When you’re thinking about building an app you’ve got to consider how you’re going to get it out to your clients, whether they’ll download it and what competition it will face in the various App Stores. Using the latest research and data from App Annie we’ve collated a list of the 10 App Store Trends to consider when you’re building an app.
For the last couple of years, like many in the app industry, I’ve looked to App Annie for news about mobile technology. In particular, I’ve kept an eye on their famed State of Mobile report. During the height of the first set of nationwide lockdowns App Annie released some interim stats on how our mobile behaviour had changed.
Their latest data reveals just how much 2020 disrupted our usual behaviours and how our mobiles became increasingly central to our lives.
But that’s not what I’m going to be talking to my clients about…
We’ll get this out of the way first. App Annie is a business. So whilst this is powerful data, you’ve got to ask why they are giving it away. It’s marketing. Lead generation. PR. A bit like Brewdog letting everyone in the UK claim a free pack of beer whilst harvesting customer contact details.
Yep, App Annie has our email address now and are welcome to endlessly spam us about how brilliant they are etc. The value of their report makes it a worthwhile tradeoff. Though we prefer free beer.
The trouble with App Annie and their insights is that they don’t tend to bash the industry. I mean that’s not a great business strategy is it? Obviously they won’t reveal where apps have struggled or lost ground. Particularly if any of the brands impacted are also their clients.
So they are inclined to present a rosy picture. Scratch that. It’s almost utopian. But read between the lines and there’s some juicy detail knocking about.
Here’s the hard truth that I’ll be telling my clients about the state of mobile… and the 10 App Store trends to consider when they ask us to build their app.
1. We’re spending more money in apps. So why are we downloading fewer?
Don’t get caught up in the big headline spending figure. Ok we spent $143 billion on (and in) apps. That is huge, and a 20% YOY increase is nothing to be sniffed at. That said, we’ve been getting towards those numbers over the last couple of years anyway. Yes there has been a sudden jump over the last 12 months, but the fact we’ve been stuck in our lounge for the best part of a year.
Look closer. We’ve spent a lot more… but haven’t downloaded that many more apps. Our spend is going through the usual channels. It’s not being spread around more evenly.
2. Venture Capital is pouring in. For now.
VC is a dangerous beast. Some founders and start-ups treat angel investment like it’s the be-all and end-all of their business plan. Don’t get me wrong. In theory there’s nothing wrong with VC. They pay wages and can help a business grow. FAST.
Over the last 12 months investment figures have been clocking in at $73 billion. More than half of the total revenue made by apps in the year.
That’s a lot of eggs in one basket. Now There’s no detailed breakdown in where that money has been spent, but it is up a quarter on the previous year. Looking at the investments that have won airtime recently, a fair amount of VC looks to have been stacked on start-ups or businesses in their growth phase. A whole bunch of which are a long way from being profitable. Or might never be profitable.
This JUST ‘ain’t a sustainable model.
Fingers will be burnt. If your dream is to launch an app startup, attract VC, burn through it on marketing, growth hacking, tacos and pool tables in your fancy offices — have fun. Next time you go back to the market cap in hand, you might find those taps tightening.
3. Discovery will kill your app
If you’re launching a B2C app, it might not matter how brilliant your idea is or how unique and innovative your app is.
If you build it they might not come.
There are a lot of apps out there already. So if you don’t have an established audience already you’ve got to be prepared to spend to build one.
Check out that quote from the MANAGING DIRECTOR OF APPS at Google.
…apps should focus on influencing user discovery. 37% of app users we surveyed reported they found a new app through a friend or family member… and 50% only consider well-known apps. Cohesive brand and reputation, combined with a seamlessly connected user experience, continues to drive new user acquisition in an increasingly competitive market.
Half of app users will only use recognised, branded apps. Nearly 40% discover apps by word of mouth. Doesn’t leave much room for manoeuvre does it?
When the ultimate champion of apps at Google admits that it’s an increasingly competitive market you know things are tough.
Let me translate for you. What’s actually being said is that even with a shit-hot brilliant app that customers will LOVE, you also need a great reputation and brand awareness (aka marketing spend) to stand a chance of getting customers using your app. And even if you do… it’s still massively difficult, because of how competitive the market is.
That’s why my company rarely works with revenue-share models. Unless you have some serious marketing budget behind your app (and a shit-hot marketing team or digital agency spending that budget really f*cking wisely) scaling is going to be a huge challenge with the market the way it is now.
Sure we’ll build you an app based on future earnings. Provided you’ll be spending £1 million a year on building your audience.
4. 2020 saw unprecedented growth. It’s a blip. Yes — a massive fucking blip. Still a blip.
Who knows what the (urgh) ‘new normal’ will look like. One thing is obvious, the growth in apps in 2020 was driven by the pandemic. Should the threat from the virus start to dissipate then that growth will most likely prove to be a one-off (hopefully) event-driven spike. It’s catapulted us to where we would have organically arrived in 2–3 years and will inevitably boost some audiences with some long tail sustenance.
If your business model expects this rate of growth over a longer period… you’re risking a lot on one roll of the dice.
In fact my team reckons (crystal ball time now) that if things return to normal sooner rather than later, we could actually see an app ‘recession’ as our audiences embrace the things that they’ve missed out on. More restaurant visits. Theatre. Cinema. Hanging out with other people.
You know. The fun stuff we took for granted until we couldn’t do it anymore. Expect the mother of all digital detox campaigns.
After all, are we really still going to be running weekly zoom quizzes on Friday evenings once the pubs reopen?
5. Your app won’t make you a billionaire. Or even a millionaire
Of course App Annie paints a sexy picture. 25% more app publishers made more than $2 million per annum. WOW! That’s brilliant. Right? Apps are the new oil. I’m gonna make a fortune. Move over Musky. See you at the golf club Jeff.
Look closer. 97% of app publishers earn less than $1 million.
App Annie does a cunning bait and switch at this point and big this up as an opportunity to hop on the Small Business Program that Apple have finally rolled out. Great stuff. Now you can halve the commission you pay them… What App Annie glosses over is that 93% of iOS publishers earn less than $100k a year.
And they don’t drill down any further because the revenue returns will drop off spectacularly.
The picture gets even worse when you realise that the 7% raking in piles of cash could include multiple apps from the same company or conglomerate.
The odds are not in your favour.
6. Us Brits aren’t early adopters. And we’re really obsessed with the weather.
Given the (relatively) low download rate growth this wasn’t completely surprising. The App Annie breakdown of apps most likely to be used divided by demographic in the UK is… well to be polite it’s pretty conservative. Gen X/Baby Boomers list not one but two weather apps in their top five most used apps. Along with the BBC news app and BBC Sounds. And Adobe reader. Then you have millenials rocking the Halifax app and PayPal? Ouch.
We’re a tough market to crack.
Perhaps slightly more surprising to note, given the huge profits being reported by online stores buoyed by the pandemic, is that the UK lags behind some of our European rivals when it comes to shopping and spending money using our mobiles. We even lag behind Germany, which is somewhat mind-boggling given the German affinity for cold hard cash. I’m yet to find a small independent coffee shop in Berlin that takes credit cards (ok, slight exaggeration there, but you get my point).
What does that mean for app clients? You simply HAVE to make it as painless as possible for people to buy using their mobile. That means you’ve got to offer multiple payment options. Paypal. Google Pay. Apple Pay. And guest checkout. For the love of all that is good. Offer guest checkout.
Oh and if your plan is to conquer London first and then roll out across the rest of the country… DON’T! Everyone tries that. London is like a new country launch. Yes it is a huge opportunity. But if you want to dodge that noise, why not look outside the M25 first. London is not going anywhere.
7. The Fintech bubble will continue to grow. But regulatory worries could start to bite.
Fintech has been the buzzword in start-up circles for a couple of years now. It’s attracted a good wodge of VC investment. We’ve even seen some start-ups in other industries, particularly within the sharing economy reposition themselves as fintech. And after a year where we actually had the time of our hands to really dig into our investments (or lack thereof) and couldn’t get to the bank, fintech apps have come into their own. The recent furore over Robinhood and Gamestop has thrust investment and stocks apps into the limelight, but challenger and mobile banks continue to gobble up market share from the traditional high street banks.
That said, dark clouds may be on the horizon. A couple of recent acquisitions of fintech start-ups by legacy banks have fallen through on the back of regulatory issues. Will that start to squeeze investor confidence?
8. Tiktok is here to stay
Whatever the dayglow ex-game show host says. It’s too big to fail. And the old boys club (Christ… is Facebook in the old boys club now?) can’t keep up. No matter what they add to Instagram.
9. You want a slice of that food delivery pie? Tough. You can’t have one.
In just the first couple of weeks of the year we’ve already had a dozen clients approach us about developing a food delivery app. We’ve turned them all down. If your sole USP is that you charge a lower commission than JustEat or Deliveroo you’re not going to be able to compete with the established players. Sure you might be up a few clients and a handful of customers. But you’re not going to crack market dominance. And we’re not going to build you an app to try.
Actually, that’s not strictly true. JustEat spent €153 million on advertising in 2019. So if your marketing budget is in that ballpark, then we’ll build you an app.
Look, I get that the last year must have been unbelievably tough for business owners in the hospitality industry. The likes of JustEat swooping in when you were forced to close your doors and then gobbling up a fair whack of your profits will have hurt like hell. What we explain to our potential clients is that the commission food delivery apps charge is essentially their advertising fee.
They aren’t in the business of delivery food per se. They are in the business of finding customers who might want to have some delicious curry arrive at their doorstep. It comes back to discoverability.
That same discoverability that I said would kill your B2C app. JustEat, Deliveroo, UberEats can pay for that discoverability. You can’t. Sorry.
10. Local experiences and travel will guide us into the new normal
This one is all from me.
We want to pack our bags and head off to a warm beach somewhere. But the route out of this pandemic will mean that exotic jet-set holidays are off the menu for a little bit longer.
That leaves a gap in the market for niche, hyper-local app products designed to allow people a new way to engage with their local surroundings or communities. One of the few silver linings to 2020 was that we all got to spend more time in our local area. Exploring parts of our towns and cities we’ve never bothered to explore before and gaining a stronger sense of civic pride in those areas.
We’re already working on an app that will provide a touch-free, contact-free tourism experience in the town our head office is in. An app that will help support local businesses and provide insights into the less travelled parts of our town.
Surely similar walking tours, outdoor exploration and experience apps will follow. Just look at how strongly geo-caching apps have performed over the last year.
Whatever the app world looks like in a year we’ll still be plugging away building apps for brilliant businesses.
Thom Gibbons is the CEO of Apptaura. That’s us. This article was originally posted on Thom’s Medium account in January 2020. For more up-to-date articles on app development, managing an app development agency and the digital trends shaping our society, check out his account.