The App Industry—Is It for Us?

It’s been nine years since the launch of the famous Apple App Store. Needless to say, a lot has changed since we first heard Apple’s pivotal ad campaign motto “There’s an app for that.” What started off as novelty items—simple time waster games, and clever ways to use your iPhone camera’s flash as a flashlight—have grown into critical parts of the world’s economy and digital infrastructure, an integral aspect of day-to-day life, and booming billion dollar businesses.

Apps have integrated themselves into nearly every aspect of our lives; we use them for directions on the road, to find places to eat, to find a place to sleep, to find old friends, to adventure in foreign lands and to navigate through the ever-expanding world of content media. The app industry has come very far, and very few industries are able to grow as quickly and dramatically. Let’s take Evan Spiegel’s app Snapchat as a case reference. In May of 2015, users downloaded the app 13 million times and in the month of May 2016, that number doubled to 27 million.

When Apple first launched the App Store, there were about 20,000 apps. Today, there are about 4 million apps available to consumers. The entire app industry generates some $56 billion in revenue and that number is projected to hit $77 billion in 2017. Globally, the mobile phone market and the app market are growing and are likely to continue to grow.

Apps are also the reason why we no longer carry around our plastic loyalty cards for grocery stores and pharmacies. Most businesses have caught up to the fact that loyalty programs allow for them to nurture and connect with the consumer. By analyzing customer purchase patterns through the app, businesses can send them the right offers at the right times. Statistics show that fully engaged customers, also known as brand ambassadors, deliver a 23 percent minimum over the average customer in the share of wallet, profitability and revenue. Even if you have doubts about mobile loyalty programs, 86 percent of marketers ranked mobile loyalty campaigns as very effective.

This brings us to our main question, “Is the App Industry a good fit for 7-Eleven?” Well, the answer is yes, very much so. I fully acknowledge that the app space is crowded, however, apps developed using energy, attention and financial resources are proven to be effective. And there is no reason that our 7-Eleven app could not be developed with the same intentions. Many franchisees have given feedback into the development of this app, and many changes are being made to the app as a result of those recommendations. Even though it seems like a long road ahead, we can only achieve our goals by working together on this. There will be challenges, but there are hardly any businesses without them.

Starbucks Corp, a pioneer in getting consumers to pay for products with a mobile phone, added a feature in 2015 that lets customers order and pay for beverages in advance and pick them up without waiting in the cashier line. Now, 21 percent of transactions in company-owned U.S. stores come from the app, along with its fair set of challenges. In Starbucks’s case, as mobile orders and pay became popular, operational challenges came hand-in-hand, such as congestion at the hand-off plain due to high volumes. The congestion resulted in walk-in customers not making a purchase due to the heavy rush, impacting comparable sales negatively. Starbucks Corp, however, has been working relentlessly to improve the app and to resolve the operational issues. As should we!

It’s imperative that we (franchisees and corporate) get to the depth of challenges with our 7-Eleven app. I realize that a ton of feedback will have to be provided by franchisees and a ton of work will have to be done on corporate’s end, but it’s a necessary evil as the app industry is only going to get bigger and bigger.