Last month Myntra, the largest online retailer in the fashion & clothing segment shifted to an app-only platform shutting down its mobile and desktop websites. This move drew mixed reactions from industry experts and consumers, with some calling it immature or too bold while others appreciating it as a justified move with long-term gains.
According to official statements made by Myntra about 95% of their internet traffic and over 70% of their sales comes through the mobile platform. With around 90% of Indian smartphone users i.e. 158 million people using apps, the country ranks second only to the US in the usage of shopping apps and the number of smartphone users in India is expected to touch 600-700 million by 2020 which Myntra hopes will serve as a base for creation of an inclusive market for fashion shopping.
Other than these future prospects shifting to an app-based platform has other benefits too which Myntra is most likely aiming to exploit.
Apps are a good way to reduce operational costs- Multiple players and low profit margins or rather no profits at all require the companies to reduce their operational costs to a minimum level. This can be achieved through apps as apps reduce the requirement of technical support and personnel, advertising on search engines, server load etc.
Apps have higher customer retention- Customers get an overview of a company from multiple sources in a random net search and generally go for the one offering the lowest price along with this most of the promotion activities as well as unique features on the website go unnoticed. However apps work exclusively for a seller as they have more control and a customer using an app as compared to a random online search is also more likely to make a purchase. Other than this the customer can be informed about various promotional deals and activities through push notifications.
Apps break monopoly- When customers make purchases through search engines the visibility of a product or retailer is dependent on the policy of the search engine companies which sometimes leads to situations where the product does not show up in the search altogether. This can be a real problem incase major search engines such as Google start their own retail services or get in partnerships with competitors. Apps serve as a way to fight back in such scenarios.
Apps provide personalized services- Companies through apps can collect valuable information about the preferences of customers and when they have sufficient data it can used to cater to each customer in a personalized way. Personalization initiatives by Myntra such as style solutions by stylists, look-good tips, curated offerings by multiple brands are all a part of making the customer experience more personalized & seamless.
After looking at all these factors one might think that moving to app-only platform is a feasible decision. The numbers however tell a different story, on the iOS platform Myntra was among the top 10 downloaded apps till May 15 but after this shift its rank fell to 26th. On Google Play the app was on the 50th position before the app-only move after which it momentarily climbed to 36th after which it again fell back to 50th position.
The probable reasons for this development are-
Interface- Mobile has serious screen size restrictions as compared to pcs, which in turn affect the customer experience as customers generally like to view the products on a bigger screen to get a better idea of the look of the product.
Effort- Downloading and installing an app and then getting used to its interface might seem too much of a task for customers who are not looking for multiple or repeat purchases at that point of time. This in turn might drive the customers to competitors who are retailing through websites.
Comfort Level- Myntra most probably counted on its loyal customers to continue their association with it even after it moved to an app-only platform however, the problem here is that there is a possibility that some customers especially the middle-aged people might not be comfortable with mobiles and prefer online websites.
Network Issues- The speed and consistency of mobile internet networks in India have still not matched that of broadbands thereby making shopping through them a bit unreliable and less favorable. This can also act as a hindrance in the seamless overall customer experience that Myntra aims to provide.
The current situation however might not be a good representation of future scenarios. With the mobile internet services expected to improve, mobile phone penetration levels set to rise further and people likely to use their mobiles for day to day transactions in the near future we might just see Myntra’s strategy paying off.
So right now it is too early to declare the move as an excellent or bad one but if Myntra can overcome these problems and make customer experience hassle-free then there is a very high possibility of its competitors following suit.
Tarang is a student at SSCBS, DU. The views expressed are his own based upon the analysis and research he did on the topic from various books, reports and web articles. He regularly writes for Corporate Monks as a research associate. The writer takes person responsibility for the ownership of the content shared and incase some sources have not been given credit, you can directly mail him email@example.com