ARCHIVES: This is legacy content from before Industry Dive acquired Mobile Commerce Daily in early 2017. Some information, such as publication dates, may not have migrated over. Check out our topic page for the latest mobile commerce news.

67pc of small businesses plan building mobile app by 2018: report

Although mobile applications are generally seen as the territory of large conglomerates and their constituent brands, a new report from Clutch claims that an ever-increasing section of small business are seeing their implementation as best practice.

Clutch’s 2017 Small Business Mobile Apps Survey contains a plethora of information about the current state of mobile apps and their penetration into the small business sector, which the layman generally sees as lagging due to budget concerns. The survey reveals that in reality, almost half of small businesses (42 percent) have built a mobile app, and most do so at significant cost in order to bring better customer service and ROI opportunities to their doors.

“I think there are multiple factors at play here, including cost, age of management personnel and relevance to the user,” said Grayson Kemper, content developer and marketer at Clutch. “We found that the younger the owner or manager of a small business is, the more likely it is that a SMB (small or medium sized business) will have a mobile app.

“While this is encouraging, there is still a sizable cohort of older management that have not yet grasped the impact a mobile app can make on a business,” he said. “Perhaps the most significant factor is cost.

“While developing is becoming an easier and cheaper process, it still requires a substantial investment as well as a devotion of ample time and resources. Some small businesses, especially those under 10 employees, simply cannot afford to pursue that at this point.”

Small and medium businesses
The survey also found that “increasing sales” (39 percent) and “improving customer service” (30 percent) as the most popular reasons for undertaking app creation for small businesses, but when localizing the study’s scope to SMBs that created apps in 2016, the numbers switch to 34 percent and 36 percent, respectively, indicating that motivations are changing both for younger small business owners and those newer to the enterprise.

The shift is a product of the increased amount of small businesses entering the mobile app market, which has fueled an increased concern with creating value for app users, according to Cameron Banga, Project Manager and Co-Founder of 9magnets, a mobile app development company.

“As time goes on, businesses are finding that just having an app isn’t necessarily doing a lot of great work to their bottom line. People won’t just go download your app because your business has an app,” Banga said. “I think these businesses are finding that having an app doesn’t increase sales, but the customer service experience on mobile is definitely increasing customer satisfaction.”

App market
The report also found that SMBs tend to favor features that increase ROI, such as social integration (20 percent), mobile payments integration (19 percent) and customer loyalty programs (13 percent).

Despite their lack of scale, SMBs can still take a few cues from the largest of companies in how to implement mobile apps, and possibly even ecommerce down the road. Walmart, a company that has had a banner 2016 in shifting resources to ecommerce, recently updated its mobile application with a host of new features designed to streamline the services of two major areas: the pharmacy and financial services (see story).

SMBs are smart to switch to mobile payments at this stage in the game, but their time to implement successfully could be shorter than previously thought: a recent report from Forrester claims that mobile payments volume in the US is expected to total $112 billion in 2016 and grow at 20 percent compound annual growth rate until it reaches $282 billion by 2021, meaning that even SMBs will have to shift a great amount of resources to digital payments technology, and soon (see story).

“I think we will continue to see more SMBs adopting mobile apps over the next five years,” Mr. Kemper said. “While it is hard to imagine that the pace of adoption we found (50 percent over the next year) will sustain, apps are becoming easier and cheaper to develop.

“Low-code platforms and other app development tools are beginning to populate the market that allow businesses of all sizes to create a mobile app with relative ease and without advanced knowledge of the technology behind it.”