SA’s app economy is more than fun and games

When cell phones were first introduced to South Africa 20 years ago, the focus was almost entirely on the networks themselves.
There were huge debates over rates, coverage, signal strength and benefits. It didn’t take long for the networks to become little more than tiny logos in the top right hand corner of the actual device.

The quality gap between phones began to widen and consumer attention shifted towards the hardware itself. The ability to take and send grainy photographs or pixelated birthday messages was nothing short of revolutionary to us, not to mention the new trend of being able to accessorize or download a tinny ringtone that personalized your phone.

Nowadays, the quality gap is closing and the devices are possibly less important than the actual content on your phone. We are rarely amazed at gadgets – we want to know what they can do for us. This is the era of the app. A mere click allows you to download an application that will tell you the weather, calculate your worth in cows for lobola negotiations, warn you about Eskom blackouts or sell your unused furniture for cash. It may seem to be little more than fun and games, but there are significant economic implications for every app owner, retailer or user.

“According to Deloitte Research 60% of shoppers use their smartphones in store,” says Johan Nel, CEO of Gumtree South Africa.

Gumtree has recently ranked among the top ten most downloaded free apps available in South Africa.

“The conversion rate in store for shoppers with the store’s dedicated app installed on their device is 21% higher than those you don’t. This is significant for retail, but a growing number of consumers prefer to use apps to interact with diverse industries – ranging from banks and healthcare, to travel, energy and local government. Businesses have to be app-savvy if they want to reach customers.”

Nel says that there are key factors every business should consider when creating and launching their own apps.

“Your app has to be deceptively simple. Mobile customers are logging on because they want to find out more, or do something with the click of a button. That doesn’t mean that there shouldn’t be layers to the app that will draw them deeper into the site,” says Nel.

“A single interaction can trigger up to a hundred different interactions, which is known as the Starburst effect. That means that you can potentially say a hundred different things to a captive browser. The trick is to ensure that every one of the one hundred interactions are simple to complete and opt in and out of – you can’t force information on someone.”

A third of mobile consumers say they will abandon a purchase and move to the next vendor if the app lags for more than a minute. “A minute is actually quite gracious,” says Nel. “Realistically, if there are competitors that offer the same service or product, you have seconds to impress. Make sure that you are catering for an impatient audience.”

Nel says it’s significant as smartphone uptake is expected to grow dramatically as the cost of data decreases. “Research has shown that smartphone use for store-related shopping increases by 40 percent after the first six months of device ownership. Once consumers start to use the device in a certain store, they tend to consistently use it for more than 50% of their shopping purchases. Apps allow you to build loyalty over the long term.”

Nel says Gumtree has invested significantly in their app offering and believes the rapid adoption of the app is due to the design and treatment thereof. “Emphasis on convenience and utility is key. A good business app shouldn’t be a brand builder or an entertainer, but something truly useful. User experience has to trump everything else when it comes to mobile and we’re reaping the rewards of that. Always focus on building something useful, fast and simple.”

Nel says that no business can afford to ignore the app economy. “When it comes to apps, it’s best to come in early and to come in well-prepared. Partner with top mobile apps when advertising, include apps in your brand messaging – before someone else persuades them to shop.”

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