The future of on-demand apps

The on-demand economy is booming. There's an app for everything.
Hakee
November 9, 2020

We all know “there’s an app for everything”. Everyone with a smartphone today has used at least one on-demand service app.

What Uber did to the taxi services has helped shape the entire on-demand economy we know today.

Uber identified a service (taxi fairs)  that already was in huge demand and could be improved by adding a technology layer. Therefore making consumption easier and more conveniently for both supply and demand.

This started a phenomenon known as “uberficationof services and the number of on-demand apps has been growing significantly ever since. These apps connect everyday consumers to different product or services offering a new, convenient and exciting lifestyle.

Having a glimpse across most industries, we see this kind of platforms in food, delivery, healthcare, education, fitness, beauty, rentals and many more.

They’re everywhere.

The convenience

Our culture of instant gratification contributes heavily to these platforms.

The real-time access to the vast variety of services and products at a fingertip is what makes this type of apps so popular and used.

In Europe, the most popular platforms are:

These apps replace queues, stores, showrooms and markets. It brings people closer to a virtual world that is in continuous adoption.

Moreover, the COVID-19 crisis enforced an accelerated digital transformation across all sectors, creating a huge market growth for on-demand platforms.

More and more hyperlocal businesses leverage the on-demand economy to deliver food, consumer goods and services.

Food delivery apps are offering no-contact delivery options to minimize social contact. Grocery apps are helping people buy essential stuff easier, with curated lists.

Simply put, people have a strong desire to simplify their lifestyle during these hard and weird times we’re living.

The substance

At the heart, on-demand platforms are mediators, thus their business models are focused on giving access, rather than traditional ownership.

In other words, customers are there for the providers and providers are there for the customers.

That’s why the success of on-demand apps hugely depends on customer’s reviews, creating a 2 sided network effect.

Each new provider (supply) directly adds value for the customer (demand).

Without this network effect, the platform is just another app, despite the features it has to offer.

The network is what provides the majority of the value, not the app or website itself.

From a tech standpoint, there are some essential features that every on-demand app must come pack with. Features like notifications, real-time updates, order tracking, wishlists, reviews and ratings and integrated payments.

From a business standpoint, the main benefits are orbiting around mobility, scalability and business opportunities.

Businesses that operate in the on-demand economy can leverage their platforms to learn about user’s interests and preferences, thus building a more personalized user experience, increase retention activities and overall create a stronger customer relationship.

From the customer’s perspective, the most appealing features are the curated selections based on ratings and reviews, the variety of providers to select from and cashless payments.

The rating feature is an important part of on-demand apps for both the customer and the provider.

On one hand, the customer is encouraged to rate and give feedback about the provided service, which in turn helps other customers decide on the best services available on the platforms.

On the other hand, it helps the service provider build an image on the market based on positive scoring from the reviews.

It’s a win-win situation.

The challenge

Because of the highly competitive market, the biggest challenge is to make the product stand out from the crowd.

The markets are flooded with vendors and platforms offering A to Z services.

After all, there’s an app for everything.

Copying the “Uber for X” model can only work for so long.

Many startups in the on-demand economy fail to define a clear vision and a strong competitive advantage that would create an impact on the market.

This usually leads to cutting off margins and giving away services at a minimal cost, thus most of them compete on price, making it hard to optimize cash outflow.

It all comes down to creating that balanced mix of product design and service design to build a trusted brand and a platform that offers a great customer experience.

The future

Consumer trends are changing and so do these businesses.

It’s clear that on-demand services are here to stay and the on-demand economy will see a continuous growth over the next years.

Nowadays, the craving for instant gratification is causing us a great lack of patience, therefore we’ve grown to feel entitled to get things we want faster and easier. Every need, at the tap of a button.

We’ll see newer industries entering the on-demand economy.

On-demand home services market will continue to grow, allowing customers to schedule plumbers, electricians, carpenters or fitness trainers instantly at their door-steps.

On-demand healthcare was also on the rise, but 2020 made it obvious that this particular market is still in the early stage of improvements.

According to a study, on-demand market revenue is expected to reach more than $335 bn by 2025.

As consumer behaviour is shifting, there’s probably no better time to enter this sector.

If you're thinking of creating an on-demand platform that can stand out, we can help you. Get in touch with us to discuss your project and strategy.

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