Posted: July 9, 2012, 9:55 AM

Q: How much money are retailers spending on mobile apps?

How much money will retailers spend on mobile apps for their business?

Asked by:

A: Many retailers are spending $25,000 or less.

The price for a mobile commerce app can range significantly depending on the features and functions a retailer wants to include. University Co-op Society built its smartphone app for a price tag in the low five figures plus a monthly fee to its vendor. This is generally the low end for app development costs, though there are some vendors that will create a highly templated app with a mass-produced feel for a bit less. On the other end, Jewelry Television built its smartphone app in-house for $250,000. The app is very robust and even includes live streaming video of TV programming. This is a typical high-end cost, though some very large retailers have spent even more to include such things as image recognition technology and one-click buying.

 

Following is the size of 2011 m-commerce budgets for retailers according to an Internet Retailer survey in October 2011: less than $25,000, 41.9%; $25,001 to $50,000, 11.6%; $50,001 to $100,000, 14.0%; $100,001 to $250,000, 11.6%; $250,001 to $500,000, 11.6%; $500,001 to $750,000, 0.0%; $750,001 to $1 million, 2.2%; and more than $1 million, 7.1%. 68.2% of retailers planned to increase their m-commerce budget in 2012. Following are the planned increases: 1-5%, 13.8%; 6-10%, 17.2%; 10-20%, 27.6%; 20-50%, 24.1%; 50-100%, 6.9%; and more than 100%, 10.4%.

 

With 41.6% of retailers having a mobile budget of less than $25,000, it's clear most retailers in m-commerce today have started out with a mobile commerce web site, which is by its nature less expensive than a mobile app. But with so many retailers planning significant increases in their mobile budgets, they may be making room for an app in their plans. Investing $25,000 in a sleek smartphone app with some frills and thrills can be just the thing for a small to medium-sized retailer with loyal customers likely to download an app and use it. Frankly, $25,000 these days is a drop in the bucket when it comes to technology investments. Smartphones make up half of all mobile phones in use, and that number is rapidly rising. The smart money's on mobile.

Bill Siwicki

Managing Editor, Mobile Commerce

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