Retailers move with lightning speed to create mobile apps
By Kim Leonard
Published: Sunday, Dec. 11, 2011
Mobile phone apps are starting to become a key shopping tool — as important to some bargain-hunters as clipped or printed coupons.
Download and launch the Shopkick application onto an iPhone or Android smartphone, for example. Then walk into an American Eagle Outfitters store, stand still at the entrance for a few seconds and collect 35 points, or "kicks," toward a gift card.
There are apps that compare prices, provide discounts, compile and share shopping lists, keep track of receipts and, of course, make purchases. Many can be downloaded at no cost.
"The big story this year is the prevalence and usage overall of these mobile tools, and the spike we are seeing in it," said Paige Beal, a Point Park University marketing professor. For many, "the cell phone is the most intimate connection we have. A lot of people sleep with their phones on a table next to them."
Half of adult cell phone owners now have apps on their devices that do various things, the Pew Research Center said, based on results from a recent survey.
But app use while shopping remains new.
Consumer electronics site Retrevo.com said 43 percent of people it surveyed who own smartphones — cell phones with Internet access — have installed a retailer's app. Only 14 percent have used an app to make a purchase, but 42 percent use their phones to compare prices.
Travis Kress, 19, of Shaler, has used the RedLaser barcode scanning app to check prices on items he's interested in. "There are QR code signs all over the mall," he said, referring to the square, "smart" quick response barcodes that give product details when scanned, and are rising in use at Ross Park Mall and other retail centers.
Kress said he's been meaning to download Amazon's Price Check app that uses a photo, spoken or typed-in product name or barcode to research products. He figures he'll use retail apps more often in the future. "I know it's getting really popular," he said.
Warren Moik, 26, of Beechview, uses Key Ring, an app that scans and stores loyalty cards so a user doesn't have to carry stacks of retailers' plastic cards. Key Ring delivers retail rewards, too.
Cellfire is a favorite app for getting digital grocery coupons, Moik said, and he uses Google Goggle to scan barcodes and check prices elsewhere, when he's looking at something in a store. "It saves money," he said.
Almost all of the people polled informally during a mid-day visit to Ross Park Mall this week said they don't use shopping apps.
Wendy Liebmann, CEO of market research firm WSL/Strategic Retail in New York City, wasn't surprised. "For the first time in a long time retailers are actually ahead of shoppers, and being quite aggressive in taking advantage of new technologies," she said.
One example: Shoppycat, a Walmart app that links to Facebook, and allows a user to build a gift list using friends' likes, such as fishing, or jazz music. App use will increase as smartphones and data plans become more affordable, Liebmann said.
A survey by her firm this year found that 48 percent of respondents identified as tech-savvy "digital actives" used their mobile devices inside stores, up from 27 percent in 2010.
It's easy to start using apps to shop, said Scott Hirsch, founder of appsbar of Deerfield Beach, Fla., which provides app-building tools at no cost.
"Look for the stores you're already shopping at on the Android marketplace, or iTunes or the Apple App Store," he said. Many retailers offer special deals via their apps, and mobile users who share their locations through global positioning system, or GPS, technology can view specifics about products sold at nearby stores.
Mall owner Simon Property Group Inc. of Indianapolis, which owns Ross Park Mall and South Hills Village, has an app for the iPhone or Android devices that is "well into the six digits, in terms of downloads," spokesman Les Morris said. Based on a user's location at any time, the app finds the nearest Simon mall and lists sales and other details.
Retail centers and bricks-and-mortar stores are using apps that award points and instant deals during visits to get consumers off their home computers, and out shopping again, experts say.
"If an app prompts you to make a purchase while you're in the store, that's huge," Beal of Point Park said. "How many TV commercials have you seen that inspired you to jump off the couch and go make a purchase• Not many."
Walmart and Amazon have been particularly aggressive this year, in vying for mobile customers, with Walmart trying to wrest the No. 1 spot in online retailing away from Amazon, Beal said.
Amazon last week announced a discount of up to $5 to shoppers who scan qualifying products inside stores, then buy from Amazon. The Retail Industry Leaders Association criticized Amazon for encouraging consumers to use stores as "showrooms," and then buy online.
Many retailers with tight ad budgets remain skeptical of mobile sales tactics.
Just 36 percent of chief marketing officers included mobile in their holiday strategies, professional services firm BDO USA LLP of Chicago found in a survey. Mobile is "still in the experimental stage," but huge growth is expected, said Steve Ferrara, a partner in the firm.
American Eagle Outfitters Inc. CEO Jim O'Donnell praised the new AE app in a recent call with analysts. The app drives customers to stores with rewards, and lets them order online and put outfits together.
Mobile sales for the South Side-based retailer have more than tripled in the last year, he said.
Hirsch, of appsbar, said retailers used to spend up to $100,000 to create apps. His free app-building software has 50,000 users, including small retailers, and more boutique or local candy store apps will show up in markets for downloads. About 5,000 apps are created daily, he said.
Shoppers still can expect to see e-mails, text messages and more traditional ads. "To the dismay of most marketers, none of this is replacing what has gone before," Beal said.Additional Information:
Mobile phone applications can check prices and provide other details on potential gifts. Some apps are available for tablet computers. Here's a brief list:
• Amazon Price Check , a barcode scanning and price comparison app that gives results from the online retailer, and retailers that sell through Amazon. Also, Amazon Mobile can use an Amazon account to make a wish list that others can view, and Amazon Santa helps adults help children to make their lists.
• RedLaser , owned by eBay Inc., barcode scanner that shows whether other stores in an area or online retailers aligned with eBay sell a product for less. Google Shopper and ShopSavvy also scan barcodes.
• Shopkick , game-like app that provides rewards for walking into a store, scanning products or making purchases.
• Shoppycat , Walmart app for Facebook users that makes gift suggestions, based on friends' interests.
• Gift List Manager , helps a shopper set up a budget, note which gifts were bought for people on a list and how much was spent. The app keeps a running tally. Also, Lemon puts a photo of a printed receipt into a graph, so a shopper can see how much of a budget remains.
• Key Ring , scans and stores retail loyalty cards, delivers coupons.
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