How SMBs Have Changed Their Views on App Development

App development is a relatively new concept for SMBs—for years development projects have been more achievable for enterprise organizations, owing primarily to cost and time.

Cost, because software development isn’t cheap, and over the course of a project the bill can rack up pretty high. Time, because software development traditionally isn’t quick, with projects taking often over a year to get done.

Why then, have SMBs been changing their minds about app development, and why are we seeing more and more small and midsized businesses pursuing mobile apps for their organizations?

That’s what we’re going to be taking a look at today.

The App Development Landscape

As we mentioned, enterprise-level businesses have traditionally been the organizations that pushed for mobile app development.

These apps would typically be line-of-business (LOB) apps that served specific functions, whether it’s an app for streamlining a supply chain process or for automating order fulfillment.

In recent years, however, the scope of mobile apps, while still playing a large role in LOB functions, has become far more focused on improving the customer experience.

In layman’s terms, having an app for your business helps significantly in creating a more effective sales funnel from beginning to end.

Focus has shifted from the internal processes to the external processes, as organizations readily understand now that a great user experience is key in today’s market.

Smartphones were used in more than one-third of U.S. retail sales in 2018, including everything from initial product research to actually making a purchase. That accounts for more than $1 trillion in sales.

The end result of this is that all businesses, SMBs included, are now looking towards app development as a means to address customer needs.

The Supply

Of course, the elephant in the room here is that traditional app development hasn’t become any cheaper.

However, alternatives—most notably no-code and low-code platforms—have made app development a lot more accessible for smaller businesses than previously possible.

Low-code platforms mean that apps can be created through a service that requires very little traditional coding, instead using a drag-and-drop system where a near limitless number of functions and processes can be developed in a fraction of the time, often under six months.

If that might sound too good to be true, then the market for low-code is a good indication of how businesses are using these platforms in large numbers.

Low-code app development platforms have been rapidly growing in prominence over the last few years. The market was worth $1.7 billion in 2015—estimates indicate it will be worth over $27 billion by 2022.

SMBs are using these platforms to create apps in larger numbers than ever, with the market for low-code for increasing by a factor of over 15.

Customer-centric Approaches

As we mentioned above, mobile apps for the purpose of addressing external, customer-facing processes are in higher demand than ever.

This has been driven by changes in customer attitudes towards businesses, with higher expectations on what they desire from companies they do business with.

48% of shoppers have left a brand’s website and made a purchase from a competitor because of a poorly personalized experience.

For a lot of consumers, an optimized website isn’t good enough to provide the experience they need, and many are placing more value on personalized experiences than they are on solely economic decisions.

This has meant that businesses are having to respond by providing these experiences, which are most successfully delivered through native apps.

Age Divide

When we talk about the divide between SMBs and enterprise firms with regard to app development, it’s also important to note that among SMBs there is a significant gap between development in businesses depending on the age of the owner.

SMBs owned by millennials are far more likely to invest in a mobile app for their business, while SMBs owned by baby boomers are far less likely to have developed an app.

Fifty-five percent (55%) of millennial-owned businesses have a mobile app, compared to 13% of small businesses owned by baby boomers.

Businesses with younger owners have been quicker to adopt app development, likely because they themselves share much of the same predispositions as other younger consumers who show a preference towards mobile experiences.

This divide is not just reflected in external-facing apps, but also internally, too. For example, 53% of millennials don’t think store associates have the tools they need to provide great customer service, such as mobile devices for looking up customer profiles and recommending products.

More traditional businesses, though lagging significantly behind, are still making apps, and we can expect more adoption from them as they continue to recognize the competitive advantages of investing in app development.

How Will Approaches to Apps Develop in the Future?

Changes in approach to app development have largely been driven by two things: customer expectation and cost.

Customer expectations have always been high—as younger generations continue to enter the job market and make up a larger percentage of the consumer base—these will continue to increase as we get further into the new decade.

New approaches to app development and more affordable ways to engage with traditionally expensive development cycles for software have meant that it’s become significantly more accessible for small businesses, and we can expect more SMBs to adopt custom apps to meet the demand.

Takeaways 

• Mobile app development has typically been pursued by businesses that can afford long software development projects
• Customer attitudes and behaviors towards businesses have increased demand for more personalized experiences from organizations
• App development platforms have drastically reduced the cost and time to create apps and as a result are more accessible to SMBs, allowing them to take on projects without the risk previously associated with software development

Low-code app development platforms like Mendix are helping SMBs reduce costs, improve efficiency, and further the capabilities of their businesses by utilizing digital transformation techniques.

Learn more about our offering and discover how utilizing low-code development can help you get the software you need more quickly and without a sky-high price tag. Check out our offering!