Apps as part of Digital Transformation
The phenomenon of Digital Transformation is a process that consists of using technology to modify business models and the mode of operation of companies aiming to remain relevant, improve performance, increase reach and achieve better results.
The Digital Transformation of companies has impacted society, modifying the way people relate to each other, consume, work and exercise, among other day-to-day activities. In this context, smartphones and mobile apps have a crucial role, which could not be imagined in 2007, when Steve Jobs unveiled the iPhone, nor in 2008, with the launch of the App Store.
At that time, cellular networks were still migrating from Edge technology to 3G. Then, digital activities, such as creating and viewing documents, playing games and videos were left to devices like computers and videogame stations.
In the beginning of smartphones and mobile apps, the App Store offered only 500 apps, among which the most popular were games and apps that did not require connectivity. We also had services that are still very popular today and that, at the time, were taking their first steps, such as Facebook and Google Maps.
In 2008, the year in which the App Store was launched, among the most popular apps, we had PhoneSaber, which used the smartphone’s sensors to simulate a Lightsaber, famous from the Star Wars movie franchise. The app featured a Lightsaber on the mobile screen and, as the user moved the device like a sword, the phone’s sensors detected the movements and the app produced the characteristic sounds of a Lightsaber, as shown in the movies.
The main features of PhoneSaber used of the smartphone’s accelerometer, a sensor that measures the vibration or change in movement (acceleration) of the device. That means that the app used a feature of the device to bring entertainment to its user.
Therefore, PhoneSaber is an example of a popular app developed from the creative ability of developers that incorporated smartphones’ emerging technologies and applied them to users’ daily lives. Thus, the first apps explored possibilities with smartphones and enabled new interactions through technology.
In the time since the launch of PhoneSaber, the app market has changed a lot. Both App Store — the iOS app store — and Play Store — the Android app store — have already surpassed millions of available apps, as well as billions of downloads. It is important to note that the change has not only been in the amount of apps available for download, but, also, in the types of apps available.
In 2008, apps such as the PhoneSaber were among the most popular, because of their use of accelerometer sensors (a novelty of smartphones) in their functionality. Nowadays, app stores are dominated by streaming services, social networks, banks, shopping services, video creation/editing and games with very elaborate graphics. This change shows the technological evolution of smartphones and functional evolution of apps.
Therefore, the aspects that make a popular mobile app have changed since the creation of the first apps. Nowadays, it is necessary to consider not only possibilities related to smartphone functionality, but to the needs and behaviors of users. The changes brought by Digital Transformation affect how businesses relate to customers and offer their services and mobile products and apps have become an essential part of that relationship.
Play Store – 08/03/2020
For example, in August 2020, we have CAIXA and FGTS in the 1st and 2nd places on the list of most downloaded free applications in the Play Store. Both are financial apps — a banking app and the Brazilian Social Security Fund app, respectively. In the Most Profitable tab, we have Tinder, TikTok and Strava — social networking apps — and GloboPlay, HBO Go and DAZN — streaming apps — among the most popular. In addition, Americanas, Shopee and Casas Bahia, all online shopping apps, also appear among the most popular.
The presence of 2 financial services, 3 social media, 3 content and 3 shopping apps among the most popular apps shows us that traditional commerce, banking and media services as well as relationships are being impacted by the Digital Transformation phenomenon and have migrated to the digital space.
Globo (one of Brazil’s biggest free-to-air TV networks), for example, in order to maintain its relevance in the market and to be able to compete with Netflix — which has always been a digital service — had to leave its traditional model — centered exclusively on television — to invest in a digital experience with cross-platform apps (mobile phones, tablets, computers, smartvs): GloboPlay.
The same happens in the banking sector, with traditional Brazilian banks such as Caixa Econômica and Itaú modifying their businesses to fit in the digital environment, looking to remain relevant in a sector oxygenated by the birth of Brazilian digital fintechs such as Nubank and Neon.
The cases cited above show the relevance of digital services in our society. Currently, mobile apps are an important part of business strategy, adding value to first contact, sales, interaction and brand visibility to the market, customers and partners. In addition, they can also target companies themselves, with apps aimed at its employees.
However, the decision to create an app and what it should look like cannot be based solely on success stories. It needs to be based on the parameters we use to define Digital Transformation: relevance, improved performance, increased reach and better results.
Next, we will discuss some scenarios to consider in the decision to develop a mobile app.
Apps for internal use
Apps for internal use are aimed at employees of a company and can be distributed via internal channels or in virtual stores. When one thinks of an app for the use a company’s employees, the main gain is increasing business productivity, which comes mainly from the advantages of mobility that an app provides.
As an example of apps for internal use, we can cite apps used for issuing online purchase orders, used by sale representatives of the sales department of companies. This type of app speeds purchase order issuing, since the sale representatives does not have to wait until the end of the day to use their computer to transmit the orders. Thus, the app allows optimization of processes that will increase business profitability and generate more customer satisfaction, since they will be served faster.
Other possible examples are apps to monitor equipment and sensors used in factories. With apps on mobile devices, operators do not have to stay in fixed workstations in specific areas of the production line, for example, but can service multiple lines, monitoring them as they move through the factory floor.
However, regardless of its purpose, the adoption of a mobile app is only the tip of the iceberg. For productivity gains with mobile apps to be maximized, it is necessary that the company’s processes as well as computational and human resources keep up with this change, adopting a new digital strategy.
According to the 30th Annual Survey of Administration and Use of Information Technology in Companies (Pesquisa Anual de Administração e Uso de Tecnologia da Informação nas Empresas), conducted by Fundação Getúlio Vargas de São Paulo (FGV-SP), there are 230 million active cell phones in Brazil. According to IBGE (Instituto Brasileiro de Geografia e Estatística, the Brazilian Geography and Statistics Institute), Brazil has about 210 million inhabitants, which means that, currently, there are more mobile devices in use than citizens.
In another survey, in 2016, it was detected that the Brazilians spend, on average, four hours and forty-eight minutes a day using their mobile phones, one of the highest averages in the world.
Considering these facts, we see that mobile phones are a very important factor in people’s lives and that having an app installed on people’s smartphones is the most direct and effective means of accessing them.
The following describes how this direct and personal access to customers can benefit a company.
1. Sales increase
According to Criteo’s study on E-commerce worldwide, in 2017, 40% of purchases made in mobile devices used apps. The same study indicates that 22% of purchases made via desktop were preceded by searches on mobile devices. In another study, Criteo points out that smartphone sales grew 48% between the second quarter of 2017 and the second quarter of 2018.
In 2019, according to the e-BIT website, there was an increase of 60% in the number of orders made via mobile devices, representing a turnover of R$ 25.9 billion. In 2020, these numbers are even more expressive, due to the period of social distancing and quarantine caused by the New Coronavirus.
Magazine Luiza’s (one of Brazil’s biggest retailers) investor relations report for the 2nd quarter of 2020 indicates that Brazilian e-commerce grew 70.4%, while Magazine Luiza, driven by its digital transformation process, grew 2.6 x this amount, advancing an expressive 181.9% in the period.
This growth in the importance of smartphones in the sales process cannot be ignored by companies. More than technological advancement, we are living through changes in consumer habits, in which smartphones and apps have a central role. Thus, it is essential that companies position themselves in this new scenario.
2. Same experience, regardless of the channel
Omnichannel is the strategy of managing content across multiple channels with the aim of improving user experience. This strategy seeks to provide the same shopping experience in the many channels of the company (physical, website app etc.), as a response to a market in which customers make purchases in physical stores by consulting information on an app or website, via smartphone.
Omnichannel, for example, when coupled with smartphone geolocation capabilities and push notifications, allows physical store apps to deliver personalized content and a seamless app experience to the physical store and vice versa when users are walking around inside or near physical stores.
Currently, stores such as Maganize Luiza and Americanas (another Brazilian retailer) try to unify the shopping experience in physical and digital channels, allowing users to make purchases through the app and pick it up at the store, gaining agility and avoiding shipment costs.
3. New possibilities in offering and consuming
Some technologies embedded in smartphones, such as NFC (Near Field Communication) and Bluetooth, are only usable in native apps. NFC, for example, allows actions by approaching the smartphone on NFC readers, such as payment machines or authentication systems. Bluetooth, on the other hand, transmits content between devices up to 10m away from each other.
Thus, having an app is a point of distinction compared to the experience on a website or PWA (Progressive Web Application) — an app hosted on servers that uses browser resources to provide an experience similar to a native app, but without access to all of the features of the smartphone, which provide more and better experiences to users.
IKEA, a Swedish furniture company, uses augmented reality in its smartphone app so that consumers can “see” how the furniture would look in their homes. First, the user must scan the environment or room with the camera of the mobile device. The app, using augmented reality, detects reference points in the environment, creating a simulation of the room. After this mapping, the user can choose the piece of furniture to be placed in the virtual room, so that they can visualize how the furniture would look in the new environment.
Another example of changing the way we shop is Amazon Go, Amazon’s project to create no check-out stores. In those stores, the app on a smartphone is also the beginning of the journey in the innovative physical store. The consumer uses the store app as their credentials to access the store. There, they can select the products they want to buy and leave the store, without having to face queues at checkout.
Through technologies such as sensors, computer vision and machine learning, the store identifies the selected products and charges the store app, improving the speed and practicality of the shopping experience.
In these examples, we note that mobile apps are already protagonists in disruptive changes in the way consumers shop. The question that arises is: how can we generate new consumer experiences using smartphones and mobile apps?
4. Increased customer engagement and loyalty
Once a user decides to install and keep an app on their smartphone, a window of opportunity for relationships opens. Far beyond a one-way flow for consumers to express their complaints to the store, apps allow the store to present itself to customers in ways never before imagined.
Push notifications make it possible to send customers personalized content, allowing the company to expose its identity, products and services to customers, so that they will sees value in what is offered and won’t dismiss the messages summarily as spam. Once they realize the value of an app and what it offers, customers engage with it more and, consequently, consume what is offered.
Customer engagement can also be achieved with gamification strategies and reward programs that offer benefits for customers who perform actions or buy directly from the app.
5. Access to offline services
Websites and PWAs are great tools that should not be discarded when building a digital strategy. However, they have the need for web connection as a disadvantage.
On the other hand, native apps (Android and iOS) can be used even when there is no internet connection. Thus, users can use the application under any circumstances and the data is synchronized with the cloud once the internet connection is reestablished.
This functionality is useful for users who are on the go, such as sale representatives who may be in an area without internet coverage and need to continue working on their app. As an example, we have the Google Spreadsheets service, which allows users to create and edit spreadsheets directly in the cloud. Its smartphone app also allows users to work offline on spreadsheets and for the spreadsheets to be synchronized with the cloud when there is an internet connection.
6. Data source for analytics
One of the most important points of Digital Transformation is the extensive use of data (both its collection and analysis) to drive businesses. This precious information can guide business strategies, such as development or cancellation of features, in all types of markets.
Initially, obtaining this data can be a challenge. Through analytic tools, an app provides an inexhaustible source of useful information about customers and their usage and consumption habits.
Some of types of data that can be collected are:
- Time spent on the app;
- Most purchased products via app;
- Most searched products via app;
- Products inserted into cart and that can be offered again;
- Most used features in the app;
- Best time to send offers;
- Returns on ads;
This type of information allows data analyses that measure efficiency and productivity; and identify bottlenecks and opportunities for improvement, directing process and even strategies changes. In a scenario of rapid changes, having information of app usage and consumption habits is a differential for decision making in companies and analytics is the tool for this.
In addition, Machine Learning-based suggestion algorithms are fed with data. This technology is used, for example, when you read a piece of news on a portal and it suggests similar articles, or when music streaming services suggest songs similar to those that have already been played. Thus, through an analysis of the user’s profile and activity history, the app can suggest new products or actions, which increase sales and interaction with the app itself.
Returning to our initial question, “why does your company need a mobile app?”, we have seen that the first successful apps were the result of the creativity of developers abstracting questions from the real life of users. Nowadays, however, we observe that the most downloaded apps in virtual stores are aimed at monetized services (shopping, banking, entertainment and social media), that is, users are interacting, buying and consuming through mobile apps.
In this new scenario, creativity remains essential in mobile apps, however, it is employed through professionals and tools specialized in product development, fueled by information collected by analytic tools, which has generated apps that meet the demands of users.
In the case of apps for internal users of companies, the app will not be monetized, but attention to the real needs of users is key to ensuring its success.
In both scenarios, apps for online stores or for internal users of companies, Venturus has technical expertise, whether on Android or iOS, with apps developed for the Brazilian and international market, many of them recognized for their culture of innovation. In addition, Venturus also has a team to translate end-user needs into implementable requirements, using techniques such as Design Sprints.
Given all this, whether you believe that your business needs a mobile app or need help accelerating its Digital Transformation process, Venturus is the ideal partner for this journey.