Retail iPhone apps: Mobile commerce on the move?

It started with an Oasis iPhone application last summer, and from there the trickle of other UK retailers launching similar technology has turned into a stream.

Now names including Ikea, Next, Warehouse, Mydeco and Barratts have all created software tools for consumers to download on to their mobile phones. So is this a significant move forwards for the long talked about development of mobile commerce?

One thing is for sure, a retailer can certainly create a buzz by launching an iPhone app.

Ikea UK launched its app at the beginning of December 2009, and between then and the end of January about 300,000 consumers downloaded it to their iPhones - about half of whom were in the UK. Oasis says there have been 50,000 downloads of its app so far and the development triumphed in the retail technology category at last week’s Oracle Retail Week Awards.

And Barratts is coinciding its release of an app with the reopening of its refurbished store on London’s Oxford Street. The first release of the Barratts app will allow users to search the retailer’s entire collection, and upload images of clothes to mix and match with shoes in a virtual changing room.

By the end of April it will expand on this, allowing users to click-and-collect items in stores, and integrating the mobile channel with Barratts new multichannel CRM system.

Ikea has started even more simply, but intends to build on the features of its app over time.

Jason Baker, who works in marketing and communications for Ikea UK, says: “We have got off to a great start. It does what it says on the tin. We wanted a beautiful version of the catalogue on an iPhone. We spent a lot of time making sure that the images and function of the thing were reproduced in an elegant way, and so it is easy to zoom and flip through the catalogue.”

Ikea always intended to start small and build on the features in the initial release, but wanted to get feedback from customers along the way to make sure that it was creating something that would be genuinely useful to them.

“We have had strong feedback, with about 5,700 ratings on Apple’s app store with an average rating of three [out of five],” says Baker. About 90 consumers have so far left full reviews of the app with comments. In addition, Ikea has been looking at the feedback on the app posted on Twitter.

Work in progress

Baker says that feedback has been as Ikea expected. Extra features customers want include search, bookmarks, store locator and stock checker. Ikea is on the cusp of releasing a second version of the app with the most logical of these additional features and will continue to innovate from there.

“It hasn’t been a high cost development. It is what it is - the catalogue. We never intended to create a mobile shopping app,” Baker says. “Probably the main purpose of the catalogue in general is to inspire people and to help them prepare their shop and to come to Ikea. We want to find greener ways of distributing the catalogue.” He hopes that customers are using the app in their homes, over coffee and when they are in a competitor’s store.

This idea of a phone app as a shopping companion is an interesting one. Retailers are already being warned that consumers are increasingly price checking and doing product research on their mobile phones while out and about.

Evidence of this comes from Alex Meisl, chairman of mobile agency Sponge. Sponge has done work with Auto Trader on its mobile services. The company handles two million searches a month from consumers’ mobile phones, and 40% of these are when they are actually on car dealers’ forecourts.

While the focus has been on the iPhone so far, the vast majority of consumers use a different handset and retailers are thinking about how they can start to engage them too. Barratts says that it will extend its app to other mobile platforms - such as BlackBerry and Google’s Android mobile operating system - later this year.

This is something Ikea also has on the horizon. “We looked at the market penetration of the iPhone. But the reality is that we need to find alternatives to the catalogue, so it was a worthwhile exercise for us to start exploring,” says Baker. The retailer is also thinking about what other mobile operating systems it could develop apps for, and says that it will be easy to port what has already been developed for the iPhone.

Oasis has already looked at how it can extend beyond iPhones and launched a fashion app on the Nokia platform that gives customers access to a store finder, allows them to shop and view the brand’s latest newsletters.

Oasis is also making use of Nokia’s Point & Find feature to run a competition in London to get customers using the app. If they load the software and then point their Nokia phone at the tube sign at Oxford Circus station they will begin a treasure hunt, which the company promises will reward them with a prize if they can complete the short trail.

Until now, much of the work in the mobile space has been to use it as a marketing, rather than a sales, channel.

Tapping into opportunity

Meisl says that there are still good opportunities here. Sponge worked with etailer and online service provider The Hut when it relaunched Zavvi online last year, and helped it to distribute more than 20,000 discount codes via text message, 80% of which were redeemed. Meisl says that this led to 10,000 new customers using the site and an estimated £150,000 in new revenue.

And the company works on behalf of several other big name retailers, helping them to collect and use customers’ mobile numbers to market to, as an addition to the email marketing channel.

Meisl thinks the iPhone app market will quickly become saturated, and retailers now need to think bigger - launching websites that are optimised for viewing on mobile phones to appeal to the 97% of users who don’t have an iPhone.

He says: “Too many retailers are approaching mobile with a degree of trepidation - but you don’t need to spend much to create a good mobile site. You could get a good quality site from £20,000 up to £150,000 - and we would encourage a degree of test and learn.”

However, whether you are thinking about a phone app or a full mobile website, the issue of whether the mobile phone market is yet offering the right packages to assist the development of mobile commerce still remains.

When it comes to creating a full mobile version of an ecommerce site Meisl warns: “The vast majority of UK mobile phone subscribers are not on unlimited data packages.”

The upshot of this is that consumers may not be aware of how much it is going to cost them to browse your site from a mobile, or use an app that pulls data in from the web.

All-in-all the next 12 months are going to prove very interesting as retailers start to report more fully on the results from their first forays into mobile. Not all of the ideas currently out there in the market will succeed. But retailers have to make the decision whether they want to keep up with consumer expectations and take small risks, or wait another couple of years and risk playing catch-up as many did with ecommerce.