E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
Free is a good price for many mobile consumers.
Which is the better deal? A 99-cent mobile app or a $1.99 one? The answer is neither—give me the free one. It seems I’m not alone in wanting no-cost mobile apps. In the “2011 Mobile Consumer Report” from Experian Simmons, of the 16% of 24,722 adults surveyed between February 2010 and March 2011 who downloaded a mobile app, 87% downloaded a free one.
The number of consumers downloading a mobile app drops once a price is set. Of those consumers who have downloaded a mobile app, 46%said they paid between 99 cents and $2.99 for an app. As the price goes up, the number of buyers shrinks. Only 20% said they had downloaded an app priced between $3 and $9.99. And if the app cost more than $10, only 4% made a purchase, the survey finds.
While retailers are not likely to charge consumers to download mobile apps, this is an interesting insight into the frugality of consumers, myself included. For example, I’ll download a gaming app because it’s free only to later find out that to get full functionality I have to make in-app purchases. Right away, I close the app and delete it. That’s what I like about mobile apps from a retailer. You know the game going in. There are no surprises. Retailers don’t charge 99 cents to view the image of an item, doling out bits of mobile functionality one in-app purchase at a time. Consumers get as much, and sometimes more, information about a product as they need for free.
A retailer, whether in a store, via an e-commerce site or through a mobile commerce site, knows that consumers are careful with their money. Macy’s isn’t going to charge a $5 fee to enter one of its department stores because it wants consumers to spend their money in the store. I’m glad mobile commerce retailers are doing the same.