Take a Bite Out of Apple's Apps

When Apple CEO Steve Jobs announced the launch of the iPhone (www.apple.com) back in January 2007, applications were an afterthought. The phone came installed with traditional smartphone functions, such as a calendar, e-mail, and an address book, but the ability to install functional and productive tools was a blip on Apple's radar.
Then something awesome happened. In February 2008, Jobs released a software development kit to the general public, allowing any Tom, Dick, or Hilton to try their luck at making an iPhone application. Within weeks, the Apple Store was flooded with hundreds of apps ranging from the wonky (the Zippo lighter app) to the extremely useful (Google Maps and various banking tools).

In November, Apple announced that the number of applications available in its App Store hit the 100,000 mark. As of press time, iPhone owners worldwide have downloaded more than two billion apps. With those kind of numbers, it just makes sense that the hospitality industry should jump on the bandwagon. Not surprisingly, a handful of companies already have.

"We are targeting an evolving customer who is relying more and more on the usage of their mobile phone," says Baron Concors, chief information officer at Pizza Hut (www.pizzahut.com). Pizza Hut currently offers what is arguably one of the most successful food ordering iPhone apps to date. "We wanted to take advantage of the capabilities of the iPhone, whether it was the GPS location service to locate the nearest Pizza Hut, or the [touch screen] feature that allows the customer to make the pizza larger or smaller or add toppings. That's the kind of innovation that makes an application for the iPhone more exciting than using a Web site on your cell phone."

In August, Chipotle Mexican Grill (www.chipotle.com) raised the bar on food ordering when it added its app to the Apple App Store. Through it, iPhone and iPod touch users can place and even pay for food orders directly from their device. Orders are highly customizable through the tool, with such options as "easy on the beans," and users can save their preferences for easy burrito buying the next time a craving hits.
"The iPhone and iPod touch give us powerful new ways to engage and serve our customers. While we have always made our high quality food affordable and accessible so everyone can eat better, we've probably never been this accessible," says Steve Ells, founder, chairman and co-CEO of Chipotle.

The app was developed by a collaborative partnership between Chipotle's internal IT team and Pervasent (www.pervasent.com), a Berkeley, Calif. firm that develops mobile applications; it was designed by the San Francisco-based interactive design and branding firm Sequence (www.sequence.com).

What makes the iPhone so great? It turns out it might not be the actual phone, but the applications. Any smartphone can tell you what appointments you have today, but few can get you to the nearest hotel based on your real-time coordinates, allow for a highly-customized burrito, or order you a pizza. "It's one of those things where the apps and the app store is the real 'killer app' of the iPhone," says Christopher Brya, director of user experience and e-commerce projects at Choice Hotels (www.choicehotels.com). Choice's app, launched in March, marked the first official global booking application launched by a hotel company. "With us, it's the ability to have 5,800 of our hotels, on one button, on someone's phone."

From the ground up
The biggest challenge when designing an application is deciding what functions to include and what to leave on the cutting room floor. The best way to determine what to put in the program is to query customers to learn what key tools they want. Choice's customer base wanted an easy way to locate a hotel near them, narrow down locations by city, view available rooms, and book a reservation. Once content is chosen, the only task left is to build the software.

Most companies developing apps are using in-house IT to develop the program and are outsourcing design elements and programming to vendors. "Obviously iPhone app development is not a skill set that usually sits around on staff at most companies," Pizza Hut's Concors explains. "We wanted to make sure we had the best talent working on it, and that was a mix of our own people and some partners, such as IMC2 (www.imc2.com)."

"The challenge is that you're building the car as your driving on the road," Choice Hotels' Brya says. "The SDK [software development kit] is very helpful, but it isn't all together helpful. There's got to be some trial and error, and when we started, few people that we reached out to had built these applications from scratch and were successful. Of course, this protracts the period of development a little bit, but it also makes you more savvy about how it actually works."

Distribution dilemma
Keep in mind that Apple has to approve all applications before they can be distributed to guests, and iPhone apps can only be downloaded via the iTunes store. "Apple employees have to see, use, and approve every app that gets submitted, as well as every update that is released," Brya says. However, applications that are free to customers eschew any fees from Apple.

Once approved, a company must market the application to get it into customers' hands. An obvious way is through the company Web site, but the loyalty program can also boost downloads. What it really comes down to is word of mouth and guest loyalty.
"It's the 80/20 rule: you can build every possible thing known to man in the application, but at some point it will take you so long that you aren't going to be so innovative any more when you get it out the door," Concors says. "We focused on the things that our customers want to see."
Pizza Hut found a creative way to plug its app. The pizza chain had its staff educate customers about the application's availability and pushed the app hard on its popular Facebook site. And it appears to have worked. In early November, after just three months in the iTunes App Store, the app was approaching one million downloads and has already brought in $1 million in food sales.

"The companies that are making really good iPhone apps are getting a loyal following," Concors says. "If you look at the Facebooks or the Twitters, companies that are releasing great apps have customers singing their praises; when you have over six million people in the U.S. using one device you just can't ignore it."

To boost the appeal and marketability of its app, Chipotle timed its launch with the unveiling of a new web-based ordering system on its website. Customers can place secure credit card orders through an interface that also allows them to save their information for quick repeat orders. The app also allows customers to save their favorite meals online, and an expanded group ordering feature allows customers to place multi-item orders on the website under a single name.

Options arising
Apple gets a lot of ink, but RIM, PALM, and Google are all getting into the application game. The question is, which phones are worth spending time and effort to port the apps over to?

"There has been some good growth with [Google's] Android, and we are seeing a lot of people in the mobile space with the Pre, and Blackberry is a huge player; but they all have their challenges," Brya says.

Motorola's Droid smart phone (www.motorola.com/droid), which runs Google's Android software on the Verizon network, debuted strong on November 6, selling 100,000 phones in its opening weekend (about half of the inventory that Verizon had on hand). While its number of available applications totaled 25,000 at release, Android software is open source, so it will likely only be a matter of time before the Droid application count hits the six-figure mark.

"The key is the store - how do people download these apps? Right now Apple has the smoothest train running, and it isn't slowing down. We are very pleased with the app we have for Apple, but we aren't content. We want to improve it and make it better, and customers will drive us in the right direction," says Brya.
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