Why aren't retailer apps cutting it with millennials?

By Matthew Stern, RetailWire

The following appears courtesy of RetailWire, an online discussion forum for the retail industry.

Despite nearly complete saturation when it comes to smartphone use, millennials have been slow to adopt shopping apps. New studies on millennial shopping habits and app adoption suggest the solution may lie in crafting programs suited to the generation's unique shopping habits.

A study by Forrester Consulting, commissioned by RetailMeNot, found that while 84 percent of consumers use their smartphones while in stores, they are not making use of retailer apps.

"Of the U.S. consumers surveyed who have used a mobile phone in the last three months to perform a retail-related activity, 60 percent have two or fewer retailer apps on their phones, and 21 percent do not have any." Over half of those who responded said they use retailer apps once a month or less, and more often than not, they use smartphone Web browsers to redeem coupons in-store rather than an app.

The tendency of millennials to redeem coupons through smartphone browsers instead of through apps is in keeping with the picture painted by a report titled "Food Shopping in America" by MSLGROUP and The Hartman Group, which calls spontaneity a prime driver for millennials, along with uniqueness and budget constraints.

The report further states that personal recommendations from friends and a unique mix of choices in the basket tend to be big drivers of millennial purchasing.

So a no-frills app that asks very little from a user and offers deals that play off of a desire for a spontaneous, surprising and money-saving experience could be an app that a millennial would be more likely to install.

On the other hand, despite the industry's desire to push app adoption, millennials' affinity for using smartphone browsers may indicate that dedicating resources to a good old-fashioned mobile Web presence—and innovating along those lines—is the way the grab the millennial customer's mercurial attention.

Discussion Questions: What will it take to get otherwise uninterested millennials to install and use retailer apps? Are retailers better served focusing on promotions that can be accessed through a browser rather than an app?

Comments from the RetailWire BrainTrust:

It's all a question of value—especially when it comes to time and choice.

In all the research I've seen, people download a lot of apps but only use about five! Millennials may use up to seven frequently. So in order for a retailer to break in to the inner circle of apps used 80 percent of the time, that app has to hold a lot of "value" in what it offers the user in terms of time saved, discounts, etc.

Millennials like empowerment and choice. Mobile search enables far more choice and selection than any retailer-specific app.

The retailers' takeaway from all this research would seem to be to optimize websites for mobile before spending any money on an app. And if there are any additional resources, spend them on first class SEO so that every consumer can easily find your brand, products and services.

It's far more important and profitable to be on the top of the mobile search page one list than to be one of the top five apps on millennials' phones.
-Chris Petersen, Ph.D., President, Integrated Marketing Solutions

I am not sure launching an app inside the store really gives me any benefits to the shopping experience unless there are tools that I can't get anywhere else. The other problem is that I find the login procedure to be very cumbersome in mobile retail apps, and by the time I get logged in, it sucks up shopping time. If I am not saving time while I am in the store, why would I download and install a retail app? I do use the Amazon.com app, that's different because it is a shopping experience in an app.
-Kenneth Leung, Director of Enterprise Industry Marketing, Avaya

I think the question should be "What do millennials want/need from retailers?" instead of thinking about altering their already imbedded behaviors. It doesn't make sense even as a Boomer to have to download and keep checking multiple retail apps to take advantage of promotions across the retail landscape. That's just too time intensive and consumers are seeking time savings. This problem needs to be turned inside-out and reframed.
-Anne Howe, Senior Vice President, Shopper Solutions, part of Acosta Mosaic Group

As a group, most first-generation retail apps were self-serving and did not provide consistent value to the customer. The branding of retailer apps as less than useful is a problem that is going to be a challenge to retailers who have created beneficial apps. Besides, with mobile Web access so easy, the browser route is probably the route to take for future development.
-Larry Negrich, Vice President, Marketing, nGage Labs

Downloading and managing so many apps on the phone is a painful task and unless the apps offer any unique utility, customers, not just millennials, will be wary of downloading the apps. Someone downloading the app again does not mean they are loyal, they probably have downloaded other retailers' apps too. Retailers need to focus on basics—who they want to target, what is their preferred means of communication, and what should retailers' value proposition be for that customer segment.
-Shilpa Rao, Practice Head, Merchandising, Tata Consultancy Services

Millennials are so comfortable using small screens to explore new products that an app must provide some sort of incremental value to earn a place on the phone or tablet with this segment. In addition, many millennials have filled their phones with pictures and videos, and do not have much room available for the incremental app.

Social is one way to succeed—share recommendations among friends and engage using Snapchat and Instagram-like capabilities.
-Mark Price, Managing Partner, LiftPoint Consulting

Compelling promotions are key, as opposed to just loading one more app on your phone. Aggregated apps for multi-merchant sites are the best way for retailers to capture their audience's attention.
-Ralph Jacobson, Global Retail Industry Analytics Marketing Executive, IBM

Read the entire RetailWire discussion.