Friday, October 12, 2012

Small-Business Guide: Small Companies Seek to Push Sales and Marketing With Own Apps

Ms. Gurock deployed an app that allowed in-store customers to bypass the cash registers and check out their purchases themselves, on their mobile devices. Magic Beans got the app at no charge by working with its creator and agreeing to be a retail testing ground.

The app also allowed customers to scan a bar code to get product information, descriptions and reviews that had previously been available only to customers shopping online. When a customer bought an item using AisleBuyer, the app would automatically recommend two related products in the store and offer discounts and coupons. That resulted in an 8 percent increase in sales to those who used the app, Ms. Gurock said.

But the app has been used by just 5 percent of customers, Ms. Gurock said. Although she contends mobile self-checkout represents the future of retail, Magic Beans, which has five stores in the Boston area and 50 employees, was “very early to the party,” she said. “This app was on a mission to change 100 years of shopping habits, where the in-store experience is bringing your items to a cashier.”

As a result, she said Magic Beans was phasing out AisleBuyer, but she expected to try again — and with good reason. By the end of this year, according to the digital marketing firm eMarketer, there will be 116 million smartphone users in the United States.

At that point, reports Cisco, the number of mobile-connected devices globally will exceed the number of people. That is a large and expanding canvas for apps when consumers have come to expect one for almost everything, said Noah Elkin, an analyst with eMarketer. “It’s getting to the point where apps are similar to search,” he said. “If you don’t get any results for a brand, that brand doesn’t exist.”

That puts growing pressure on small businesses to create and publish their own apps. This guide looks at the experiences of several companies that have tried.

BUILDING IT: THE BASICS There are essentially two kinds of apps. Native apps are written for specific operating systems — Apple’s iOS, for example, or Google’s Android — and are installed directly on a device. They are available through online stores like iTunes or Google Play. Mobile Web apps run on a device’s Web browser — and because of that can be slower — but they work on a variety of systems. There is no app store for the mobile Web so those apps can be harder for consumers to find.

Small businesses can build native and mobile Web apps using do-it-yourself tools or by hiring a developer to custom-design one. Tiggzi, a development platform made by Exadel, offers drag-and-drop tools for building apps and integrates services like Facebook and OpenTable.

Titanium from Appcelerator does not require developers to have deep programming experience, but they do need to know JavaScript, HTML or CSS. EachScape, which also uses drag-and-drop tools, lets users build and manage apps that are delivered to a device as a native app.

Most platforms allow the builder to add features like push notifications (alerts that can announce sales, for example) and the ability to connect to social networks.

The cost depends on the scope and complexity of the app, Mr. Elkin said. For example, using Tiggzi, which is a cloud-based subscription service, the cost ranges from free for one app to $50 a month for 50. Custom designing an app can cost several thousand dollars.

MARKETING TOOL PrimeGenesis, an executive consulting firm in Stamford, Conn., created an iPad app last year to encourage users to buy the firm’s book, “The New Leader’s 100-Day Action Plan,” written by three of the company’s founders.

The firm has 13 partners and about $2 million in annual revenue, and it used Mobile Distortion, an app developer in San Diego. The app, which cost about $35,000, provides executives entering a new company with an interactive, mobile template for creating and carrying out a 100-day action plan.

PrimeGenesis sells the full app for $9.99 (a basic version is free), but George Bradt, managing director, says the firm measures the app’s success by the number of clients it produces. “The app is there to drive people to the book, which markets our firm,” he said.

Each new client it attracts represents about $50,000 in revenue. “If we sell 10,000 books a year and convert five buyers into consulting assignments,” Mr. Bradt said, “that’s a quarter of a million dollars.”

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