Consumer spending on mobile apps: 5 takeaways for enterprises
Smartphone users love their apps, and if consumer spending is any indication, that interest won’t fizzle out anytime soon. In fact, mobile app downloads and purchases continue growing year over year.
In 2017, US iPhone users spent 23 percent more on in-app purchases than they did in 2016, according to new data from app store intelligence firm Sensor Tower, as reported by TechCrunch. On average, active users spent $58 in 2017, up from $47 in 2016. They also installed four more apps in 2017 than they did in 2016.
The growing app economy
During the first quarter of 2018, the app economy grew even more, shattering the previous year’s records for both consumer spending and mobile app downloads. Global iOS and Google Play downloads reached 27.5 billion, the highest of any quarter, according to AppAnnie. Meanwhile, combined consumer spending grew 22 percent year over year to $18.4 billion. That’s just for paid apps and in-app purchases — it doesn’t even include revenue from third-party Android stores, m-commerce or in-app advertising.
The majority of this spending was on consumer-facing apps, such as games, streaming services and dating and lifestyle apps. But companies can learn much about enterprise application development from these trends.
What are the most popular categories of mobile app purchases? Which features and qualities make mobile apps worth buying? And how can enterprises replicate these experiences to develop creative apps that will attract users?
Consumer apps users pay for
According to Sensor Tower’s data on in-app purchasing, games accounted for 62 percent of App Store consumer spending in 2017. This makes sense, considering that gaming apps typically enable users to spend real-world money on a variety of virtual goods. The longer someone plays a game — and the more they want to win — the more money they spend.
However, games aren’t the only app-based entertainment that consumers are now purchasing en masse. In-app spending on video streaming services such as Netflix and Hulu grew 57 percent from 2016 to 2017, reaching $4.40 per iOS device, while music streaming apps brought in about $4.10 per device.
Music and entertainment apps gained popularity with Android users as well. According to AppAnnie’s data, this category experienced the largest market share growth on Google Play last year and in the first quarter of 2018.
Consumers also spent more for social connections. Lifestyle and dating apps grew 110 percent from 2016 to 2017, and spending in social media apps was up by 38 percent, according to the Sensor Tower research.
What consumer spending means for enterprise app development
Enterprise mobile apps have decidedly different purposes from most consumer apps, but they do share one common goal: to provide an engaging and rewarding experience that keeps users coming back. What can enterprises learn from popular consumer apps about delivering that experience?
1. Make it customizable. Consumers spend money on streaming apps so they can consume the music and videos they want when they want. Customization is also key for gaming apps. For example, this year’s breakthrough game, “Fortnite: Battle Royale,” is free to play, but users can pay to unlock personalization features such as character costumes and weapon skins. These features are so popular that the game made more money in February than did rival game “PlayerUnknown’s Battlegrounds,” which is a paid app.
2. Deliver personal rewards. If people are expected to use an enterprise app on their personal phones or during their personal time, they need a compelling reason to do so. With consumer apps, those reasons often come down to entertainment or emotional connections, which might not always make sense for enterprise apps. However, there are other types of personal rewards that enterprise apps can help to deliver — for example, productivity features that contribute to better work-life balance or collaboration features that boost social connections at work (a particularly important feature for roving or virtual workforces).
3. Incorporate social elements. Competition, communication and collaboration are at the heart of what makes most consumer apps so engaging — which is convenient, considering those things are also key for businesses. Enterprises might not be interested in launching games or new social networks, but there are other opportunities to make apps more social — for example, gamifying training or processes to spur friendly competition, or adding collaboration tools that make it easy for teams to share information on the fly.
4. Add original video content. According to AppAnnie, video streaming apps are gaining ground quickly, despite fierce competition in the industry. To differentiate themselves from competitors, Netflix, Hulu, Amazon Video and other streaming services are building buzz (and winning awards) with exclusive original content. Enterprises don’t have to make their own TV shows or movies (though they certainly can). Training videos, self-help IT videos, product tutorials and other original content can also make enterprise apps more engaging.
5. Prioritize the user experience. Enterprise app users are also consumer app users, which means they know the difference between a great app and a mediocre one. They’re accustomed to seamless, personalized and rewarding app experiences, and they’re willing to pay for them. For business, they might have less choice about which apps to use, but they’re still more likely to engage with apps that are actually engaging.
Enterprises can learn much from consumer app trends about building their own apps and ensuring that they provide an engaging user experience — and the willingness to absorb that information can and will make all the difference toward producing apps that become widely adopted.