Explaining how Amazon successfully delivers the products at your doorstep seems quite outdated now.
Nobody wants to know that.
Amazon purchasers, however, are amazed by its 1-day delivery offer.
The e-commerce giant goes past the conventional definition of e-commerce business and delivers more than just packages.
As customers, we value services that offer us more convenience.
60% of US consumers are willing to pay more than 10$ for the same delivery of their furniture
Much like Amazon, new generation businesses have learned the art to get paid for the services they can offer. Amazon truly knows how to fulfil the user’s demands. We call them on-demand businesses.
In this blog, we will explore such on-demand apps and how they have made our daily life smoother.
A Brief Intro of On-Demand Application
Unlike online retailers, on-demand services are amenities that serve the seeker in the real world in terms of help, support, or a ride. The user pays for the skills utilized and the current market rates associated with the said service.
The services may vary from hiring labourers to food deliveries to ride picks and every daily life job. It is as easy as hitting your app and there you book your ride.
The on-demand applications are boosted with complementary services like referrals and discount coupon codes for promotion and quicker outreach. In the meantime, they are assisted with online and offline payment methods through popular gateways.
But are they really in demand?
Or is it just another market on the roller coaster?
Here, we present a few on-demand businesses and some stats related to their popularity.
Airbnb
Specializes in: Home rental service
Benefits offered to customers: Easy and cheaper lodge booking services with breakfast.
Benefits for the service offerers: More leads at lowered marketing costs
Back in 2007, two designers, Brian and Joe found it difficult to pay their house rents. They wanted a way to rent their loft as a lodging space. There weren’t many options as marketplaces back then. They created a website instead of the existing marketplaces. The site got them renters who paid them $80 each.
The AirBed and Breakfast idea expanded on a global scale and they started receiving requests for various destinations. The site currently boasts nearly 5Million lodging options across 81,000 cities on the globe and is valued around $38Billion.
According to Reuters, Airbnb records 9.4 billion in total booking value in the first quarter, up 31% from the year-ago quarter. The Company claims to have recorded nearly 91Million bookings in the said quarter.
Mobile app stats:
- 50% of the orders made on Airbnb come from the Mobile app
- Users spend 11 minutes 31 seconds on the app at an average.
DoorDash
Specializes in: Food delivery service from Restaurants to doorsteps
Benefits offered to the customer: Restaurant food delivered at home
Benefits for the Restaurant owner: Exposure in the consumer circle
Four Palo Alto-based university students were talking to a local restaurant owner when they realized the pain of home deliveries and lack of infrastructure to gain the right leads. The coding brains surveyed the 200+ local restaurants and designed the ideal logistics to sort things.
In terms of worth, DoorDash leapt from $17.3 Million to $535Million between May 2014 and March 2018. By Feb 2019, the company values nearly 60% more than its previous valuation back in August 2018.
Mobile App Stats:
- US smartphone food delivery app users have grown from 13.9% in 2018 to 16.3% in 2019.
Instacart
Specializes in: Grocery delivery service:
Benefits offered to the customer: Groceries and alcohol home delivered on the same day
Benefits for the Restaurant owner: Quicker sales across the US and Canada
The underdogs among online marketing products are often daily requirements. Online grocery is hitting the $100 Billion mark by 2025. And companies like Instacart are the ones that are going to benefit the most out of it.
Instacart is a household name for the US and Canada. The grocery delivery app allows its 50000+ shoppers to order fresh vegetables, groceries, and alcohol on simpler clicks.
As of current stats, Instacart’s revenue has risen by 75% this January compared to January 2018.
Mobile app stats:
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In the US, the number of grocery app users rose from 39% to 44% between 2017 and 2018.
Reasons for Popularity in On-Demand Mobile Apps
The three case studies clear up one thing: people need comfort.
They want services with as much convenience as possible. The more a service provider wears a customer’s shoes the more it understands the additionals.
However, there are more to just the features that make these on-demand services popular. It is the way they are accessed.
We identify three big reasons that make these on-demand services a go-to for every local business.
1. Extensive use of mobile phones
Pew Research ran a survey recently that reveals about the smartphone distribution based on age groups:
- 93% of Millenials
- 90% of GenX
- 68% of Bloomers
- 40% of Silent
That is, a majority of the people in their age group have access to mobile phones. It's especially popular among Millennials and GenX who play a major role in making decisions for their family and peers.
The On-demand mobile apps present themselves with exclusive functions and user experience to smoothen the processes at making orders at the right price that pushes both the service provider and the customer aligned.
2. Urban lifestyle
It isn’t 1950 anymore, where a professional work in the 9-5 schedule and leaves right by 5.01. There’s more to the daily life of a user that comprises work hour extensions, binge-watching and much more. Added to that, is the lack of accessibility to the right resources.
Example- You might not be able to find a maid in your region directly, even if there are many. Your resources might fail to get you the right leads. But what if you had known about an app that connects you with such housekeepers? You are calling them, hiring them and probably paying them while swiping your mobile screen.
On-demand mobile apps have only played as complementary to your daily lifestyle where users can enjoy their holidays, and let the experts handle the rest.
3. Convenience
You can either move around acres of the nearest grocery market, selecting the right vegs and bargaining on the costs, or make orders in a minute. Above all, the guy delivers it on your doorstep. You aren’t moving an inch, getting the fresh groceries and saving your day. These reasons are surely big reasons for choosing such apps.
The on-demand apps make mobile phones a great way to deal with your daily struggles. While most of these apps are free, few functions can come with a price, and they are often worth the pay. “Uber Premium”, for example, offers more luxurious cars for your journey. Few apps pitch yearly subscription for quicker services.
With those many services to the customer, do the on-demand apps appear partial to the service providers? Does it harm their business in the long run? In the coming section, we will discuss the perspective of the end provider for these customer-oriented apps.
What Does an On-Demand App Hold for the Business?
On one part, the users are receiving the services they seek, on their will. They are running a discount coupon code multiple times that takes the price far too low. Some coupon codes make free services, though on limited occasions. However, deep down, businesses can find this as the right platform to get them tested.
The on-demand mobile apps can help the end providers connect with their right customers. As a Pizza shop, either a businessman can pass pamphlets on every home in the region that includes families that don’t prefer junks. Or, they can just promote themselves with an app where a Pizza loving guy browses and finds them the most satiating of all. For obvious reasons, we see more conversion rates in the latter. The chances of making re-orders by that consumer are certainly higher as well.
The on-demand apps add trust and streamline to the services helping businesses grow at a great pace:
- Tracking services: The customers and merchants can track the progress of the services with the app.
- Secured payment channels: The customers can choose to pay the vendors through secured online payment gateways.
- Feedback from the customer: The customer can review the merchants and the intermediates about their services and can offer star ratings.
- Activity logs: The mobile apps record the past orders of the user which helps to enhance personalized services.
The basic model of the on-demand mobile app consists of up to three interfaces and each interface is distinctly different from the other two.
- The end provider
- The intermediate channel (generally the drop shipper)
- The consumer
Every participant has his own sets of functions to manage the orders and update the other two parties. That implies, the merchant has every update regarding new orders, existing ones, and the updated status. Managing the entire process is easier now. Right?
Wrapping Up
On-Demand mobile app development is a one-time investment that can reap in several ways-revenues, a dedicated customer base, and above all, more streamlined processes.
It’s a no brainer now, this can prove to be a potential tool for most local businesses, especially when they are seeking for an expansion beyond the immediate locality.
After all, it's the way you serve the customers that pay you back.
