How apps are helping businesses keep up with evolving consumer demand

For online enterprises everywhere, business is booming. With bricks and mortar stores and high streets around the UK in somewhat of a hiatus as they transform into more appealing prospects for shoppers, consumers are spending more online and are increasingly comfortable with doing so. With this comfort comes a greater level of understanding and expertise among consumers. Generation Z and Millennial consumers, in particular, know what they want and they know how to use technology to help them find it.

The real challenge of online businesses is to keep up with the fast-evolving consumer demand for tools, usually in the form of apps, to help them get the best online consumer experience possible. Buying an app company that owns the IP for an app-based tool that can enhance customer experience is an increasingly popular solution for many business owners who want to keep up with the competition. User experience is an important factor to consider, and if a small app-based business is offering something special from a UX perspective, acquiring that small business can be a smart move.

Deloitte’s recent E-commerce M&A Review talked about this trend in detail, stating: “Compared to developing a proprietary solution in-house, acquiring or investing in target companies with a proven solution to improve customer experience is often a more efficient way to achieve strategic objectives.”

Ecommerce app market booming

A particular growth area for app developers is mobile ecommerce. While it’s a given that ecommerce is on the up for now, the rise in mobile ecommerce is a more recent trend. The pandemic obviously accelerated ecommerce’s rise, with only 21 per cent of sales happening online in 2019, increasing to more than 30 per cent in 2020. This one-year rise was given a huge boost by the lockdowns that blighted the UK high street throughout the year.

Statista has reported that a third of all ecommerce sales in the UK took place via a mobile phone in 2019. Mobile ecommerce sales, meanwhile, are expected to rise to value of £100bn by 2024, so this is undoubtedly a growth area that all businesses should be preparing for.

Many ecommerce business-owners are making the decision to build or acquire apps that help them to meet emerging customer expectations with regards to mobile ecommerce.

A good proportion of the most cutting-edge new ecommerce apps use technology such as AI, AR and machine learning to provide consumers with incredible retail experiences, never experienced before. With Ikea’s Place app you see what their furniture would look like in your own home without ever having to purchase a thing. Meanwhile, former executives from Wish.com and TikTok have teamed up to develop OOOOOO, an app company that enables live streaming from ecommerce retailers who have sold thousands of pounds worth of merchandise through live streaming shows only minutes long.

And it’s not just in ecommerce where apps are taking over

There are several other industries that are seeing massive growth in app use, including business services, communication and delivery. Business owners in most industries are now considering how to improve customer experience with the addition of app-based technology.

Statistics from App Annie found that the second quarter of 2020 was a record quarter for app usage. Some 70 billion hours per week were spent by people around the world using apps on their mobile phones, and with smartphone usage only expected to increase (and there were already 3.5bn users last year), this figure will rise.

Recent app deals - Case studies

In retail

Although apps are big business in the ecommerce industry, they are also useful for all kinds of retail industries, including traditional field sales businesses. In February this year, South Africa-based field sales management platform Skynamo, announced its purchase of UK-based mSeller to help it grow its market share in the UK where the mSeller app is popular among field sales teams.

Sam Clarke, Skynamo’s CEO, explained: “By merging the best features of mSeller into Skynamo, we’ll be able to offer the global market a truly holistic order management and digital catalogue experience for field sales reps and their customers.”

In delivery

Delivery is another area where apps are big business and recent news of an impending deal reflects this. US-based grocery delivery firm GoPuff, is reportedly considering taking over UK-based app business Fancy Delivery. Although the deal isn’t finalised yet, if it goes ahead, GoPuff would be able to bring its delivery service, offering fast convenient hyper-local delivery of items like alcohol, newspapers and groceries to the UK. The two app businesses are already considered to be aligned in terms of their business model. So integration would not be an issue for either party.

In a similar move, UK based delivery app-based tools Dija and Genie have also entered into a deal that will see Genie help Cambridge-based Dija expand its reach through London.

And elsewhere...
YouGov, the large UK-based data analytics firm, has just announced its purchase of an open banking app-based start-up called LeanApp. The three-year earn-out deal will see YouGov able to use the financial data collected by LeanApp across the UK and the US to enhance its products. The deal also involves four senior members of the LeanApp team, founders Luke Dugdale, Artur Jurgenson,Tom Stuart and Maz Lascombe. Move to YouGov.

YouGov CEO Stephen Shakespeare explained that the addition of LeanApp will help it to provide an improved service to its clients, but also to consumers further down the line. He said: “By helping our clients understand their audience’s full journey across their digital activities and connecting it to YouGov’s rich attitudinal data, YouGov is redefining the possibilities of connected customer data for both consumers and clients.”

Meanwhile, there are other more clearly consumer-led app buying decisions going ahead around the world as well. Snapchat, the social media giant, has recently purchased fashion app Screenshop. The app enables shoppers to upload a picture of a ‘look’ they like, and the app will find similar fashion finds for them to buy online or in store to recreate the look themselves.

The acquisition reflects the increasing consumer demand for combining shopping and social media. Snap launched its ecommerce tools in summer 2020 and has been enhancing its offering ever since. Snap revealed the acquisition in a statement, but will provide more insight into how it intends to use the acquisition to bolster its ecommerce arm later in the spring. It explained: "Snap plans to announce the eCommerce push at its annual developer conference in late May in the form of a new shopping recommendation feature that will mainly be accessible inside Memories, a section of Snapchat where users collect photos and videos to view later."

What to consider when buying an app business

When looking into buying an app business, there are a few fundamentals to consider.

You’ll need to understand how to track usage and performance
This is an essential part of running an app business - but luckily, there’s an app that tracks this for you!

You’ll need to think about the business model you will use
This will include considering factors like how you will optimise in-app purchase sales, downloads and other monetization tools.

You’ll have to have the skills onboard to deal with bugs
Purchasing an app comes with the responsibility to run that app, which is a highly skilled job, requiring a good tech team, or at least a dedicated individual who knows his/her stuff.

You’ll need to use SEO to optimise your app in the App Store
If you want to maximise downloads, adopting SEO methods to make sure your app is ranked well in the App Store and in the Google app store is crucial.

When it comes to purchasing an app, you can be confident that you’re investing in a growth industry. Whether you plan to run the app as a standalone business prospect, or integrate its technology into an existing online product or service, apps can be a good value proposition.

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