Store Pass and it's Competitors.

Though I've mentioned in some previous posts that Store Pass's greatest competitors would most likely be Groupon and Voucher cloud (but only indirectly). Along my research I discovered more apps that enhanced shopping experience but none in the way that Store Pass does. But by collecting information on these apps, they can all contribute to enhance and perfecting Store Pass.

So who are the competitors and what do they do?

Let's start with the most well known ones.

• Groupon

Groupon is an American company that, due to it's success has now expanded globally. Rapidly overtaking America, Groupon soon interested the capitals of Europe and Asia also.
To reiterate the above video, Groupon (the combined words of Coupon and Group) distributes large savings and offers by encouraging users to book activities with friends. For example, if a Spa was offering 70% but required 10 individuals to sign up, these 10 individuals would have to all pay in order for the deal to "activate". If they don't reach the quote needed by the time the offer expires, all customers get their  money back.
The unique selling point of Groupon is that it works in numbers, by urging consumers to bring their friends to events, companies are guaranteed a large numbers of customers. This helps with company footfall, free marketing via word of mouth, a great deal and gains customer loyalty.

These numbers are correct as of 2012 and can be assumed to only have grown:

• The company has now sold 170 million Groupons to date and counts 33 million active customers and 250,000 merchants in 48 countries.

• In 2011, $2 billion in business sent to “Main Street” small merchants.

• Also in 2011, 11 new products launched, including a several that take the company away from the daily deals format Groupon Goods, Getaways, Rewards, Now!, and Scheduler.

• 11 acquisitions, including several in the mobile space in the year.

[Source]

However it's not always been smooth sailing for Groupon as it fell victim to it's own success with consumers placing more orders than expected for some companies.

• Vouchercloud

[Source]

Vouchercloud is the virtual take on the good old days of cutting coupons out of magazines and newspapers. Before internet discounts for your local restaurants and boutiques were invented, if an individual wanted to use a discount or coupon, they'd have to cut it out of cereal boxes and other packaging, but ever since the rise of Voucher cloud, that novelty has much been neglected as apps began taking over.

Compared to cut out and carry, Vouchercloud is:

• Always accessible as it's in app form inside your Smart Phone.
• Always up to date as updates are electronic and therefore instant.
• Location relevant and can be filtered via tabs in interests of 
• Does not require a group interest like Groupon does.

• Living Social

[Source]

Extremely similar to Groupon, Living Social encourages individuals to urge their friends to partake in deals, which earns the individual money off their original discount or purchase. Living Social states that "We help local and national businesses grow by introducing them to high-quality new customers. We deliver compelling and cost-effective marketing solutions for businesses large and small and provide our partners with the tools to make our members their regulars." 

Living social offers discounts from local activities, to small getaways and coupons for shopping.

Covering all platforms of smartphone, Living social is also available on the App Store, Google Play and Windows Phone - demonstrated above.

However Living Social seems to be quite hit and miss from the reviews read on this site. Another site gives the same idea of disappointments by Social Living.

Those are what I believe to be the top three competitors for Store pass.

I've also looked at other discount apps/websites and comparison sites for a richer understanding of how they work. An extremely comprehensive blog has put together a lost of the Top 20 Mobile Shopping Apps can be viewed here.

The Store Pass App. Introductions and Features.

So after all this research what have I concluded?

My initial idea stays the same.

The App:

The Pros:

• As I already demonstrated with the Bump App and more initial research this is very possible.
• Provides the function for users to opt in and out of their favourite retail stores and restaurants/café's.
• Provides different types of discounts such %'s off (e.g. 10% off when you purchase over £10), money off (e.g. £5 off when you purchase over £20).
• Free incentives and treats. (e.g. at a fashion store, free bracelet with every dress purchase or at a restaurant free drink with every main course).
  - This helps towards the promotion of new products and even the clearing of products that are overstocked or not selling well!
• The location service function and geo-fencing function is useful as it only offers services that are local. Users can also filter offers from 30ft to a mile away.
• Open to all businesses, big and small. Corporate and independent. From Tesco's to the local corner shop. (If necessary.)
• Is cheap to manufacture ($99 for a Software Development Kit & App License) requires a Mac (which I own) and a couple of really driven techie people. (Check!)

The Hurdles:

• A new concept can be quite difficult to encourage users to embrace.
• Indirect competitors such as Groupon, Vouchercloud can also be quite large competitors due to their success.
• Would require a lot of exposure and mass public use to get running and off the ground plus to maintain.

[Background Image Source]

So how would it work?

Head office computers / the marketing team would calculate which stores require the use of the Store Pass app. Notification allowances would then be sent to the store and distributed at the store manager's discretion.

The marketing team would also set the margins for which the offer operates. The time and price limits etc. and how many to send per hour per day.

Users that receive this offer than have a limited amount of time to claim it, they'll be encouraged to browse even if they were initially uninterested. For the user there is no loss, browsing is costless and they may find something they're interested in.

Initially the app would be free as costs could run on profit from store discounts, if the app proves to be popular, a small price can be implemented. The price would be a small amount such as £0.69 - £0.99. People would quickly earn this money back via the discounts therefore wouldn't mind the small cost of maintaining the app.

The idea is fairly straight forward but extremely effective, all faults and worries that have been brought up can also be ironed out and smoothed, with the right amount of work and knowledge.

As expressed in my Survey results, available here and here it would prove useful and an exciting new shopping experience.

The WWWWWH's

[Image Source]

Who?

• Stores that use this can vary from large companies to small companies. It may appeal to retail stores such as: River Island, Dune, Urban Outfitters, H&M, Forever21  - stores that don't usually offer many sales or existing discounts (e.g. Student Discount)
• Consumers that use this app can be anyone of all ages that enjoy shopping and discounts. It's open to anyone with a smart phone and downloadable for no cost at all. However with this kind of demographic, the age range that would be most interested in this app would be between the ages of 21-29+. Individuals in that category have usually secured a small to medium disposable income who would be interested in shopping and saving.

What?

• Utilising this app would be extremely simple, it would just require the installation of a program into head office and store computers for retailers and just a simple app download for users.

When?

• The great thing about this app is that it's time of use is completely controllable, there is no promise of high or low, frequent or seldom discounts. A store can utilise this to their full benefit ensuring a days profit is always secured.
• However due to consumer needs there should be a guaranteed minimum time of discounts e.g. two-three times a week, to keep interest in the app up.

Where?

• Store pass is extremely flexible but for the purposes of trialling it's success I would like to launch it in a city smaller than London. With London hosting the majority of head offices and flagship stores and the highest population in England, it tends to not struggle with huge sales and footfall.
• Store pass would be more directed at second cities such as Birmingham, Manchester, Leeds, Liverpool etc. All the cities named have notable shopping centres and a high population count. Despite all that, some stores still struggle with footfall and completing daily targets. For this reason it'd be much easier to test the effectiveness of store pass.

Why?

• As far as my research can prove, this type of app does not yet exist. There are apps in which you can manually search for discounts but it's far more time consuming than an app where discounts search for you. 
• This method is fast, easy and accurate. Stores can mix up the offers and discounts however they want to suit their company's needs.

How?

• As mentioned and to quite myself, Store Pass "Is cheap to manufacture ($99 for a Software Development Kit & App License) requires a Mac (which I own) and a couple of really driven techie people. (Check!)"

Target Consumers & Demographic

• University Students aged between 18-21 | Emergent Service Workers

[Image Source]

Students in the UK have the support of the government via student loans for some disposable income and more often than not, a lot of students also balance uni life with having a part time job.

• Young Couples aged between 21-26 | New Affluent Workers

[Image Source]

Young couples that have worked hard and been lucky in the careers department that are earning steady money and living by themselves are in comfortable enough state to do necessary shopping (groceries, furniture etc.) as well as leisurely retail activities (clothes shopping, going to restaurants.) 

• Established Families between 26-30+ | Technical Middle Class & Established Middle Class

[Image Source]

Though through my personal demographic bubble I cannot closely relate to many established families in the age ranges suggested; The research of the success of other discount apps I can safely say that the response with discounts for families is just as popular as the attention that's garnered from younger individuals.

[Chart and Graph information from this Source]

Store Pass Survey Results Analysis Part II

After the short yet sweet analysis of basic data (gender, age, smart phone/app user etc.) I then pitched my idea to see the type of responses the public would give.

Thankfully 88% of users who took this survey expressed interest in the store pass idea. I would also like to take this opportunity to address the concerns voiced in the survey. Since it's a short survey I couldn't respond and communicate my idea fully.

Response number two wrote "Only if you could opt out of certain stores. It would be frustrating to get notifications when walking past a store / restaurant you hated" Though I didn't mention in the survey, opting in and out of stores/restaurants of interest is a huge part of the Store Pass app. I have heavily considered the accessibility of the app so options such as opting in and out plus location filters would be a key component of the app.

Response number three stated "It would feel like a security issue and discomforting that an app would know that I'm walking by a particular store." Many smart phone users have an option on their phone known as Location Services. This allows the phone to continually take in data of where the user and their phone is via the internet. Functions that use Location Services include GPS, Internet Browsers, Facebook, Twitter, Instagram and and Find My iPhone. The same user is an owner of a Samsung S/Galaxy series so it's highly likely that they use some of the apps listed above.
The average smart phone user more or less purchases a smart phone for it's multifunctions and capability of using apps as opposed to just being a cellular device.

[This is what the location services options look like on a Samsung Galaxy, the suggested model of phone. Source.]

 Usually when installing an app or using a smart phone the Privacy issues surrounding location services is within the terms and service of the respective/app or phone. This function is possible to turn off at any time at all. Though I understand the security issues that surround using an app that tracks location, I will of course ensure the safety of users as much as possible within my control. But a wary user should know that a some smart phone's functions rely heavily on such things as Location Services.

Despite the concerns of privacy the consumer who took the survey expressed interest in the Store Pass idea. Here are the rest of their results:

They also answered that they're extremely attached to their mobile device so with the security promised and right construction of the app they could still be a potential customer and aren't completely put off.

However this is all only constructive criticism and will help towards perfect the Store Pass App.

For the next question I suggested different ways of utilising Store pass. Offers don't have to be limited to discounts. They could also be used to promote new products (e.g. in Topshop, spend over £20 and receive free nail polish) in retail stores or (e.g Pizza Hut, spend over £20 and receive free new dessert!) and etc. There are a lot of possibilities for the uses of this app which I will explain in an up coming post! 90% of people that answered would be interested in the mixing up of offers to keep things fresh and exciting.

However I gave the people that answered no, the chance to expand on their answer.

A lot of the worried responses were from consumers who disliked the countdown idea. As I didn't fully introduce the idea and only gave one example this helps filter out the type of discount that people can enjoy. Shopping should always aim to be stress free as many individuals seek relief in retail therapy and when discounts appear it can only be better!

Of course the countdown idea is definitely an interesting one and if it went ahead it would have to be regulated by store security. It wouldn't be ideal for all users to be notified at the same time of this offer so pings would go off at different intervals, giving everyone a different chance.

Store Pass Survery Results Analysis Part I

As many good researchers know, simply compiling data sometimes isn't enough to help study a project, so for the purposes of some good first hand research I conducted a short survey (also linked on the left) consisting of questions about technology, shopper response and general consumer research.

I managed to garner a little under 70 results and will try to analyse the relevant responses.

The main demographic of my survey results were females between their 21's to 26's. This makes the results more relevant as smart phone owners in this age group tend to be spending and earning money regularly as they're capable of securing long term jobs and have the knowledge and ownership of smartphones.

So 98% of individuals that took my survey own one or more smartphones. 

The numbers above indicate that most people who have smartphones are extremely tied to it whether for reasons of leisure or business. 

It is today's norm to always be out shopping with your phone as for some people it acts as a memo pad for what purchases to make as well as a mobile device for meeting up with friends. Individuals that use their phone daily outside of their homes are the ones also usually with discount apps.

Though 52.17% of individuals don't use discount/shopping apps does not necessarily mean they aren't interested in receiving money off their purchases. They may also be oblivious to such apps as some smart phone users only use their phones for very practical reasons or the app isn't available to them (i.e Blackberry users are very limited in app choice).

But I believe with the right marketing app users will be encouraged to download and use more discount/shopping apps.

Retail sales impact on the Economy.

It's no surprise that discounts and sales raise sales, stores use this to clear stock that they have too much of or just as marketing strategy to bring in footfall and make small sales. As small sells are generally far easier than large sales. Cheap items encourage impulse sales, so people usually can justify buying inexpensive items as being a £1 or £2 short doesn't have a great impact on their life.

A hopeful post titled "UK retail sales rise more than expected in September" published in October 2013 states that "retail market research specialist Verdict on Monday forecast British retailers were set to enjoy their best growth in Christmas sales since the financial crisis.

The retail sector accounts for just under 6 percent of the British economy.

A first estimate of British gross domestic product in the third quarter is due to be released on Friday next week. Many economists expect growth picked up to around 0.8 or 0.9 percent from 0.7 percent in the second quarter." which further demonstrates my point on the retail economy being a key component to the recovery of the British financial status.

The BBC also wrote "Now it is true that the very high 143% current ratio of gross household debt to income is down from an eye-watering 169.9% peak in 2008, with the fall largely due to the impact of inflation on nominal wages.

Maybe, therefore, households on the margin feel a bit less financially stretched than they did."

[Source][Source]

For this reason I believe money saving apps will be effective and welcomed by the nation. We can already see this happening with apps such as Groupon and Vouchercloud - some of the most popular disscount apps in the UK! 

An ironic article spoke of Groupon's success becoming it's own downfall as manufacturer's and businesses underestimated the success of their offers, resulting in an influx of business that was unmanageable and even potential loss. 

"Rachel Brown, who runs the Need a Cake bakery in Reading, Berkshire, has said the 75pc discount she offered Groupon subscribers last spring on 12 cupcakes that usually cost £26 was “without doubt the worst ever business decision I have made”.She only expected a few hundred orders but under-estimated the deal’s popularity and, besieged by 8,500 people who signed up for the £6.50 bargain, ended up losing between £2.50 and £3 on each batch she sold.... Mr Tschotsch (joint director of Groupon) said Groupon now does much more to prepare merchants making offers through the company, in addition to carrying out credit and director checks."

[Source - Cave, A. (2012). Groupon ‘victim of its own success’. Available: http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/9192302/Groupon-victim-of-its-own-success.html. Last accessed 7th December 2013] 

There's no doubt of groupon's success visible in nearly all corners of the virtual world when searching for coupons and discounts. Some people have even found their businesses success through Groupon. Here are some inspiring stories.

This one in particular is my personal favourite:  "The last success story comes from the Elkhorn Inn in Eckman, West Virginia. What I learned from their experience is that business should e flexible with Groupon offers. The inn sold a total of 82 packages, 99 percent of which went to new clients. The inn told me their philosophy is “if they love us enough to buy three Groupons so they can keep coming back to the Elkhorn Inn & bring their friends, they deserve the discount!”Here’s the part about flexibility: The inn also chose to allow purchasers to use two Groupons simultaneously for two guest rooms, so they could come with their children or friends. When the Groupon purchasers call to book, the inn also has the chance to upsell the new customers on dinners at the Inn. They were prepared.
Groupon may not be in the dictionary yet, but it sure is helping to define local business in this crazy economy. "

[Source - McCue, TJ. (2011). 5 Groupon Success Stories And Discount-to-Loyalty Strategies. Available: https://www.openforum.com/articles/5-groupon-success-stories-and-discount-to-loyalty-strategies/. Last accessed 7th December 2013.]

This helps towards my independent research for my app as I can learn from the errors of the discount apps that have come before. With the limited time and product offers there is little need to worry about over-orders as stores remain in full control of the amount of stock and amount of discount an individual gets. per customer, per day. 

Monetizing apps.

"Passion is without doubt the main driver of a developer’s motivation to build great and beautiful apps. This passion will keep you awake at night and fuel the creativity and hard work necessary to the completion and perfection of a beautiful product.However, passion is not enough."

- [Source - Thomas Sommer. (2013). Monetizing Your App with Game Offers.Available: http://appdevelopermagazine.com/895/2013/12/2/Monetizing-Your-App-with-Game-Offers/. Last accessed 2nd December 2013.]

Free Apps

While it is true that some of the world's most downloaded apps are free (Angry Birds, Facebook, Twitter, Facebook Messenger, Fruit Ninja [source 1 & 2]) Free apps make money through advertising, a lot of free apps have a paid version where you can enjoy the app without advertisement interruptions or a premium service. Initially attracted by the free download, some apps then offer in-app purchases which are optional but generally persuasive (depending on the market) and will generate revenue that way.

"Ad spending on apps of all kinds – both mobile and desktop — is growing. Most industry analysts choose to measure only mobile app spending though, as most apps are created for the mobile and smartphone space. Mobile advertising revenue increased nearly 1.5X in 2011, to top out at $1.6 billion for the year.

The future of app monetization clearly lies in ad-supported model. A recent study by Cambridge University computer scientists found that 73% of apps in the Android marketplace were free, and of those, 80% relied on advertising as their main business model. Free apps are also far more popular in terms of downloads, the researchers said. Just 20% of paid apps are downloaded more than 100 times and only 0.2% of paid apps are downloaded more than 10,000 times. On the flipside, 20% of free apps get 10,000 or more downloads."

 -[Source -  Manoogian, J. (2012). How Free Apps Can Make More Money Than Paid Apps. Available: http://techcrunch.com/2012/08/26/how-free-apps-can-make-more-money-than-paid-apps/. Last accessed 5th December 2013.]

Here are some examples of advertising within apps, working as live links, if you tap on the image banners shown in the app you'll be redirected to the web page origin of the app for browsing of it's products and services. Some apps also lead directly to app downloads e.g the Amazon app.

{Left: The DailyHoroscope App, Nike Advertisement Shown - Right: Pic Jointer App, Amazon Advertisement Shown}

In app purchases are usually more popular for games, in which you can purchase extra "lives" (turns) and in-game bonuses (more points!) 

{Candy Crush since it's release has harboured over half a billion downloads on Facebook and as an app.}

"70% of the people on the last level haven't paid anything. It's designed so you can complete the game," says Tommy Palm, whose official job title is "Games Guru" at King, although his role is more akin to a head of global studios for the social and mobile games publisher."We focus internally a lot on the player experience, making sure it's really fun to play. And we do not differentiate between people who pay and people who don't: we just see them as players, and optimise in making sure the game is really fun. So far, that's been a great strategy for us."

[Source -  Dredge, S. (2013). Candy Crush Saga: '70% of the people on the last level haven't paid anything'. Available: http://www.theguardian.com/technology/appsblog/2013/sep/10/candy-crush-saga-king-interview. Last accessed 5th December 2013.]

For My Research

The Store Pass app will initially be free, much like Voucher Cloud and Groupon as I believe with restaurants and stores investing it'll be enough to cover the cost of the initial construction of the app. To test the market also the launch should be free, users should be encouraged to download and then from it's success it can be a paid app. Like a multipass discount card, similar to how railcards work, if you use the app enough times you eventually earn back the £1 or £2 that you'll be asked to pay for it. People will see past this small cost and continue to download and use the app.

With the right marketing and promotion, this app could be released and working then earning money back at the low cost of make. 

Resources used:

http://appdevelopermagazine.com/895/2013/12/2/Monetizing-Your-App-with-Game-Offers/

http://www.pureoxygenmobile.com/how-many-apps-in-each-app-store/

http://mashable.com/2013/09/12/popular-smartphone-apps/

http://www.pcpro.co.uk/realworld/381058/how-to-make-money-from-apps

http://www.forbes.com/sites/tristanlouis/2013/08/10/how-much-do-average-apps-make/

http://e-string.com/articles/9-ways-monetize-your-ios-app/

Smartphones, Apps and Discounts Survey.

To help enrich my research of apps, smart phones and all things retail I conducted a short and simple survey for my peers to take in response to their use of certain apps and smartphones.
I would very much appreciate if you could take this survey also!
Results will be due for analysis in a week, I hope to collect information from as wide an audience as possible.

https://www.surveymonkey.com/s/HR6X9VJ

Thank you!

The rise of Apps.

"Apple's App Store boasts 585,000 apps with 1bn downloads a month"

- [Source - Thornhill, H. (2012). Apps have overtaken the Web in popularity according to the latest statistics (actually, there's probably an app to tell you that) Read more: http://www.dailymail.co.uk/sciencetech/article-2119332/App.Available: http://www.dailymail.co.uk/sciencetech/article-2119332/Apps-overtaken-Web-popularity-according-latest-statistics-actually-theres-probably-app-tell-that.html. Last accessed 30th Nov 2013.]

[Source]

Apps have existed since before the iPhone but wasn't popularised since the release of the first ever iPhone along with the app store in 2007. The rise of such apps quickly overtook everyday life just as much as the internet for it's ease of use and convenience. Basic apps like alarms, calculators, calendars and notepads are used by all smart phone users. As the technology of apps advanced many more things became possible with standard mobile devices; You could keep up to date with the news, network with your friends, check your bank statements, use GPS, purchase items and even sell items [eBay] just with one mobile device. Research suggests that nowadays apps are even more widely used than web browsers since an individual with no laptop or computer could purchase a tablet and experience the same services in the internet for a lower price.
However this may only be true to a certain demographic for example the more mature audience. Technology evolved so quickly in the past 50 years that laptops and computers are now often complex machineries that the older users find hard to navigate around. Apps are far more practical and cleaner than a lot of desktop computer systems. Also tablets are cheaper.

Apps may be easy to use but they're just as easy to use with the amount of the resources available on the internet. An App license is $99 (around £60) per year and comes with an iOS SDK (Software Development Kit). This innovation has not only improved the lives of many, but also the businesses of huge companies like Asda, Tesco, Sainsburys. On the high street also for retailers such as Topshop, River Island, Forever 21 and more. But don't take it from me, hear more about the ease and accessibility of App development and it's future from 12 year old Thomas Suarez who appeared on TED talks which is " a nonprofit devoted to Ideas Worth Spreading. It started out in 1984 as a conference bringing together people from three worlds: Technology, Entertainment, Design. Since then its scope has become ever broader. " [Source]

Not to belittle the intelligence of 12 year olds but if this success with apps can be accomplished at such a young age, it's incredibly inspiring to think how far the boundaries of app development and technology can be pushed when backed by a house of creative ideas and the right technology.

I'd like to leave this post on a high note with one last motivational story: A man crafted his $6 billion empire from his hospital bed which began with the necessity of paying his hospital fees.

[Source - Chun, J. (2012). Chad Mureta Of App Empire Started His $6 Million App Business From A Hospital Bed. Available: npost.com/2012/06/20/chad-mureta-app-empire-6-million-business-started-in-hospital_n_1607456.html. Last accessed 30th Nov 2013.]