60 Billion Dollar App Industry

I’m sure by now you’ve all heard the trumpets sounding, seen the firework displays, and felt the thundering of a million hands clapping - yes, 2017 was a big year for apps. Global app revenue, in the app stores alone, rose 35% over the year to get very close to the $60 billion mark. To be a little more precise, the combined revenue of Google Play and the App Store was $58.7 billion. That’s a lot of money. That’s 5.87 trillion penny candies. That’s $7.72 for every single person on the planet. And while an estimated 82 per cent of all app revenue is eaten up by the remarkable games industry, 2017 was nonetheless a massive year for other industries on mobile. And this is just business through the app stores - huge amounts of revenue goes direct to retailers and businesses via apps, but not through the app stores themselves.

There are no signs of this growth slowing down just yet either. In fact, it is quite the opposite. Pretty much everything we do is moving to mobile, from banking and entertainment to shopping for clothes and booking a vacation. The move to mobile, and therefore apps, is not just overtaking other channels, it is confining some of them to minor roles which previously would have been unthinkable. For example, one of customers, a large European bank, has more visitors in one minute to their app than they get in their entire branch network in a week.

Digital media streaming services have also been growing particularly quickly. For example, Hulu saw a 40 per cent increase in subscribers in 2017, to reach 17 million. HBO and Showtime are household names that continue to grow on mobile. And if you take a look at the top grossing apps that aren’t games, it’s a list dominated by media streaming services like Spotify, Pandora and Netflix. This is partly enabled by the key to profitability: auto-renewable subscriptions. Once users have developed a reliance on your app, and enough confidence in your service to convert from a free-trial to a premium account, the dollars start rolling in. Just as importantly, they provide a fantastic cross-channel experience.

Here Comes The “So What” Bit

The growing momentum behind the mobile world undoubtedly presents huge opportunities for businesses. Perhaps what is most important to remember is this: when individuals switch channel they are also likely to switch brand. Consider the move from ‘bricks and mortar’ retail to online commerce. That claimed a few notable scalps as new competitors native to the emerging online environment picked off the customers of existing brand leaders slow to respond to a new reality. 

Remember - the competition for your brand’s mobile experience isn’t your website or store - it’s a competitor’s mobile app that delivers the products or services you do in a ‘mobile first’ way.

The same is happening on mobile today. Yes, it can be difficult to transfer your services to mobile successfully. But it is imperative to make the app as easy as possible to use for the ‘mobile’ generation, and integrate it with other experiences and channels of your brand. Remember - the competition for your brand’s mobile experience isn’t your website or store - it’s a competitor’s mobile app that delivers the products or services you do in a ‘mobile first’ way.

If your app appears as an afterthought, an isolated and unloved creation to simply tick a box, then your business will suffer. However, if you think in terms of providing a first-class mobile experience, when it comes to your products and services, then you stand a chance of succeeding - and taking your fair share of all those mobile millions.

That involves a commitment to investing in mobile, making it the centerpiece of a cross-channel strategy that can engage customers at an individual level, with personalized, relevant and timely interactions that creates a compelling reason for customers to stay with you during and after the migration into the new environment. Good luck!