In a world punctuated with instant coffee, fitness trackers, and cab-on-a-swipe – it is hard for businesses to stay away from the on-demand wave. Most enterprises are now packaging their products and services into on-demand apps. The reason is simple – to be where the customer is on a quick app and a screen that is just inches away from the customer – and that’s where the new paradigm of customer engagement and business delivery is condensing.
That’s what makes the surge in on-demand apps more than a blip in the pan. The on-demand app is any service that can enable the provision of a good or service to a customer – in a short span of time and at an unprecedented convenience. These apps are the modern-day bridges between a business and customer needs. They are the accelerators that help a product or service be where it is needed – at a customer’s doorstep.
Inside the app – and beyond
Here’s a list of the major types and components of on-demand apps:
- Instant ordering
- Seamless purchasing
- Continuous messages and updates
- Real-time delivery status and schedule
- Digital payment systems
- Alerts/Notifications
- Dynamic product/service selection
- Easy allocation and on-boarding
- Integration with social media platforms
- User journey
- Support, discounts, and feedback
These apps enable organizations to carve a much more efficient, convenient, and easier way of services to the customers than what was being done before. They can cover a wide span of services or goods – from travel to food to laundry to grocery to a beauty salon to fashion to a blood test to a big healthcare need – anything. In fact, the Covid-triggered change in the business landscape has only given a new impetus to the appetite for on-demand apps. As businesses across the world grow more and more digital, they are finally embracing the true potential of an on-demand model.
Their benefits are now coming under a stressed spotlight:
- Reduction of the distance between customer need and delivery
- Enhancing reach to new segments, prospects, and regions
- Being there at the exact moment when a customer makes a purchase decision
- Offering a wide range of options and service models for a customer
- Huge selling, cross-selling, up-selling, and post-sales engagement opportunities
- Enhancement of lifetime value and feedback from a customer
- Savings in human resource cost and time due to the use of technology
- Personalization of a good or service as per a real-time need
- Alternatives to beat the competition with actual outcomes and service-fulfillment
The next big thing
The future of these applications is getting brighter and brighter as we move ahead. According to estimates by JP Morgan experts, the overall level of GDP is already closing in on its pre-pandemic high. Output has risen to 98.7% of its February 2020 peak. The household saving rate has almost doubled last year to 12.9%. Looks like consumers have accumulated an estimated $1.5 trillion in excess savings over the past year. As more and more of this pent-up demand unlocks, businesses would be at the right spot if they can meet the customer at the right intersection of need and on-demand service.
A recent consumer survey by McKinsey found that countries with older demographics, such as France, Italy, and Japan, are less optimistic than are those with younger populations, such as India and Indonesia. There is a strong expectation that as consumer confidence returns, so will spending. There is already a big bet being made on “revenge shopping” which might be seen sweeping through sectors as pent-up demand unfolds at a rapid pace. All previous economic downturns have shown this pattern. But in this pandemic, services were the hardest hit. So the bounce-back will also dominantly entail services.
In the third quarter of 2020 alone, over 1.5 million new-business applications in the United States were spotted—and this was almost double the figure for the same period in 2019. The level of high-propensity business applications has witnessed a substantial jump – almost over 50% compared with 2019. The McKinsey survey published in October 2020 noticed that companies are three times likelier than they were before the crisis to conduct at least 80% of their customer interactions digitally.
Even overall IT spends and digitization projects reflect the momentum towards on-demand applications. The worldwide IT spending is projected to total $3.9 trillion in 2021, which is an increase of 6.2% from 2020, as shown by the latest forecast by Gartner, Inc. In 2020, worldwide IT spending declined 3.2% because CIOs prioritized spending on technology and services that were deemed “mission-critical” – this was palpable during the initial stages of the pandemic. But as the economy recoils to a level of certainty, companies are investing in IT in a manner consistent with their expectations for growth. This is where it is interesting to observe that digital business, led by projects with a short ‘Time to Value’, will get more money and board-level attention going into 2021 – as per Gartner experts.
The post-pandemic surge
Consumer sentiment and habits are also moving towards the on-demand paradigm. In nine of 13 major countries surveyed by McKinsey, about two-thirds of consumers said they have tried new kinds of shopping. And in all 13, 65% showed intentions of continuing this trend. In developing markets, especially Brazil and India, McKinsey expects the pandemic will accelerate digital shopping.
It is being augured that the shift to online retail is real, and it will not vanish anytime soon. In the United States, the penetration of e-commerce was forecasted to touch 24% by 2024; but by July 2020, it had hit 33% of total retail sales. Notably enough, in the first half of 2020 itself, the world has seen an increase in e-commerce equivalent to that of the previous ten years.
Let’s look at some Forrester predictions. We can see that digital customer service interactions will increase by 40%. Due to the pandemic, there has been an increased reliance on online shopping, digital financial services, and telehealth (virtual care) options. Customers were forced to, and have got used to, adopting digital channels to interact with brands. They will continue using these channels.
Forrester’s forecasts also show that data and analytics budgets are increasing, and over 60% of firms globally now have chief data officers.
In other words, this is the best time to ride on the on-demand wave. The gains are numerous and to the point. They align very well with the direction in which business sentiment is moving in the next four to five years. Companies have started investing smartly in technologies and projects that enable this on-demand model. Many have even started reconfiguring their business models – right from development to operations, logistics- to fit well with the on-demand world of services.
Finding the right on-demand app partner
It is a great opportunity. The key is to find a suitable expert that cannot just wrap your business offerings in an on-demand IT wardrobe but can also guide you on reinventing the core as per the needs of an on-demand customer. It would serve you well to work on process improvement, internal digitization, and overall remodeling instead of just adding an app on the front-end of your business.
Here are some ideas that can help you find the right strategy and direction for on-demand applications.
What to look for in a partner/team?
- Dedicated team with enough industry expertise
- Good on ideation and execution
- Proficiency in cross-platform development
- Wide range of service selection
- Flexibility and punctuality
- Customization ease
- Ability to inject strong user profile integration and analytics
- Cost-effectiveness
- Scalability and Adaptability
- Capability to bring in apt analytics
- Strong functionalities without extra time spent
- Deep and prudent stakeholder involvement
- A good grip on understanding app requirements
The on-demand customer is someone who has little patience, a lot of alternatives, and is short of time. But this customer is also loyal, a great advocate, and a big-value addition if the business can take care of his/her needs in the right way. On-demand applications may risk commoditization because now technology is a common denominator for everyone in the industry. Most of your competitors would be able to afford the technology that you can invest in. That will not be a differentiation anymore. But the real barrier to entry would be the creativity, customer alignment, and big-picture strategy that you inject into your on-demand application.
The time and effort spent in creating such an app could be substantial but the rewards are worth every hour and penny here. They are consistent, recurring, and will keep coming to the far-end of a long business horizon. On-demand applications are the face of the future. You can start thinking of a smart way to make this a bright one for your business and your customer.