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App Development, Survey

Mobile Apps and Small Business in 2016: A Survey

By Amanda Soderlund
April 12, 2016

Mobile apps are available for nearly every task imaginable. From predicting the weather to encrypted messaging, sharing photos with friends or requesting a personal driver, there’s an app for most imaginable needs. But how many of these apps come from small businesses?

For small businesses, creating a mobile app was not realistic even two to three years ago, when the cost to build a mobile app required the contract and commitment of a mobile app development team. However, with the rise of app development software and more specifically, app builders, small businesses can now easily make both consumer dedicated and internal facing apps with relative ease.

So, small businesses are beginning to enter the mobile app realm by investing in mobile apps to further engage their customers and to streamline internal business processes. With the various ways that small businesses can utilize mobile apps, the growing need for mobile-optimized information, and the accessibility of easy to use app building platforms, the stage is set for small business mobile app adoption. 

Slow Start for Small Business Mobile App Adoption

Overall, small businesses have been slow to adopt mobile apps. Currently, less than a quarter of small businesses have a mobile app and nearly a third are unlikely to build one. However, 27 percent plan to build a mobile app in the near future, and 22 percent are unsure, but still could be convinced to build a mobile app in the future. 

Small Business Mobile App Adoption | Clutch 2016 Survey

This slow adoption of mobile apps does not come at too much of a surprise especially since, in the past, building a mobile app meant spending an exuberant amount of both money and time. Additionally, for small businesses, building a mobile app has not been completely necessary for customer engagement or internal use. However, as more people turn to mobile devices for both personal and business tasks, mobile accessible information will become more of a necessity.

Future Looks Positive for Small Business Apps

As the practicality of mobile apps increases for small businesses, they will find that creating a mobile app is both valuable and highly accessible. So, while the percent of small businesses that currently have a mobile app is low, it does look as though small businesses will have viable reasons to turn to mobile solutions very soon.

In fact, the survey data does show an increase in small business mobile app adoption in the near future. Looking at the trend line of those who plan to build a mobile app, nearly half of the small businesses will be likely to have a mobile app by 2017 or later.

Small Business Mobile App Adoption Trends | Clutch 2016 Survey

Viktor Marohnic, the CEO of the app builder Shoutem, confirms this movement toward a stronger mobile app presence.

“We've worked within the mobile app market for ten years. I would say that a good percentage of small businesses don't even consider building a mobile app…. This view is changing fast, with more and more traffic coming from mobile devices. Three years ago, a small business might see 10 percent of its total traffic coming from mobile, but right now it's closer to 70 percent. Within the next couple of years, a shift to a mobile app or a mobile-friendly site will become obvious.”
Viktor Marohnic

With the rise of mobile, small businesses must find ways to become visible on mobile devices and to create mobile optimized interactions, in order to remain competitive. Zach Cusimano, the COO of the app builder Bizness Apps, contends that small businesses will turn to mobile apps to meet these needs.

“In terms of mobile apps, the stats show that mobile searches have quickly surpassed those on desktop. Mobile is the preferred method of using the Internet throughout most of the world, especially in developing countries. As businesses start to understand this, mobile apps will take more of a priority over websites, even mobile-optimized ones. Apps will reach a 50 percent penetration at a rate faster than websites, which have taken five to ten years to hit. Given the speed with which mobile has overtaken desktop searches, I estimate that apps will go over the 50 percent mark within two to three years.”
Zach Cusimano

While search volume and accessibility will have an influence on mobile app adoption, internal business needs and productivity could also contribute to the growth of small business mobile apps.

Praveen Seshadri is the founder and CEO of AppSheet, an app builder platform that specializes in building internal facing and productivity apps for business purposes. He bases his small business mobile app predictions on the adoption of these internal business apps.

“We believe we are seeing the beginning of a wave of mobile-centric reimplementation of internal business productivity tools and processes. It is the same wave we saw around the desktop in the 90s, and around the web in the last decade, just moving faster because mobile adoption is so widespread.”
Praveen Seshadri

Small businesses have the opportunity to utilize mobile apps for consumer facing purposes as well as for streamlining business processes and improving productivity. Given these vast possibilities, many of these industry experts predict that mobile app adoption will continue to increase in the near future.

To put future mobile app adoption in perspective, we further look at the types of small businesses that are currently building mobile apps and their reasons for building them.

Who are Building Mobile Apps?

Currently, the small businesses that have mobile apps stem from a variety of industries. The obvious adopters are those in the more consumer-facing industries.

“The main industries we work with are restaurants, bars, gyms, night clubs, realtors, religious services, and also professional services such as carpet cleaning and air installation. Any company that wants to engage with its clients on a deeper level, and wants to have their services available in its client’s pocket, is the type of business we work with.”
Zach Cusimano, Bizness Apps

“There are a few typical verticals, including restaurants, churches, small events organizers, car dealers, and stores, which want to build loyalty programs and keep their customers informed, and so on.”
Viktor Marohnic, Shoutem

While the businesses in the mentioned industries typically build mobile apps to appeal to their customer base, there are a variety of businesses that benefit from building internal apps as well. Praveen Seshadri explains who the 1,500 unique users are that sign up to use AppSheet every week.

“These users come from all over the world (about 125 countries), roughly 50 percent from the US. They are not just from small businesses, but also individuals and teams in larger businesses. Anyone who uses a spreadsheet is a potential user and in fact, almost all our users are already using spreadsheets or web-based forms, and are looking to go beyond the desktop/web to mobile devices. There is a broad diversity of the users and the apps they are building.”
Praveen Seshadri, AppSheet

With an assortment of different businesses building mobile apps, what are the reasons behind the movement?

Customer Engagement Encompasses Main Reasons for Building Apps

Overall, the main reasons that the majority of small businesses built a mobile app were to:

  1. Increase sales
  2. Improve customer experience
  3. Become competitive in a specific market

Small Business Reasons for Building Mobile App | Clutch 2016 Survey

These reasons are very understandable, especially when considering the advantages of creating a consumer-facing app.

“A good mobile app can facilitate quick checkout for a purchase, leading to an increase in sales. Customer experience amounts to simply browsing through an inventory, seeing what's available. An app can definitely improve that experience, compared to a mobile website, where the user has to login again every time they use it, provide payment details, and so on.”
Viktor Marohnic, Shoutem

Building on to these reasons, Zach Cusimano emphasizes the advantage of having a constant presence on a customer’s phone. A key benefit that other technologies, like a website, cannot provide.

“Cutting down the time in which someone can make an order or a purchase is a key factor. Having that ability in their pocket is much easier than visiting a business or going on a desktop. All of the reasons mentioned are key in seeing the value of a mobile app. Aside from those, if a business can convince someone to download their app, that person is essentially giving them a place in their pocket at all times. It's an extremely valuable concept which has never been a part of business outside of the last three or four years.”
Zach Cusimano, Bizness Apps

Further examining the website vs. mobile app quandary, there are viable reasons to invest in a mobile app alongside a website. A mobile app can offer engagement with customers that a website cannot quite match.

“A mobile-friendly website and a mobile app are both very valuable tools, but they have different purposes. A mobile website is fantastic for user discovery. If someone is searching for a restaurant in their area and hit their website through either Yelp or Google search, ensuring the site is mobile optimized will greatly increase the chances the user will visit the business in the near future. But mobile apps are separate tool best suited for user retention and engaging with clients. They're not aimed at random people finding a company's website, but are more about rewarding loyal customers.”
Zach Cusimano, Bizness Apps

Mobile apps can help build a business’s relationship with its customers, providing a more accessible, personal, and customer-centered experience. Beyond the customer-oriented reasons for building a mobile app, businesses can also benefit internally by creating an app for their own use.

The survey results show that 17 percent of the small businesses built a mobile app for internal reasons. What are some of the ways that a business can benefit from building an internal business app?

“By investing in a mobile app, businesses can take their most important tasks and put them into a mobile app, greatly increasing productivity.”
Praveen Seshadri, AppSheet

In addition to organizing tactical processes and increasing productivity, businesses can greatly benefit from building an app that progresses the way their business is run. In fact, industry leaders contend that the need for mobile optimized business solutions will propel the amount of internal business apps forward in the near future.

“We’ve found that small businesses in particular are eager to find ways to be more productive. Improving productivity is critical to their success. They are cautious in terms of spending before it is obvious that the returns are clear. However, they are full of ideas on how mobile technology can help them run their business better. As a tech community, we need to build tools that match their needs (easy to adopt, low friction, solves their problems, self-serve, no initial cost to try) and just drive awareness.”
Praveen Seshadri, AppSheet

If a business can build an app that solves various internal problems, and they can build it with an easy to use app builder at a relatively low cost, there are clear reasons for a small business to investigate internal app options.

Another reason for investing in a mobile app includes the mobile app specific features that websites, computer software, and other technologies do not offer. So, further delving into the specifics, what mobile app features are most useful to small businesses?

App Specific Features Invaluable for Small Business 

Survey respondents revealed what they deem as the most valuable feature of their current mobile app:

  1. Customer loyalty features
  2. Social networking features
  3. Push notifications
  4. Personalization

Small Business Mobile App Valuable Features | Clutch 2016 Graph

For customer-focused apps, it makes sense that customer loyalty features, social networking features, and push notifications are the most valuable. These features allow small businesses to better engage with their customers.

“Most businesses work on the 80-20 paradigm: 80 percent of business comes from 20 percent of their customers. It's important to engage with the clients that have the biggest stake in the business and are most likely to come back. Rewarding them through coupons or allowing them to easily make reservations, order food, get advice, contact the business (or vice versa, easily sending push notifications or geo-targeted coupons) is very important.”
Zach Cusimano, Bizness Apps

These features allow businesses to stay in contact with their customers in ways that were previously not available. In particular, businesses can personalize interactions and involve a plethora of customers through push notifications, location alerts, loyalty rewards, and easy access payment systems. As customers expect more features and functions to be available on mobile devices, mobile apps will only become more valuable to all types of businesses.

The mentioned features mostly highlight what businesses find useful in regards to consumer-facing apps. In terms of valuable features for internal business apps, there is a slightly altered list of features that focuses on improving productivity and streamlining business processes. Praveen provides a useful commentary on the ideal features for these internal and productivity business apps. 

“For internal apps there is a very different list of valuable features. The number one is that the app has to work offline. If people want control over their data, photos, and workflow, the app must do all of this offline and then synch with the backend.”
Praveen Seshadri, AppSheet

For internal apps, valuable features include those that contribute to the overall organization and documentation of business processes, while subsequently refining productivity. Other important features hinge on how the app can be created, including flexibility and cost.

“We’ve found that business owners want to design their app. So an app building platform needs a lot of flexibility without the cost and time that it takes to develop a custom app. The improvements coming are focused on allowing businesses to build apps as quickly and as easily as possible from spreadsheets.”
Praveen Seshadri, AppSheet

While the identified mobile app features vary slightly between customer-facing and internal business apps, what remains the same are the recognizable benefits that the unique features of mobile apps provide.

Conclusion

With a distinguishable need for mobile accessible information, small businesses are slowly finding ways to increase their mobile presence. While the majority of small businesses still have a long way to go in terms of mobile app adoption, the good news is that there are accessible ways for small business to build a mobile app.

Mobile apps provide diverse advantages to small businesses that other technologies cannot match. With the advantages and the easily accessible platforms available to create a mobile app, it looks as though it is highly possible that small business mobile app adoption will dramatically increase in the next few years.

Survey Respondents

Clutch collected this survey data from 352 small business owners or managers in the US. The largest respondent group is made up of companies with less than 10 employees and less than $1 million in annual revenue.

Company size by number of employees | Clutch 2016 Small Business Survey

Company Revenue in 2015 | Clutch 2016 Small Business Survey

To request additional information or to provide feedback on this survey, please contact [email protected].

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