Investors.com: Wal-Mart, Sysco, SodaStream Among First with Mobile Investor Relations Apps
BY TONY KONTZER, FOR INVESTOR'S BUSINESS DAILY
Forget about Angry Birds, Pandora and Instagram. The next hot new app category for mobile devices could be investor relations. Over the past several months, a growing number of companies have been rolling out IR apps that deliver critical shareholder information directly into the hands of smartphone and tablet owners.
One recent addition to their ranks is food distributor Sysco (SYY). Its IR app debuted in August, in conjunction with its fourth-quarter earnings announcement.
Neil Russell, vice president of investor relations for Sysco, says research about mobile phone usage and the realization that much IR content is tough to access on a mobile device convinced him the time was right for such an app.
"It was a bit of an aha moment for us," Russell said. "It just makes sense. We need to make that information available to the investor on the go."
Russell says many workers nowadays are rarely at their desks, and yet their smartphones, in particular, were not well-suited to displaying PowerPoint slides, PDF files, and audiocasts of earnings calls. Then he read a year-old white paper from consumer research firm Compete that said 20% of investment account owners were using mobile devices to research companies. That number's no doubt risen.
So, Russell turned to consulting firm KCSA Strategic Communications, which earlier this year spun off TheIRapp, a rentable IR application template.
Rather than build an app internally, Russell decided Sysco should instead subscribe to the KCSA spinoff, which requires little more than a high-resolution corporate logo to get a company's IR app up and running.
"I'm not in the business of designing an app," Russell said. "I'm in the business of getting information in the hands of investors."
In the first three days the app was available in the Apple (AAPL) iTunes store and theGoogle (GOOG) Play apps market, it was downloaded 175 times. That's not a huge number by app standards, but it's a healthy response in a narrow niche.
Not Yet Prevalent
It's hard to determine how many mobile IR apps are available. An iTunes search returns only a few dozen examples, some of which are simply electronic versions of an annual report.
Besides Sysco, in recent months companies such as Wal-Mart (WMT) and SodaStream(SODA) have introduced IR apps, hoping to forge tighter bonds with shareholders.
Jeff Corbin, CEO of KCSA and founder of TheIRapp, expects IR apps to become commonplace as companies search for more effective channels to communicate with shareholders.
TheIRapp team has set up about 15 such apps. Each company pays $349 to $649 a month, plus a one-time setup fee, to have their apps managed for them.
"Where we are today with regards to IR apps is where we were 15 years ago in respect to the IR section of a website," Corbin said. "As investors become more dependent on their mobile devices, the SEC is going to have to say, 'OK, this is now an acceptable means of communicating.'"
In 2008, the SEC ruled that IR sections of websites could be the sole means of disclosure to investors. In time, the SEC likely will make a similar ruling about mobile apps.
Wal-Mart is one of the first big-name companies to jump on the trend, introducing an app in April that's been downloaded 2,000 times since.
The app is part of a companywide push to deliver IR information electronically.
The retail giant says it's cut the number of printed proxies, voting cards and annual reports it sends out from 2.7 million six years ago to 750,000 today.
The company won't say exactly what it's saved, but Carol Schumacher, its vice president of IR, says it's more than $1 million a year.
Schumacher says the motives behind the company's IR app - which was custom-built by a third party - have more to do with strengthening its connection with investors.
A Way To Embrace Change
"We want to be viewed as a company that accepts and embraces change," she said. "If we can give (shareholders) access to information anywhere, that means we're doing a better job of cementing that relationship."
Wal-Mart wants to use its IR app to provide investors with multimedia content that will let them do things such as see the various formats of its stores around the world. Doing so, says Schumacher, will help the company "make the Wal-Mart world smaller for our shareholders."
Yonah Lloyd, executive director of corporate development and communications forSodaStream (SODA), the Israeli producer of home soda-making machines, also says the top benefit of an IR app is anytime-anywhere connections with investors.
"I'm not sure being an early adopter of the technology gives our company a competitive advantage," Lloyd said. "But the personal touch that an app brings adds to the overall positive relationship investors will have with the company."
Since its release in May, Lloyd says SodaStream's app - which like Sysco's relies on TheIRapp's template - has been looked at an average of more than 500 times a day even though it hasn't been promoted beyond passing mentions in IR-related press releases.
"We're a small-cap company, so this is outstanding reaction to what we, until recently, considered a beta (test) app," Lloyd said.
Lloyd says any company that's serious about connecting with the investment community will have a mobile IR app at some point. Once the apps are more widespread, he expects them to have a democratizing effect in terms of equal access to information for shareholders and investors.
"If it becomes standard fare to provide information through mobile apps - and everyone has access to apps - it will level the playing field," Lloyd said.
Corbin agrees. He says Facebook (FB) could have used a mobile IR app to widely share the IPO roadshow it was accused of only making available to privileged invitees. If used that way, Corbin says, IR apps will "solve a lot of the problems related to a lack of transparency."
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