The latest Wealth Report from the Luxury Institute reveals some interesting information on mobile app useage amongst ‘affluents’ (those earning at least $150,000 per annum) in the US, which is useful to all luxury brands considering their first foray into the app market.
Firstly, although apps have considerable penetration into the US smartphone owner market, by no means are the majority engaged with them. Just over 1/3 had downloaded apps to their smartphone, with another 11% planning to do so in the near future.
On average, 7 apps were used on a regular basis (although 57% used 5 or fewer). The most popular apps were those related to weather, followed by news and gaming applications – the same as for the general ‘app downloading’ public. And affluents weren’t adverse to paying for apps – with 61% of them having paid for at least some.
1/3 of the affluents who had downloaded apps (i.e. about 10% of the overall affluent smartphone market) had downloaded some consumer brand apps. The most popular luxury branded apps downloaded were for leading luxury brands such as BMW, Mercedes Benz, Ralph Lauren, Louis Vuitton and Chanel. The top 3 functions performed on these apps was clicking through to a website, communicating with others and locating a store.
So if you’re hovering on the brink of creating a mobile app for your brand, does this information clarify your decision?
Well, it demonstrates that an app isn’t an essential part of your strategy. Branded apps have been downloaded by approximately 10% of affluent consumers in the US, a market where smartphones have the largest penetration. If you can’t think of a way that a mobile app will enhance your customers’ lives which is consistent with your brand, it’s not essential to invest in one. The older your market, the more compelling the case for abstention becomes.
Secondly, ‘In App’ advertising is certainly an option for those brands who believe their customers are downloading apps, either as an alternative to creating their own apps or to augment their mobile strategy. Regular engagement with 7 apps on average shows that when luxury consumers do download apps, they are highly engaged with them. And only a minority download branded apps, so this is a way of spreading your message to a wider audience. The key is to make that ‘In App’ advertising highly relevant within the context of the app in which it is embedded.
However, if you can think of a compelling use case for an app – something that is genuinely useful to your consumers when they’re on the move that enhances perceptions of your brand – then the affluent market for branded apps is not inconsiderable, particularly when targeting a younger market.
And an app offers many possibilities for brands – the ability to engage with customers on a 1-to-1 basis; to convey news, events, product and service updates and offers; to create sales by supporting mcommerce or drive to store features; and to spread the word about the brand via embedded social media functions. And on a simpler level, it can make a brand appear contemporary, or at least, not behind the times – 56% of respondents to the survey viewed brands with mobile apps as ‘innovative’ and ‘cutting edge’.
The key to making a decision as to whether to proceed is partly based on market but also partly based on a compelling ’use case’. Can you create something which is genuinely useful to your customers and genuinely useful in the context of a mobile device? If the answer is yes, then you should go ahead but be careful you apply the same attention to detail to your app that you do to your own products. Luxury brands have craftsmanship at their heart and a poorly designed and executed app will only cause your customers to question your dedication to this principle.