globally “is expected to rise by nearly 32% this year to $1.35 trillion.” To be fair, much of this spend is centered in eastern countries like China where mobile wallets have been embraced more so than in the US and Europe, but western countries are expected to make great strides due to increased user comfort, easier to use apps, and deregulation. In fact, Forrester estimates US mobile payment transactions will grow to over $280 billion by 2021.
It’s good to see that app developers’ investment in security and privacy is paying off in consumer confidence. In one survey by Mobile Payments Today (ok, sure, that name might imply a bias), 80% of consumers felt mobile wallets are secure. Even if this number is exaggerated, it shows that half of all mobile shoppers are willing to put their financial trust in apps. As long as companies can maintain this trust, we should see these transactions continue to grow rapidly.

4. In-app transactions are on the rise.

According to a Gartner survey, in-app transactions are up 26% from 2015 while paid-for downloads only increased 4%. While the majority of users still want to spend nothing on apps, those that do spend are more apt to spend via in-app transactions.
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Thus it still makes the best business sense of keep apps cheap and rely on incremental spend within the app. And don’t worry about these “microtransactions” turning users off. Even with fickle gamers, 77% felt microtransactions can be beneficial overall. As long as you’re not nickle-and-diming your users, and your app is designed to deliver genuinely better features from in-app transactions, this can be your best bet to generating revenue from your mobile app.
In all, things are looking very rosy on the mobile revenue front. How is your company taking advantage of this trend?
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So, if you don’t know where to get started with a blueprint for your app, Rocket Farm Studios can take the pressure off.

3 Red Flags Telling You to Outsource Your Mobile App Development

February 13, 2017
 
Ashley Rondeau

As app developers, we are fortunate to often work with clients who are launching their first app. It’s a collaborative process that always leads to amazing products, built from the ground up. Then there are other times where we’re brought in after an attempt has been made… and usually not a moment too soon!
If you’ve ever tried to do your own plumbing, app development is like that: it can be way more complicated than you’d expect, and tiny details can be the difference between a flushing toilet and a rising tide of horror. So when do you know if your company is in over its head when it comes to making an app? Here are three red flags that will signal when it’s time to outsource your mobile development.
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1. Your app development time table is too long.

According to a recent survey by outsystems.com of over 3200 IT professionals, 40% said that it took between 6 months to over a year to deliver a finished app. Did we read that right? By the time the app comes out, it’ll already be obsolete! That sort of lengthy development time for software can make or break a business, especially in our mobile-first world.
There are a slew of reasons why apps can stew in development hell, but it usually comes down to one thing: resources. A good app, like any good software, takes a lot of effort. You need a rock-solid design that can translate to rapid iterations of wireframe models, your backend team communicating well with your UX team, and a deep understanding of best practices at every step. Poor sprint management always leads to lengthy delays, so project management is also paramount to timely app development.
All this can be nearly impossible for even enterprise-level companies to accomplish. If your app’s launch date is continually getting pushed another two weeks, it’s probably time to outsource development.

2. Your MVP is bad.

Lots of tech blogs say that get to your Minimum Viable Product (MVP) and push it live, then iterate quickly. Although this has been repeated countless times, we don’t think this is great advice when it comes to mobile apps. The reason is that smartphone users just don’t give new apps much of a shot.
App downloads are slowing, perhaps by up to 20%. That means less people are downloading new apps altogether. Meanwhile, 77% of users don’t open a new app again after 72 hours, and it’s often because that initial experience is just not up to snuff. So we have a user base that is both reluctant to download new apps, and to give new apps much of a chance. And you want to release a half-baked MVP? Hmm.
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When it comes to mobile software, first impressions matter more than businesses realize. After all, there are often many other similar apps to choose from. If your company is racing to put out a MVP that is just so-so, you might be setting yourself up for a situation where you won’t get a second chance. It’s important to put out the best app you can from the get-go, and outsourcing your app can ultimately nab higher ROI when loyalty is earned due to a better product.

3. You just don’t have the expertise.

Seems like a no-brainer, but you’d be surprised just how many companies lack the skill set internally but still forge onward with a complicated app development. Almost half the IT professionals surveyed in the outsystems.com report said that there was a knowledge gap with mobile that slows development.
It’s no secret that there is a shortage of mobile app developers which is a growing problem for the industry as a whole, but also for individual companies that try to rely on unproven talent to build their apps. Remember, it’s not just the app itself; it’s integration with the backend, it’s integration with the cloud, it’s security, it’s speed of deployment, it’s scalability. It’s a lot, and even enterprise-level companies have stumbled at the scope of their mobile projects. Even if they technically have the resources (aka man-power), the lack of expertise will slow development to a crawl.
Look, not every company can quickly get up to speed on iOS’s latest changes or programming in Swift. If you’re spending more time (and money) on just learning the skill set instead of developing, it’s time to outsource your app.
Do you think your company needs help creating your next mobile app?
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So, if you don’t know where to get started with a blueprint for your app, Rocket Farm Studios can take the pressure off.