No, I'm not going to install your freaking app!
Let's face it, "progressive web apps" sound about as thrilling as a Powerpoint training course. But PWAs may present an answer to mobile app fatigue - while reducing the app development sinkhole for companies.
PWAs fit into the context of key retail trends Sheldon is monitoring. So, in no particular order, let's run through them.
1. Digitalization of the wholesale channel
Magento's retail customers are investing heavily in the digitalization of wholesale. Sheldon:
That may not seem very sexy on the face of things, but it's actually very strategic, and a huge driver of efficiencies.
Now that retailers have modernized their direct-to-consumer channels, the legacy experience of wholesale ordering is a drag:
A lot of retailers are supplying through distribution channels to their wholesalers and to independents that are franchisees, or retail outlets... It's still quite an antiquated process.
What's the best way to modernize wholesale? Pull it into your e-commerce investment:
We're seeing quite a big trend of retailers wanting to leverage their existing investment into their e-commerce site to also make it a B2B ordering portal. So, I can go to the website and there's a log in button for me; as a wholesale distributor to log in and place my orders.
2. Innovation in delivery
Under pressure from the Amazon distribution machine, retailers are compelled to raise their delivery game:
Obviously everyone is trying to compete with Prime as a delivery mechanism. Ultimately people shop with Amazon is the convenience of getting their product quickly, and for free. We're seeing a lot of our merchants pursue a set of new innovations.
Working with multiple carriers... Now a lot of our online merchants have many, many different shipping relationships. Using our order management platform, we'll figure out, in real-time, not just who's the cheapest carrier, but what carrier can get this product to the merchant same-day or next-day.
3. Sophisticated inventory management and order fulfillment
Retailers are getting more savvy about maneuvering their inventory. Yes, that might mean working with their old frenemy, Amazon:
Our customers are leveraging drop shippers, holding inventory in multiple environments, potentially having some inventory with Amazon themselves. You might buy from the brand's website, and it actually gets fulfilled from the Amazon warehouse, because Amazon has 48 warehouses across the US.
Sheldon raised the possibility of in-home delivery when we are out and about:
If we can look into the future a little bit, if the delivery person can be securely granted access to your house, and can unlock your front door, and leave the delivery inside your porch instead of outside on your porch, that actually solves (almost) the last remaining barrier to the adoption of e-commerce. It just requires a little bit of social acceptance and the right security protocols in place to allow people to do that. Everyone's moving to home automation anyway.
I think it'll be pretty quick, the adoption of home automation for the locks on our front door. All of the carriers - not just Amazon Key - but everyone having secure access to that.
Which brings us to progressive web apps:
4. Mobile-only commerce and PWAs
No, not mobile-first design, but mobile-only. The heck with the desktop. But how will that work, given that adoption of mobile commerce still lags mobile traffic?
We track a lot of the stats over the holidays. Consistently what we've seen with our merchants is 60+ percent of total web traffic came from mobile, but only about 30 percent of orders came from mobile. We've still got this challenge that the conversion rate of mobile is not where it needs to be.
So-called "responsive" mobile apps didn't help nearly enough:
It's not a great experience. It's actually fairly slow, it's clunky, it can be a little frustrating compared to a mobile app. A mobile app is an incredible experience. It's very fast, it's very slick.
But what about the "I'm not installing your freaking app" problem? Sheldon believes that building your own app is not realistic, but for a different reason:
It is not realistic at all, in fact it's impossible because of costs.
High quality app development - and maintenance of that app - is out of reach of many retailers:
If you're Walmart, Amazon, Home Depot, you're going to have an app, and you've got a really engaged consumer that's going to use that app. For those companies, the conversion rates on their native apps are better than desktop because it's just a phenomenal experience.
But imitating that success doesn't necessarily work:
Device-specific functionality is great, but it may cost tens of millions of dollars to build. You need a full time development team constantly updating them. They're getting updated daily. You've got to have two completely different dev teams for Android and iOS.
Consumers won't load their phones with occasional apps:
To your point, the consumer's only going to install an app if they have a very frequent brand interaction. Mostly they're using Facebook and Instagram, but they will install a Home Depot or an Amazon app. But for a store they only buy from once or twice a year, they're never going install that retailer app.
And that's where progressive web apps come in:
Progressive web apps are going to completely reinvent and reinvigorate mobile shopping.
A lofty statement. Why?
Because what a progressive web app does - it brings all the benefits of the native application, speed, performance, the page never refreshes, it's just very, very interactive.
It removes all the problems of that mobile browsing experience and it's gonna have a big impact moving conversion rates up on mobile.
And yes, PWAs can pull in just about all the device-specific features, including GPS and push notifications. The cost and effort of maintaining apps is a lot more manageable if you don't have to push constant updates and support legacy versions. Big players are buying in. Twitter and Starbucks are investing, and Google is a big PWA proponent. Yes, the retail giants will keep their native apps. But Sheldon sees everyone else going to PWAs:
It's starting in earnest already.
My take - messaging and commerce may be the ultimate winner
There's another model to consider, one that has caught on in Asia via WeChat: commerce in the context of a messaging environment. From ride sharing to food delivery, integrating commerce and chat into one trusted platform - aided by shopping bots - might be a more compelling model than a collection of mobile and progressive web apps. Facebook has dipped its toes into this via Messenger, with mixed results. But what does Sheldon think?
In China and other Asian countries, that is where it's going. The west is actually so far behind. In Asia, they only shop on mobile devices; they're not using desktop devices at all. They've evolved to that sort of contextual messaging you're describing, as well as voice based search and voice based purchases.
Progressive web apps have gotten a boost from countries like India as well, where download rates can be expensive and the prospect of downloading apps onto phones is too data-intensive. But there is still an app proliferation problem, PWA or not, exacerbated by consumers consolidating their time onto walled garden megasites, sticking with a handful of apps.
The irony, of course, as we're learning well from Facebook these days, is that trust in megasites may be misplaced. But then the data breaches across the web don't inspire confidence in direct retail business either. On the other hand, if people begin to think of e-commerce less in terms of Amazon, and more in terms of "which retailers will use my wallet easily" (e.g. Apple Pay or Google Pay), then it becomes about the wallet and not about the app.
One way or the other, companies will have to invest heavily in user experience and design chops. Which brings us to a final bonus "disruptive" trend from Sheldon, which is: in the B2B world, manufacturers are starting to bypass the traditional distribution chain.
Home construction is a classic example, where manufacturers don't historically deal with consumers. But that's changing fast now. Something tells me there will apps for that as well. Whether they will get traction remains to be seen.