The app economy is set to reach $189 billion in revenue by 2020, and with time spent in apps nearly doubling over the past two years there’s no denying the massive opportunity for businesses to expand their reach and tap into the app advantage.
The mobile-first mindset has spread across consumers and many businesses. And, now that mobile has proven to be a critical component to a sustainable business, apps are frequently referenced as a signal for business growth, viability and overall success. The question is no longer “Should I have an app strategy?” but rather “What do apps mean for my business?” Yet, many brands still fall victim to common myths of the app market. So, let’s set the record straight:
Myth 1: Consumers no longer download apps.
Rumor has it that the app economy has peaked and that downloads are on the decline.
The Truth: In 2016, global app downloads surpassed 90 billion across iOS and Google Play. This represents 15 percent annual growth — an annual increase of more than 13 billion. In the U.S., consumers downloaded 12 billion apps last year, an average of roughly six per month, according to App Annie data. Businesses that buy into this myth will lose to competitors and tarnish their brand. The app stores are alive and well, so every brand needs to have a robust app strategy in place.
Myth 2: The app store is only for big publishers.
The assumption here is that big players like Facebook, Twitter and Snapchat are dominating app stores, and new players have little to no shot in such a saturated market.
The Truth: Our data shows the app economy experienced 20 percent year-over-year growth in new apps — more than 2.2 million last year — capturing consumer attention across verticals and countries. Look at the gaming space for instance: Within the last year, Pokemon GO and Super Mario came out with a bang, giving long-standing games like Clash Royale increased competition and opening the door for AR. Verticals like retail, banking, travel and foodservice have seen huge growth. The app economy and the app stores present a huge opportunity for new and emerging apps to make their mark, as long as they have the right strategy.
Myth 3: Downloads = dollars.
Many believe downloads are the most important metric when determining the success of an app. They assume that if downloads decline, the app is not performing well and conversely, that downloads are a measure of engagement.
The Truth: Usage is the new currency of success, and Americans on average spend well over 2 hours per day in apps. Usage metrics that track engagement are more indicative of an app’s success than downloads alone. What happens after the download is what ultimately matters: Are users engaged, or do they download and dump? How much time are they spending in the app and how often? What’s your retention rate look like? These metrics can guide businesses to optimize the experience to capture more revenue and increase customer satisfaction.
Myth 4: Bots will overtake apps.
The rise of bots brought forth the idea that apps are old news and chatbots are the “next big thing.”
The Truth: Apps aren’t going anywhere. App Annie data shows that average consumers use more than 35 apps per month, and time in apps has nearly doubled over the past two years. Conversational products simply cannot compete with the breadth and depth of value provided by visual experiences. We are still at the beginning stages of bots. Though bots and conversational experiences may play more of a role through integrations in time, they will not displace apps all together.
Myth 5: Apps are a “nice to have” not “need to have.”
Though we know consumers are primarily mobile-first, some businesses still don’t see mobile — let alone apps — as a necessity, but rather as optional, if budget permits.
The Truth: No one can question the importance of mobile as a critical tool for business success. In today’s market, we’re not only seeing digital-first apps compete with incumbents, but also long-standing businesses are implementing mobile-first strategies. In order for any brand to successfully engage its audience, it must meet customers where they are, whenever they seek to engage. Apps uniquely enable this and are fueling this mobile first transformation.
The amount of success we’ve already seen in the app market makes it impossible to dismiss this industry as a “novelty” or “optional” any longer. With the maturity of the market, businesses of all types can reap the benefits of a well-designed app. However, by heeding these misconceptions, many are missing out on the opportunity at their fingertips. Armed with these truths, any business — from games to banks — can be transformed for long-term success.