How On-Demand Apps are Transforming Industries

The on-demand market is experiencing remarkable growth, with projections indicating that the global market will reach $335 billion by 2025, up from $106 billion in 2017. Furthermore, according to the Harvard Business Review, this industry has attracted over 22.4 million new customers, with spending reaching $57.6 billion.

These figures demonstrate the booming and rapidly spreading nature of the on-demand economy. But what exactly is an On-Demand App, and what are the crucial characteristics that contribute to their growing popularity? Let's explore through this blog!

What is On-Demand App?

On-demand apps are mobile or web-based applications that allow users to instantly request and receive goods or services. These apps enable users to access products or services immediately, without scheduling appointments or waiting for lengthy delivery times.

The rise of on demand services has been driven by:

• The growth of the Gig Economy: Characterized by short-term contracts and freelance work. This has enabled on-demand platforms to leverage a flexible workforce to deliver services efficiently.
• The rise of the Sharing Economy: Driven by the increasing adoption of smartphones, the desire for more flexible services, and the appeal of accessing goods and services without full ownership. On-demand platforms leverage this trend to provide quick access to a variety of services.
• Changing Consumer Preferences: Consumers today prioritize convenience, personalization, and instant gratification. On demand service apps cater well to these evolving needs, offering quick access to products and services with a tailored user experience.

Key characteristics of on-demand apps:

• Instant Services: On-demand apps provide services or products immediately, without scheduling or waiting for delivery.
• Live tracking: On-demand apps feature real-time tracking, allowing users to monitor the status of their request, such as the location of a delivery driver or a ride.
• Integrated Payments: On-demand apps have built-in payment systems, enabling users to complete transactions seamlessly within the app.
• Dynamic Pricing: On-demand apps use variable pricing models that adjust based on factors like demand, time of day, or other market conditions.
• Feedback Mechanisms: On-demand apps typically include user rating and review systems, which allow customers to provide feedback and help service providers improve their offerings.

You may want to know: 7 UI UX Design Principles for Mobile App Development

4 Types of On-Demand Apps 

4 Types of On-Demand Apps

1. Service-based 

Service-based on-demand apps connects service providers with customers, which allows users to request and receive services immediately.

Examples of service-based on-demand apps include:

• Uber: A ride-sharing app that connects passengers with drivers for convenient on-demand transportation.
• Netflix: An on-demand streaming app that provides access to a vast library of movies, TV shows, documentaries, and other entertainment content.
• Doctor on Demand: An on demand doctor app that allows users to connect with licensed healthcare & Telemedicine providers for virtual doctor visits, diagnoses, and treatment recommendations on-demand.
• Handy: An on demand home service app that provides access to services such as cleaning, handyman work,... 
• Stylebee: An on-demand beauty service app that connects users with vetted hair stylists and makeup artists, allowing users to book in-home appointments for haircuts, blowouts, and other salon services. 

2. Product-based 

Product-based on-demand apps allow users to purchase and receive physical products after a few hours.

Examples of product-based on-demand apps include:

• Instacart: A food & grocery delivery service that connects users with personal shoppers who can pick up items from local grocery stores and deliver them on-demand.
• GoPuff: A on demand delivery app that provides access to a wide range of everyday items including snacks, drinks, and household necessities, similar to what you would find at a local convenience store.
• Bloom & Wild: A flower on-demand delivery service app that allows users to order and send fresh bouquets on-demand for special occasions or same-day needs.

3. Rental-based

Rental-based on-demand apps allow users to rent or access various products, services, or experiences as needed for a specific duration. 

Examples of retail-based on-demand apps include:

• Airbnb: A platform that connects travelers with hosts who offer short-term rental accommodations.
• Car2Go: A car-sharing service that allows users to rent vehicles on-demand for short-term use.
• Zilok: A marketplace app that allows users to rent a wide range of products, from tools and equipment to party supplies and outdoor gear.
• Peerspace: A platform that connects users with hosts who offer unique event and meeting spaces for on-demand bookings.

4. Peer-to-Peer (P2P)

Peer-to-peer on-demand apps facilitate direct transactions and exchanges between individual users, rather than going through a centralized intermediary or service provider.

Examples of P2P on-demand apps include:

• TaskRabbit: A platform that connects users with vetted "Taskers" who can provide a variety of services and household tasks on-demand.
• Fiverr: An on-demand marketplace where freelancers offer a wide range of digital services and creative work starting at $5.
• Lending Club: A peer-to-peer lending platform that allows individuals to borrow and lend money directly to each other.

7 Crucial Features for an On-Demand Service App

7 Crucial Features for an On-Demand Service App

1. Search and Filter

A robust search and filtering system is crucial for an effective on demand application. A well-designed search and filter functionality allows customers to quickly and easily find what they're looking for, which can enhance user experience and drive early sales conversions.

Additionally, a sophisticated recommendation engine can further improve the experience. By leveraging machine learning to understand user preferences, on-demand apps can provide personalized and appealing product/service recommendations, helping to consistently drive sales and revenue.

2. Secure payment gateway

Providing a secure payment functionality is also essential for on-demand service apps. Businesses must ensure their integrated payment process is fast and reliable, offering a streamlined checkout experience for users. 

A key feature during this process is to integrate multiple payment options, giving users the flexibility to complete transactions through their preferred method such as credit/debit cards, mobile wallets, internet banking,...

3. Live tracking

At mentioned above, live GPS tracking is one of the key characteristics of on-demand apps. By integrating real-time tracking to monitor the location of service providers automatically, customers to track their delivery progress in real-time and adjust schedules if needed. 

Beyond the customer experience, this functionality also benefits businesses by providing insights into employee activity and time spent per task. This helps optimize operations, establish clear cancellation policies, and increase the chances of successful service completion.

4. Push notifications

Properly segmented push notifications have been shown to have an impressive retention rate (93%), as they provide users with timely and relevant information. 

On-demand apps can leverage this feature to deliver updates on chat conversations, tracking information, and promotional offers. When used judiciously, push notifications can drive engagement and increase app usage, offering customers reassurance throughout the booking or purchasing process. 

5. User registration & profile

On-demand service apps should offer social sign-in features to streamline onboarding and encourage higher adoption rates. By enabling customers to register and log in using their existing social media profiles or email addresses, apps can eliminate the friction of repetitive sign-up processes and password management.

Alongside seamless registration, robust user profiles are crucial for enhancing the customer experience and driving retention. In general, the profile section should allow users to:

• Input personal information
• Create wishlists
• Track their recent activity and frequent orders. 

Profiles can also be leveraged to further engage users, such as through special badges or loyalty programs. By empowering customers to tailor their in-app experience, on-demand service providers can foster stronger user engagement and build lasting relationships.

6. Shopping cart & order history

Another crucial feature for on-demand service apps is the shopping cart and order history functionality. This allows customers to review their previous service requests, track their total spending, and stay informed about the details of their transactions. By integrating order history, the app can help customers quickly find products or services they were previously interested in, streamlining the decision-making process.

7. Ratings and reviews 

The ratings and reviews feature generates a valuable sense of transparency and accountability that benefits both the service provider and the broader user community. 

For customers, the ability to read honest feedback from previous users allows them to make more informed decisions when selecting products or services. Meanwhile, by embracing customer feedback, businesses can identify areas for improvement and take corrective measures to refine their offerings.

This mutually beneficial dynamic fosters a strong sense of trust, which is essential for building credibility and an exceptional user experience. When customers feel their voices are heard and that providers are responsive to their needs, it leads to increased loyalty and conversion.

Read more: Optimizing Order Management System for E-commerce Success

Final thoughts

The on-demand economy is revolutionizing how businesses and customers interact. Many of the most innovative digital products have been on-demand service apps, and there is still significant room for new players and niche offerings in this space. Embracing this trend can not only enhance the user experience but also drive more conversions for your business.

As a leading global UI/UX design and mobile app development company, Lollypop Design Studio - A Terralogic Company has a team of seasoned experts with extensive practical experience. We leverage our deep knowledge of best practices to design digital products tailored to the needs of businesses of all sizes.

Whether you're building a new on demand app or enhancing an existing one, our team can bring your vision to life. We prioritize scalability, performance, and user-centric design to help you stand out in this competitive market.

Contact Lollypop Design Studio today to schedule a free consultation on how we can help you shape the future of your on-demand app