Small Companies Drive Sales With Apps

In the summer of 2010, Sheri Gurock, co-founder of Magic Beans, a retailer specializing in toys and baby gear, decided to join the mobile app craze. But her timing may have been a little off.

Ms. Gurock deployed an app that allowed in-store customers to bypass the cash registers and check out their purchases themselves, on their mobile devices. Magic Beans got the app at no charge by working with its creator and agreeing to be a retail testing ground.

The app also allowed customers to scan a bar code to get product information, descriptions and reviews that had previously been available only to customers shopping online. When a customer bought an item using AisleBuyer, the app would automatically recommend two related products in the store and offer discounts and coupons. That resulted in an 8 percent increase in sales to those who used the app, Ms. Gurock said.

But the app has been used by just 5 percent of customers, Ms. Gurock said. Although she believes mobile self-checkout represents the future of retail, Magic Beans, which has five stores in the Boston area and 50 employees, was “very early to the party,” she said. “This app was on a mission to change 100 years of shopping habits, where the in-store experience is bringing your items to a cashier.”

As a result, she said Magic Beans was phasing out AisleBuyer, but she expected to try again — and with good reason. By the end of this year, according to the digital marketing firm eMarketer, there will be 116 million smartphone users in the United States.

At that point, reports Cisco, the number of mobile-connected devices globally will exceed the number of people. That is a large and expanding canvas for apps at a time when consumers have come to expect one for almost everything, said Noah Elkin, an analyst with eMarketer. “It’s getting to the point where apps are similar to search,” he said. “If you don’t get any results for a brand, that brand doesn’t exist.”

That puts growing pressure on small businesses to create and publish their own apps. This guide looks at the experiences of several companies that have tried.

BUILDING IT: THE BASICS There are essentially two kinds of apps. Native apps are written for specific operating systems — Apple’s iOS, for example, or Google’s Android — and are installed directly on a device. They are available through online stores like iTunes or Google Play. Mobile Web apps run on a device’s Web browser — and because of that can be slower — but they work on a variety of systems. There is no app store for the mobile Web so those apps can be harder for consumers to find.

Small businesses can build native and mobile Web apps using do-it-yourself tools or by hiring a developer to custom-design one. Tiggzi, a development platform made by Exadel, offers drag-and drop tools for building apps and integrates services like Facebook and OpenTable.

Titanium from Appcelerator does not require developers to have deep programming experience, but they do need to know JavaScript, HTML or CSS. EachScape, which also uses drag and drop tools, lets users build and manage apps that are delivered to a device as a native app.

Most platforms allow the builder to add features like push notifications (alerts that can announce sales, for example) and the ability to connect to social networks.

The cost depends on the scope and complexity of the app, Mr. Elkin said. For example, using Tiggzi, which is a cloud-based subscription service, the cost ranges from free for one app to $50 a month for 50. Custom designing an app can cost several thousand dollars.

MARKETING TOOL PrimeGenesis, an executive consulting firm in Stamford, Conn., created an iPad app last year to encourage users to buy the firm’s book, “The New Leader’s 100-Day Action Plan,” written by three of the company’s founders.

The firm has 13 partners and about $2 million in annual revenue, and it used Mobile Distortion, an app developer in San Diego. The app, which cost about $35,000, provides executives entering a new company with an interactive, mobile template for creating and carrying out a 100-day action plan.

PrimeGenesis sells the full app for $9.99 (a basic version is free), but George Bradt, managing director, says the firm measures the app’s success by the number of clients it produces. “The app is there to drive people to the book, which markets our firm,” he said.

Each new client it attracts represents about $50,000 in revenue. “If we sell 10,000 books a year and convert five buyers into consulting assignments,” Mr. Bradt said, “that’s a quarter of a million dollars.”

SUPPLYING INFORMATION In June, Zeitlin & Company Realtors in Nashville introduced an app that puts updated Multiple Listing Service data at the fingertips of its agents, clients and potential clients. Zeitlin has 130 employees and about $8 million in annual revenue.

Its app takes a user’s location and creates a map of all the homes for sale in the immediate vicinity. It gives information about each house, including lot size and price, as well as school zoning and nearby restaurants, banks and grocery stores, said Sam Averbuch, a co-owner and the company’s chief financial officer.

A house hunter can mark a particular house as a favorite and that preference is stored in the cloud, so the agent can see it and then suggest other, similar homes in the neighborhood. Users can get information on any house they see and like, even if the house does not have a “for sale” sign out front.

Created by Virtual Properties, a developer in Madison, Wis., that specializes in the real estate industry, the app has been downloaded more than 1,500 times since it was introduced a few months ago. It costs $25,000 annually, which covers both the initial development fee and the expense of keeping the information up-to-date.

DEEPEN BRAND LOYALTY Carpe Diem Private Preschool, which has 120 employees, $5.8 million in annual revenue and four preschools in suburban Dallas, created an app in August 2011 to let parents observe their children through a classroom webcam.

The app, which cost about $5,000, was developed by one of the school’s founders, Tim Murphree, who happens to be a Web developer. Mr. Murphree wrote the most recent version using PhoneGap, a free, open-source framework for creating apps.

Ashley Murphree, a co-founder who is Mr. Murphree’s wife, wanted the app to reinforce the brand’s image as a cutting-edge preschool that embraces new technology. “I think it sets us apart and has helped us gain new customers,” Ms. Murphree said. “The app says we are making a commitment to always improving.”

BE SURE YOU ARE READY Salumeria Biellese, which produces a variety of handmade cured salami and sausage, had the advertising firm Quinn Fable redo its Web site and create an app for customers, largely restaurants and wholesalers. Salumeria Biellese has 20 employees spread among its Hackensack, N.J., production plant, its Manhattan retail store, and a Manhattan restaurant called Biricchino.

Fouad Alsharif, one of three owners, said the company is eager to introduce the app, which will allow customers to place and review orders using mobile devices, but it is waiting until it has the back-end infrastructure in place to support the app’s functions.

“We are in the process of expanding our production facility, adding drying rooms and refrigeration,” Mr. Alsharif said. “If I advertise that we have 100 pieces of a product available, it has to be available. So we can’t launch until we are really ready for it.”

FROM: NYT OCT 10, 2012

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