If you are in the market for newborn apparel, you may hop online or on an app to buy from a national retailer like BuyBuy Baby. Or, you could visit one of its 126 brick-and-mortar stores. However, if you want to support an independent children's retailer you may think your only option is to go to the physical location. However, children's retailer Little Birdies Boutique in Washington, D.C., has an additional option that many small businesses are exploring — its own app. 

Of course, shoppers can buy their children's goods online, but Shanlee Johnson, owner and founder of Little Birdies Boutique, launched her store app to create another sales channel for the company.

"We developed the app … just to have another sales outlet to offer our customers a seamless shopping outlet," Johnson said. "[H]aving the phone in your pocket is convenient for our customers to pick up and use."

Mobile apps are essential for larger online and brick-and-mortar brands alike. Mobile shopping app use among U.S. consumers grew 70% over the previous two years, according to a 2019 App Annie report. The report also notes that retailers like Nike have used mobile apps to merge mobile and in-store experience, including reserving sizes in-store, tapping into rewards and getting help from in-store staffers.

But do small retailers actually need an app?

A 2018 survey of 351 small businesses found that 55% of small businesses owned by millennials have mobile apps, followed by 42% of Gen X business owners and 13% of baby boomers, according to market research firm Clutch. Twenty-six percent of respondents said mobile payments were the most valuable feature on their mobile app, followed by 24% who said social media integration as the most valuable feature, per Clutch's report.

Much like apps are a vital part of major retailers' omnichannel marketing strategy by remaining a key channel for reaching consumers, they can be a useful tool for acquiring and building relationships with customers. A 2018 Braintree report found that 58% of shoppers browse e-commerce apps or websites on their mobile phones, and at least 38% are doing so at least once a week. But small retailers shouldn't make an app solely to fit in with their small or larger competitors.

Mobile metrics matter

For Johnson, the app allowed her to pick up data points she wasn't otherwise able to glean from having a mobile-optimized website alone. Younger, "tech-savvy" customers, for example, tend to shop on the app, but grandmothers and other mature customers, as well as younger moms browsing during their downtime, made purchases via the website, Johnson said. 

"They're almost two different customers," Johnson said. "Our online sales are a lot of grandmothers and older customers and also younger ones as well — moms that have [time] between nap time and after kids go to bed [to] shop online."

Whether an app is worth the investment for a small retailer depends on who you ask. Before developing an app, small retailers should first ask why they need one, because an app may not be right for every retailer or small business, said Adam Halvorsen VP of sales for the U.K. and Europe at DMI, which lists ESPN, Victoria's Secret and Audi among its previous clients. Creating an app might not be the right move if, for example, your sole metric is an increase in sales. While that may be your end goal, you may need to take a look elsewhere for ways to grow sales before creating an app, he said. 

Small retailers should ask themselves whether the app will drive sales, function as part of their branding or engage with customers, Halvorsen said in an interview with Retail Dive. Understanding the fundamental purpose of an app can prevent small retailers from adding too many features, he added. He also explained that an app could increase personalization for each customer.

Echoing this, Johnson said developing an app allows retailers to send custom messages or push notifications to customers to remind them to come to the store and check out new products. 

"If you're trying to use an app as a sales tool, there are a few different components about why having an app will be better," Halvorsen said. "One of them would be a richer experience than your mobile site. One of them would be that you have an app store presence, so that's an additional way to generate traffic."

An app provides smaller retailers with more customer engagement metrics beyond likes or opens than other channels such as email marketing, Amazon or various social media apps, said Alex Levin, founding partner of L+R, which lists brands like Google, Unilever and Vice among its clients. That customer connection enables smaller retailers to gain insight into what their customers' needs are, which, in turn, is useful for future product development, he added.  

With an app, smaller retailers can also access other valuable metrics such as app retention rates, daily users and monthly active users, which allows retailers to understand churn and stickiness, L+R's digital transformation director Roberto Ranucci said. 

"Amazon does [ordering] really well and that's what they're focused on … That's not where these small businesses would compete," Levin said. "It's more of being aware of the person, capturing their hearts and minds is what a mobile application can do beyond any other type of digital experience that can scale."

Development questions

When it came time to develop the app for her store, Johnson said she found a company to help her develop her own product. She white-labeled the app, a technique which uses customizable templates to create it rather than doing so from scratch. 

With the app, customers can pay with Apple Pay or a credit card that's linked with their cell phone, making the checkout process seamless, she said. When a choosing template for the app, it was important that the app was compatible with Shopify. 

"We just wanted it to be a smaller version of our online platform," Johnson said. "It's very similar with the photos and the setup with the different collections."

In the software development world, Halvorsen said small retailers could likely find developers to create apps inexpensively, but "if you buy cheap, you typically buy twice." Besides investing in the strategy app first and asking potential users what they want out of an app, retailers should be prepared to spend a bit more to get things right the first time around. That also means doing due diligence in who they hire to craft the code if they're creating the app from scratch, he said. 

In addition to the costs to set up the app, Johnson added that she has to pay a developer a monthly fee to manage the app as well as fees to maintain it in Apple's App Store and Google Play.

Smaller retailers should also consider how their apps will integrate with their existing technologies, including their point-of-sale system, warehouse facility or distribution center, Halvorsen said.

"Where I would see a native app or App Store app having value in [the brick-and-mortar] context is to increase foot form, to add experience in-store, to increase engagement," Halvorsen said. "The offline to online world — there's probably more creativity and more areas that you can leverage a mobile app."

Cybersecurity should be a consideration for smaller retailers, too, Halvorsen said. Retailers should ask vendors terms of payment and compliance, he said. 

With an abundance of other retail competitors big and small, having an app is another way to stand out in an increasingly competitive online retail market, Johnson said. 

"Having your brand everywhere — as many places as you can put it — it helps," Johnson said. "Having it as an option from the website, you're retaining more customers."