Design, Performance, and Security of Apps are New Weapons in the Battle for Attracting Customers
Voice&Data: What are the key factors that are influencing major eCommerce players to move to app-only platforms?
Mitesh Agarwal: According to an industry study, the number of mobile Internet users in India has crossed 200 mn by June 2015. That is the potential consumer base for an eCommerce company to tap if they have a good mobile application. Mobile Internet penetration is growing at a faster pace than broadband paving way for mCommerce to overtake eCommerce. A BCG study highlights that the last 100 mn Internet users will be drastically different from the first 100. The group will shift from being 60% mobile led to 80% mobile led. The number clearly is still high and in this light the writing is on the wall for businesses—mobile is the best way to reach consumers anytime, anywhere.
The second reason for wanting to shift an app only model is to reduce operational expenses. There is stiff competition in the industry and eCommerce players are stretched thin to stay profitable. They don’t want to function on multiple platforms and apps offer an opportunity to have a leaner operational model. Besides, with mobiles, companies can interact closer with the customers and offer them a personalized shopping cart. Apps also enable companies to advertise and market to customers more accurately than websites, collect more detailed user data, and potentially increase customer loyalty.
Voice&Data: What are the advantages and disadvantages of app-only platforms?
Mitesh Agarwal: With the growing number of smartphones and increase in mobile Internet penetration, it makes perfect sense for eCommerce players to switch to a mobile-only platform to reach a large customer base at a faster rate. It also helps them glean more accurate customer insights and offer customized offers that have a higher rate of converting into a purchase. For consumers, mobile apps offer the convenience of anytime anywhere shopping.
However, the flip side is—one in four mobile apps, once downloaded, is never used again. That suggests a high percentage of apps fall short of expectations. Companies and people want and even demand immediate benefit from the mobile experience. If there is a lag or delay in processing a request, a customer is less likely to go ahead with the transaction. If mobile app developers can’t innovate or deploy quickly, users will simply delete the apps or stop using them. In fact, a recent study by Oracle found that a poor mobile app experience will make millennials less likely to use a company’s products or services. It also found that while they are happy to receive support in the form of value-added communications, they are turned off by unsolicited communications in the form of push-notifications that are not relevant to their individual needs. Security and privacy of data are other concerns that will discourage a user from undertaking a mobile transaction. In this light a company with an app-only platform has to a tread a fine line between being intrusive and relevant.
Voice&Data: Do you envisage a future where players from other industries (other than eCommerce) start taking the initiative to app-only platforms?
Mitesh Agarwal: According to the United Nations, six of the seven billion people worldwide now have mobile phones. Besides, smartphones have become more than just a phone. It is also a computer, camera, entertainment center, map, personal trainer, shopping guide, and even your wallet. In this context, it is not hard to imagine a future where it will become the only platform for doing commerce, selling and engaging with a customer. Many sectors outside the eCommerce space could jump the bandwagon.
In fact, Uber in a sense paved the way for this transition. Launched in March 2009, it quickly tapped into customers’ enthusiasm for ‘everything mobile’ and completely destabilized the traditional taxi model in the US which simply could not match the agility of a fully mobile business. The model has caught up in India and many taxi service providers are shifting and encouraging their users to use their app for booking. Having said that, as discussed earlier, mobile has its limitations and unless these issues are addressed, businesses will be weary to switch completely to an app only-platform.
Voice&Data: What are the challenges for organizations to move to an app-only model?
Mitesh Agarwal: Customers equate the experience they get via a mobile or tablet app with the quality of the brand behind it. The design, functionality, performance, and security of apps today have become the new weapons in the battle to attract and retain customers, and businesses that do not arm themselves appropriately have little chance of coming out on top.
Poor app performance and speed are clearly deal-breakers for a company when it comes to their apps. While some businesses would argue that part of this lies out of their hands—as the strength of data networks is of course not their responsibility in most cases—it will fall to them to develop apps that fulfill customers’ requirements for functionality without being so clunky as to always require above average network connectivity to work. This may extend to providing users with some offline functionality or background synchronization options in instances when network performance is lacking.
Developers must also consider the impact of mobile traffic and load on backend systems that weren’t originally designed for mobile apps. Ideally mobile integration should be an extension of the Service Oriented Architecture (SOA) that is already in place in an enterprise. This will help bring down cost and provide greater agility to business application. And then there’s the cloud; by abstracting back-end functions in the cloud, businesses can free up their resources to simultaneously focus on front-end development and develop strong mobile business models.
Another major challenge revolves around ensuring data security. With people accessing information and sharing personal details rather indiscriminately today via smartphones, tablets, and their personal computers, companies will need to take proactive measures to protect their data. No longer will simple encryption, firewalls, and network security controls alone do the trick. Companies will need to control access from the inside out and at every layer of their IT, from the database that processes data to mobile devices tied to the system.
Voice&Data: In an app-driven world, what kind of opportunities does Oracle envisage in India?
Mitesh Agarwal: Our strategy is based on the paradigm ‘Simplify Enterprise Mobility’. We are the market leaders in Fusion Middleware and Oracle’s Mobile Platform leverages our middleware infrastructure for easy integration between mobile apps and back-end systems.
We own Java and developers use Java and HTML5 to build mobile apps once and deploy them to multiple operating systems and multiple mobile devices. Our mobile platform works with popular native, open source and third-party frameworks, just as it works with Oracle Mobile Application framework, providing for a very open and flexible architecture. Our products are also going mobile. We have pre-built mobile apps across our product lines, to help business users in India access, and work with these solutions anywhere, anytime, and on any device of their choice.
There is a lot of discussion in the industry around online platform moving to mobile as the main source of engagement with the customers. Many eCommerce players are firming up plans to channel efforts and marketing dollars entirely on their mobile applications. Companies such as Flipkart, Myntra, Snapdeal, Quickr, and Ola get 70-80% of their traffic from mobile devices, which is a key factor to influence these players to consider moving to app-only platforms. However, a recently released survey by Oracle on customer response to apps reveals that 56% of millennials rarely act on the push-notifications they receive. Voice&Data caught up with Mitesh Agarwal, CTO, Oracle India, to understand the trend towards mobile platforms, and the challenges and opportunities for companies in moving to an app-only platform. Excerpts.