Apple’s new “Catalog” category raises more questions than answers for retailers
Apple’s new App Store “Catalogs” category promises significant potential for online retailers, but only if they can resolve questions around Apple’s sales tax and data policies, Nice Agency says today.
The new category – quietly introduced last week – provides a dedicated section on the App Store where online retailers can make their online catalogues available to users of Apple mobile devices.
Ryan Hall, joint Managing Director of Nice Agency – designers and developers of innovative cross-platform applications – said that most of the discussion about the new category had focused on a possible link to the iPad 3 launch, rather than on the practicalities of marketing and selling through the App Store.
“There is no doubt that customers are ready for mobile retailing, and the new category is a recognition from Apple that consumers no longer see apps solely in terms of music, gaming or video,” said Hall. “But at this early stage it is difficult to know whom Apple is targeting with this category.
“It’s unlikely that many large brands or retailers will swallow Apple’s 30 per cent sales tax on goods and services bought through the app store. Smaller brands may however benefit from the exposure and the chance to build users and make conversions quickly. But under Apple’s existing terms and conditions, selling through a catalogue on the App Store doesn’t currently look like being a money-spinner for retailers.
“Furthermore, the true value of mobile retailing comes not just from direct sales, but also from the large volumes of valuable user data generated,” continued Hall. “Apple’s policy is not to share this information, which retailers need to build profiles of prospects and customers, and which enables them to tailor and target their marketing efforts.”
Peter Dolukhanov, joint Managing Director of Nice Agency added that if “Catalog” were successful, retailers might lobby Apple to alter its terms and conditions to make the App Store a more profitable sales channel, this could act as a catalyst for change across the Apple application ecosystem.
“There is no doubt that the new Catalog category could be wildly popular with consumers, as it will give them a single portal for engaging with their favourite products and brands,” said Dolukhanov. The challenge for retailers is how to build a winning strategy. That will involve choosing between providing a brochure experience or aggregating products into an in-app store; whether to enable in-app purchasing, with the consequent tax-hit that this entails; and providing the sort of rich customer experience that consumers are used to from their mobile apps.
“But providing a great experience depends in large part on the data that you gather on customers. Given the potential rewards on offer, we might see more flexibility from Apple on its terms and conditions for retailers. If Apple makes marketing through the app store an attractive option for brands, they could take a huge step towards owning much of the mobile retail market,” concluded Dolukhanov.