Shopping Trend: Retailers Find that Consumers Prefer Apps to Websites

By Karla Robinson
November 22, 2011

• New iPad apps are rolling out this holiday season to entice the eight percent of online shoppers that own tablets.
• That percentage may seem small, but Forrester Research found that 60 percent of tablet owners use their devices to shop and many prefer them to smartphones or computers for shopping. For clothing company Anthropologie, iPad shopping accounted for six percent of sales this year and is expected to rise to 20 percent with the introduction of their new app.
• These new apps aim to provide a more interactive experience and capture some of the in-store essence by revamping their electronic catalogs and adding new features to their shopping pages.
• Revel Touch has built apps for multiple companies including functions like a “virtual dressing room,” that allows users to create outfits and the ability to share choices on social networks. Apps allow tablet shoppers to zoom in, see videos and find the sizes they want with ease.
• “You can bring the objects to life on an iPad and you can’t do that on paper — and you don’t have to chop down a tree,” the CEO of Catalog Spree told The New York Times. The company also reported that, on weekends, its users spend almost eight times as long on the retailers’ app as they do on the retailers’ Web sites.

Risk-Taker: Amazon Betting Big on Prime Customer Loyalty Program

By Karla Robinson
November 16, 2011

• Amazon is willing to lose hundreds of millions of dollars annually on the Amazon Prime customer-loyalty program because of the increased consumer spending it creates.
• “The cost of Prime underscores the willingness of Amazon Chief Executive Jeff Bezos to shell out money as he continues the company’s transition from an online retailer of paper books, to an Internet megamall that sells an array of products from various companies, to a seller of digital goods and even its own devices, such as the Kindle Fire tablet computer,” reports The Wall Street Journal.
• “[Fiona Dias, VP of rival service Shoprunner] estimated that after joining Prime, members tripled the amount of money they spent on Amazon to $1,500 a year,” the article indicates. “She estimated up to 40 percent of Amazon’s domestic revenue, which totaled $18.7 billion in 2010, comes from Prime members.”
• Some investors look unfavorably on Amazon’s subsidizing (the company loses $90 a year on each Prime subscriber and sells each Kindle model at a loss of $10+), but analysts say the costs are offset by Amazon’s profitable website.
• Prime will be offered free for 30 days on the new Kindle Fire.