How To Purchase A App For Your Website

Getting your own mobile app: Buying vs. Building

The stats show having a mobile app is the prudent choice for many retail businesses, to drive e-commerce revenue and customer loyalty. This article looks at the pros and cons of buying and building mobile apps.

Most medium and large liquor retailers we meet with are considering mobile today, and for good reaso n . With 43% of consumers choosing to purchase on their mobile devices now, and success stories like Starbucks Mobile ($1B in mobile order ahead revenue 2016), 38% of businesses plan to launch an app in 2017, according to Business Insider.

Between those stats, and the fact that native mobile apps convert to sales 300% better than mobile web and have 34% higher average cart values, there is no question that every retailer needs a mobile app strategy today. The question becomes: "should I buy or build an app?"

This article takes you through some of the factors that go into that "buy vs. build" decision. But here's the warning — it's not fluffy. The intended audience for this article is someone technical and/or product oriented (CIO, CTO, VP Prod, VP Eng) who is evaluating building vs. buying a mobile app. For others, it might be a tad boring!

Before we dive into the details, the executive summary is that building your own app gives you control over the user experience and ownership of the code, but is likely to cost you an order of magnitude more than you think and take 3x as long to develop your Minimum Viable v1.0 Product. Buying from a liquor app platform provider, like Drync, can save you hundreds of thousands of dollars and years of time while letting you get in the mobile game to begin experimenting, and gives you a partner with years of industry experience and know-how. While this conclusion is obviously biased, the article below presents both sides of the story equitably.

Whether buying or building your app, you need to define what you want ahead of time — your must have features and your wish list. You start by sitting around a table with your brightest minds and you develop your "MVP" (Minimum Viable Product aka "table stakes") list of requirements that your app must have to launch.

The list below was our MVP list and was based on conversations with literally hundreds of liquor retailers large and small. Your list will differ slightly or significantly. But what we're aiming for here is directionality. And I will boldly suggest that all top notch liquor retail apps are going to require a similar MVP feature-set, amount of effort, and dev duration.

MVP app feature list for a liquor retailer

Here's the game we play on our product team. Putting ourselves in the end customer's shoes, we say "as a customer, I want to:"

Log in as I do on the web with email and password, or sign up for an account
Browse the product catalog by category, region, sales, varietal, popular, etc.
Text search for products
Locate a store
Receive and view the same offers shown on our website
Store favorite items so I can re-order; I should be able to easily re-order
See quality product images and accurate product data, expert ratings and reviews
View discounts on each item, and receive the same discounts offered in the store e.g. case discounts, buy X of Y and get Z, etc.
Enter and have the app store my shipping and billing addresses, credit card info, and have the cc info stored and transmitted securely
View my cart, make adjustments to quantities, address, shipping speed, etc.
Redeem promocodes
Get a final total including discounts then checkout and pay with CC, all without leaving the app
User Android and iOS phones and tablets

Now, let's then consider the "back end" server side software that needs to be built to support the above features. You will need:

Basic POS integration to download inventories at least once a day to the app (really to a database that services the app)
Web portal to manage all the featured items, curated lists, promo codes, discounts
An order management portal that enables fulfillment, refunds, alterations, and initiates capturing funds once an order is 'ready'
E-commerce gateway integration (such as Braintree, Authorize.net)
Robust search capabilities with nightly indexing
Full featured API for interactions with the mobile and web apps
POS integration (bi-directional — download inventories, upload orders)
Discounts engine that honors discount codes from the POS and calculates discounts on the fly
Promocodes engine that supports promocodes entered by customers in the app and calculates discounts on the fly (btw — there are many many basic criteria for discounts and promocodes — too many to list)
User account management and/or integration with your website account management system. If you don't have a website, then a user database must be created and integrated
Mailer integration and transactional email and push messaging ie. Welcome email campaigns, order status, receipts, etc.

One (of several) elephants in the room is data. All of the above assumes you have a database of all your products, including high quality bottle or label images, region, varietal, style, type, ABV, etc etc. While innocuous sounding, data ends up being a critical component of deploying a quality e-commerce site or app. Poor images, mis-named products, missing product information and expert reviews, duplicate entries, and/or missing packaging information, will cause your app experience and sales to suffer.

Beyond the basic must-have features and functions above, there are many nice-to-have's:

Onboarding tutorial teaching the basics of the app
Apple Pay and Android Pay support
Loyalty program support/integration
Audience segmentation ie interface and queries to pull out lists of users based on criteria
Send push notifications to audience segments
Support for flash sales
Tight inventory level integration with POS
Barcode and/or label image scanning
Gifting
Local delivery and fee system
Facebook/Google login
Allow customers to rate products, and then show customer ratings for each product
Support for events having a unique set of products where products are fulfilled at the event, or out of a separate location/store

Each of these features is a substantial project and beyond the scope of this article.

Building your app

No doubt there are real advantages to build any piece of technology yourself.

Here are a few:

Back-end integration — by owning all of the infrastructure, your app can tie directly into your back end infrastructure, including user accounts, payment systems, analytics, database, ERP/POS, etc. Consumers get the benefit of being able to use a single login whether logging into your website or mobile app, and seeing consistent data and presentation across digital channels.
Control over User Experience (UX) & branding — developing your own app gives you control over the visual design and the user experience. With this under your control, you can create a consistent, both in terms of flow and branding, experience. A true omnichannel buying experience should have as much consistency as possible across your various channels, whether store, web, or mobile.

Both great reasons. So let's take a look at the details of building your app.

COST OF BUILDING

Rather than estimate the project above, let's first use a data-driven approach to estimating your MVP. , I'd like to pass over an article I came across after writing this article -https://medium.com/swlh/how-long-does-it-take-to-develop-a-mobile-app-77574df9d18d. To sum it up, a reasonably complex app takes 3–5 months to build for the "MVP". In my experience, that's directionally correct. While the article doesn't mention the exact resources required to achieve this timeline, if we a general cost/sprint-week, we can come up with a number (cost).

It is important to note that this estimate is for the first version of your iOS product. You also will need to create your Android version, and your back end admin portal. Also, I use $10K/sprint-week. This is a fairly standard rate, if not on the low side (I've seen $15K/week recently) from the top US-based software development firms.

That said, for the MVP iOS version, here is the calc:

(5 person-months) X ($10K/sprint-week) X (4 weeks/month) = $200,000.

Now add another 40% for Android development:

(40%) X ($200,000) = $80,000

Swagging, let's assume the back end supporting software and API, admin utilities, and CMS (content management system) take the same amount of development as the iOS app ($200K).

So for your v1.0 MVP, you're looking at $560,000 and probably 6–8 months elapsed time (including iOS, Android, and back end development), assuming you can parallel track some of the work. These may seem like unnaturally large numbers, but this is the cost of a quality app that people will actually try and then use again. Without knowing the details, my guess is the notable apps in the liquor space — Bevmo!, Binnys — cost at least this much to get to an MVP they were comfortable with (note that these apps today are 2–3 years and many iterations into the process at this point). For the Drizly's of the world, the number is significantly higher.

Last on "costs" I'll suggest you browse this excellent article by the amazing @nhglass on what it took Panera to develop and launch their digital ordering platform (HINT: $42M). Not the exact use-case of ordering alcohol from a retailer's app, and developed over several years, but it highlights that real digital ordering apps can be expensive to develop.

OUTSOURCING DEVELOPMENT OF YOUR APP

You get what you pay for. For sure you can find mobile development firms that will quote you $15K-$60K and 2 months development time to build an ecommerce app for your store. I have talked to at least 15 retailers who had similar quotes in hand or had already gone down the path. In each case, after his missed deadlines, the project was canceled or the retailer launched a substandard app that only a handful of customers used after downloading. Between project complexity, scope creep, unmet expectations, communication issues with the developer, and missed deadlines/budgets, these lower-priced, outsourced projects inevitably fall short.

"Buying" an app

Buying a "White label" app platform and customizing it to your store takes the heavy financial risk of building out of the equation, and enables retailers to focus on their business rather than developing and maintaining software. In some cases (like with Drync), the developer has spent years and millions of $'s building a robust and flexible platform that offers most/all of the features you are looking for, has a beautiful, effective shopping experience, and that integrates with your POS "off the shelf."

Possibly most important is that buying an app lets you work with a provider with domain knowledge — an industry insider who knows beverage alcohol inside and out and who has learned the nuances of the alcohol space (and there are a lot!).

Last on the PROS side — product updates. Product updates often cost as much as the initial development and must be performed if not monthly then quarterly. When you sign up to work with a mobile SaaS platform, you will get product updates for free. This is actually huge! You get the benefits of keeping up with new operating systems, innovative features, plus reporting and insights that come with product enhancements.

Another PRO of working with an top white label app platform they will also offer you mobile marketing services. This topic is worthy of another post, but suffice it to say, marketing a mobile app is not simple. You need a blend of customized digital and non-digital "campaigns", from in-store signage and education to App Store search ads and targeted email campaigns, all designed specifically to drive your audience to download your new app, buy, and engage through the platform. Tricky stuff requiring an on-going marketing effort.

The CONS of buying:

Customizations. Most off the shelf white label platforms allow customizations to show your brand, logo, colors, and products, but they will stop short of offering a completely tailored interface. If you have a website, this might mean your web and mobile user experiences will differ. In some cases, you may be able to pay the developer to create a completely customized app for you that still integrates with their back-end infrastructure.
New accounts required. Typically working with a white label platform means that login and account information (user logins, data) must be kept separate from those collected on your website. In some instances, the platform developer may be willing to do a tighter integration with your online accounts and database, for a fee.
Timing on requests/fixes. Inevitably most retailers find issues or have feature requests that are very reasonable, but need to get slotted in the development backlog. Some fixes are quick and can be turned around right away, others take months, and some requests may be rejected by the developer because they do not believe other customers will buy/want it.

COSTS OF BUYING

In the beverage alcohol space, there seem to be two types of players making mobile SaaS (software as a service) white label platforms — those targeting smaller (<$5M in revenue), single store liquor retailers and those targeting larger players.

Platforms that specialize in servicing smaller retailers often give the platform away for free for some period of time and then charge monthly as a percentage of sales. These platforms often do not integrate with your POS at all, provide minimal support when onboarding, and instead allow you to manually upload a file and self-manage inventory through a web interface. Some offer light, one-directional POS integrations that simply take in updated inventory levels. Typically these systems do not gracefully handle having multiple store locations, and don't offer many of the features above, for example automatically reading discount codes out of your POS. Last, some of these players do not match your products to their internal database to provide your users with a rich set of product data, images, user reviews, and expert reviews for each product.

The larger and more robust platforms (like Drync) specialize in deeper POS integrations, are highly scalable and capable of processing a large number of transactions, are designed for multi-location businesses, have customizable modules for shipping, local delivery, and pickup, and offer flexible reporting for end of period bookkeeping. They typically offer a suite of analytics and marketing tools that let you market to users through the app and visualize various aspects of usage, sales, and performance.

The costs of buying from one of the smaller players will typically be around 5%/order, so ranging from $0/month to $150/month per store.

The cost of buying from the larger players will typically range from $250/month-store to $600/month-store, depending on "extra's" you buy. ROI for this investment is typically 25 app orders per month.

Partnering with Drync

In the self-serving department, let me share a bit about Drync and how we work.

Retailers who use the Drync platform for their mobile ordering and loyalty apps, tap into nearly 10 years of mobile app development and expertise specific to beverage alcohol commerce. By subscribing to the service, they not only get their own app, but reap benefits of constant behind the scenes software development to take advantage of the newest technologies. Drync has created apps for the beverage alcohol space that have generated over 2 million downloads and hundreds of thousands of monthly active users. We specialize in building apps that convert shoppers to buyers at extremely high rates (some of our customers see 25% of their downloads turning into buyers, as compared with 3–5% on their websites). See a recent case study we wrote with a retailer in NYC.

Drync also has a digital marketing team that helps our retailers market their apps across channels to generate downloads and drive transactions and engagement. And importantly, because this is the store's own app, the retailer owns the customer, messaging, sales, and data.

Give us a shout at: sales@drync.com or @drync on twitter.

About the Author
Brad Rosen is the CEO of Drync, a mobile commerce and loyalty platform for beverage alcohol retailers. www.drync.com