3 Ways the App Store’s New Shopping Category Will Shake Up Retail
Earlier this month, Apple introduced a new Shopping category to its App Store. Apple’s 24th genre for classifying apps, the Shopping category brings all apps related to retail or daily deals under one roof.
Before the change, the majority of these apps were scattered about the Lifestyle genre, a loosely defined array of apps covering everything from online dating, to wallpapers, to real estate. Like apps in any other category, shopping apps now have their own top charts and featured listings—meaning the days of competing with unrelated apps, like Tinder and Zillow, for the coveted top rank are in the past.
The introduction marks a significant turning point in both the way retailers approach app store optimization and the way consumers approach app evaluation.
For consumers, it’s a blessing. The new genre provides consumers with access to information that allows them to better assess which apps best fit their shopping needs. For the first time, the consumer can see all related apps, along with their ratings, prices, and rankings, on one screen and make an apples-to-apples comparison of top matches.
For retailers, the ramifications aren’t as clear-cut. With a distinct category to promote the discoverability of shopping apps, retailers can expect more consumers to download and use their apps, growing both organic acquisition and revenue.
We predict, however, that the new category will upset the mobile retail industry in a few less conspicuous ways. Each of these ways can be interpreted as an opportunity or a threat, depending on where one stands in the mRetail food chain:
Here are our three predictions for how the App Store’s Shopping genre will shake up retail:
1. Established retailers will face an increasingly competitive landscape.
While they no longer have to compete with such a broad pool of apps, retailers now have much fiercer competition for ranks and downloads. Bringing all shopping apps together makes it easy for the consumer to directly compare apps or allow heuristics to make their decision for them as they opt for the highest-ranked or highest-rated app.
Paid apps have the additional challenge of competing more directly on price, a strategy that can easily snowball into a price war. As customers browse all paid shopping apps with no predilection one way or another, which app do you think they’ll go for? The $4.99 cent app or the $0.99 app that seemingly meets their needs just as well?
This shift in the competitive landscape comes at the end of an already challenging year for app publishers. In January of this year, the App Store hit a new record for competitiveness, with over 10% of total daily app downloads going toward the top 200 apps. And by August of this year, App Store competitiveness increased 50% from August 2014, as reported by Fiksu’s Competitiveness Index.
2. The little guys will have increased visibility and a more level playing field.
While new competition stirs things up for established retail apps, smaller apps and new market entrants have much to gain from the new shopping-specific top charts. These charts break up the shopping genre into narrow subsets based on store type (“Grocery,” “Department Store”) and style (“Chic,” “Dapper,” “Cozy,” “Rugged”). This specificity allows niche apps to be featured prominently in the App Store as leaders in their specific category, rather than being compared to apps with a much broader audience destined to dominate the rankings.
Additionally, the “Try Something New” chart features apps new to the App Store. This recognition grants new entrants a leg-up in an industry where most apps desperately scramble for their five seconds of fame. As such, we expect to see a more level playing field, with downloads being more evenly distributed across all retail apps, no matter their size.
3. Retailers will have additional pressure to support Apple Pay.
In what should come as no surprise, Apple is leveraging its new genre to promote the Apple Pay digital wallet service. The Shopping genre prominently features apps supporting Apple Pay at the top of the category page, rewarding early adopters like Zulily, Kohl’s, and Staples with increased visibility.
We predict this visibility will create new pressure for retailers to adopt Apple Pay in order to secure their app’s rank, especially if competing apps have already made the move and were rewarded with a featured listing.
And there you have it—our three predictions for how the App Store’s new Shopping category will shake up mobile retail.
How do you see the new genre changing the ways retailers market their app and the ways consumers discover and evaluate new apps? Is this a sign of more specific genres to come?
Leave your predictions in the comments!