On-Demand Services App: 11 Challenges in Times of COVID-19 and How to Solve Them

Having an on-demand services app at hand has become a must for most businesses, whether they are engaged in trade or services. The reason why on-demand apps are booming is simple. COVID-19 has changed the way we live and do business, prompting our daily routines to go online. Every human being is searching for options that will come in handy to live peacefully so that there was no need to worry about stuff in a new daunting reality. This is what on-demand apps have been focusing on for quite a while now.

Last year was a rocky one. And 2021 is about finding innovative ways out for businesses to reach even more consumers with an on-demand services app and filling their niche with novel strategies to thrive. Illustratively, Disney Plus racked up 50 million subscribers in five months while it took seven years for Netflix to do the same. Amazon, another promising example, experienced juggernaut growth in 2020: a company hired 427,300 employees (pushing its workforce to more than 1.2 million people globally) to meet an increasing demand for online shopping.

Meanwhile, like every other sector, the on-demand economy has particular challenges to battle day by day. In this post, OpenGeeksLab has gathered possible pitfalls you may face while joining on-demand app development, how you can overcome them, and, finally, exceed your goals. Keep on reading.

How COVID-19 Impacts On-Demand Services App Solutions

First things first. Today, on-demand application solutions are rising more than ever. Numbers don’t lie:

• Statista reveals global mobile app revenues will double from $581,9 billion as for 2020 to $935,2 billion in 2023.
• A recent report by ACI Worldwide states that the coronavirus pandemic accelerated a whooping 41% upturn in real-time payments transactions: 70.3 billion in 2020 compared to 50 billion in 2019.
• Online food delivery has skyrocketed, too, being propelled forward by DoorDash, Uber Eats, and Grubhub. Even before the current COVID crisis, some analysts reported the on-demand mobile app market revenue may reach $200 billion by 2025. Since more and more consumers positively experienced the convenience of an on-demand food delivery app, there are no signs of slowing down.
• Top dating services mark a breathtaking 82% jump as well As Research and Markets states, the global on-demand dating app market will surpass $8.4 billion by 2024.
• The ride-hailing and on-demand taxi booking app market size is expected to reach $365.912 million by 2024.
• In the US alone, the number of online therapist consultations will double by 2022, reaching around 80 million per year.
• Music streaming platforms have already attracted about 640,8 million customers in 2020 and these numbers will only grow till 823,7 million in 2024, resulting in $20,829 million revenue.
• Zoom’s revenue increased more than fourfold: from $623 million in 2019 to $2.65 billion as for 2020.
• Allied Market Research revealed that the online banking app market will triple revenues, hitting $31.81 billion by 2027 (compared to $11.43 billion as for 2019).
• Forbes claims that the remote learning marketplace will triple revenues up to $325 billion in 2025 compared to $107 billion in 2015. And remarkably, 34% of US parents of children under 18 said Netflix has good educational content.

All the above is just a little something of how brands shifting to on-demand mobile app development can win the race to meet ever-changing consumer preferences. If you are about to roll into on-demand services app crafting, you should figure out your way to online presence, otherwise, you may be left behind. But how can you do that? Below you will find out.

Challenges of On-Demand Services Apps and Solutions to Solve Them

In times of uncertainty, it can be pretty challenging to start something novel and capitalize on new opportunities. But you know, they say forewarned is forearmed.

1. Supply Chain and Inventory Management

Undoubtedly, COVID-19 caused some kind of inventory and supply-chain shocks. Last year, 56% of global retailers experienced moderate disruption in supply chains, while 12% faced heavy collapse. Since the global supply chain makes a brand-new start, a manufacturer should re-architect an existing business model towards an on-demand delivery app to stay afloat.

The solution lies in growing productivity and designing effective, resilient strategies by investing in increasing the use of analytics in the supply chain management system. Prioritizing data makes it possible to ensure scalable processes and picking strategies, reshore or nearshore manufacturing operations, achieve increased warehouse capacity, recover up to 85% of existing floor space, and embrace omni-channel distribution.

2. Employees

The U.S. Bureau of Labor Statistics reported that in March 2021, 11.4 million persons told they had no opportunity to work because their employer closed or lost business due to the pandemic. And only 10.2% received at least some pay from their employer for time that they were not working, while 43% of employees are extremely concerned about their job and income, and unable to make ends meet.

A better solution might be driving in more people to join the on-demand economy. The reasons people choose on-demand jobs lie in earning supplemental income (63%), creating and controlling schedules (46%), building their own business (24%).

3. Delays in Logistics

In early 2020, Intel, Apple, and IBM faced out-of-time delivery as tech giants deeply depend on China’s high-tech manufacturing ecosystem, which experienced a screeching halt due to the pandemic. Currently, its economy stands up on its feet, growing at record pace with GDP set at 8.4%.

The sole viable solution lies in being responsive to fast-paced trends, incorporating reliable supply chain management, and advanced data analytics in inventory management.

For instance, when it all started, the Cosmetics and Fragrances division of LVMH (Christian Dior, Guerlain, Givenchy), L’Oréal, and Coty used their facilities for fragrances to produce hand disinfectants and hydro-alcoholic gels to help battle the disease.

4. A Shift in Consumer Behavior

Stay-at-home and social distancing orders have definitely changed consumer behaviors, priorities, and purchasing habits. Today, people rely even more heavily on new online shopping experiences and omnichannel.

What’s more, there has also been more of a focus on value-based purchasing, convenience, and availability. Additionally to where to shop, the quality of goods, and the purpose of purchasing (supporting their local community and local economy) are top drivers of consumer decision making.

McKinsey claims that shoppers intend to continue with many digital behaviors after COVID-19 subsides. Medicine, groceries, household supplies, and personal-care products show expected growth of more than 35%. The demand for skin care and makeup, apparel, jewelry and accessories is expected to exceed 15%. To compete in the market, brands should proactively show consumers how they fit in.

5. Competition in the Market

Despite incontestable advantages, on-demand app development is not suitable for every industry and geography. For reaching new potential markets, you should carefully select the niche based on your multiple factors, including your expertise, tech background, users’ needs, budget set, legislative and regulatory framework. Making your customer needs your Bible is one of the most challenging tasks for every organization.

For instance, Seattle-based Starbucks has dramatically changed its rewards program, enabling people to earn points through payment methods, while previously it was only possible with a Starbucks card. These adjustments are paying off: the company’s active member base increased by 2.5 million members in Q1’21 to a record 21.8 million. What’s more, while over 60% of its stores are operating at reduced capacity, a coffee roaster and retailer offers drive-thrus.

As a result, stores with drive-thrus brought over half of net sales, increasing more than 10% compared to pre-pandemic figures. On top of that, consumers are embracing Starbucks’ on-demand mobile app: mobile orders reached 25% transactions, which is 17% higher before the pandemic.

6. Maintaining Customer Satisfaction and Loyalty

A recent McKinsey study reported that of buyers who have already tried switching brands, 73% prone to continue incorporating new brands into their daily routine. To stay in demand, brands should reconsider their loyalty program offerings. Here is when a strong brand image and corporate reputation can create a credible online environment to meet customers’ evolving habits.

For example, 100% PURE, an organic beauty brand, have revealed its clients are passionate about helping others. The company refreshed its Purist Perks loyalty program, offering consumers to donate a $5 bottle of hand sanitizer spray to those in need, and, accordingly, receive extra reward points per each donation.

7. UI/UX Design

Another shortcoming of an on-demand service app lies in overloading and overcomplicating their design. Recent statistics claim that 88% of users will not return to an app after encountering a poor user experience.

To engage and retain customers with your on-demand services app, you should bet on minimalism, sizing/scaling features, plain colors, and a highly interactive interface spared of excessive details.

8. Cost of Development

A high cost of development is a tremendous challenge for entrepreneurs to roll out a solid on-demand application. Gartner report claims that business owners allocate 17% of total IT spendings on new application development.

A perfect solution here will be looking for alternatives that help optimize spend and improve value. Here is when cross-platform on-demand app development arises to shorten time-to-market, cut costs, and hit multiple app stores without sacrificing performance.

9. Lack of Skills in the Development Team

A lack of appropriate skills and knowledge in the development team can become a sufficient challenge in on-demand services app development. Improper planning and executing will affect the entire project’s workflow, eating up a good chunk of the budget without reaching goals set. While sticking to technologies that no longer fit the current industry’s needs, will push you back.

A solution is partnering with a trusted software engineering vendor with decent expertise, relevant tech background, and proven success stories. After all, a good development team makes a great deal of your future success. So, bet on companies that deliver end-to-end software solutions: from business analytics to after-release platform maintenance.

10. Maintenance and Uptime

In case your on-demand services app is poorly configured or an architecture is not built to ensure scalability and handle high loads, you can face multiple problems. These issues include slow or zero page loading, app performance gap, random errors, a partial connect or total disconnect, partial content loading. All this may result in reduced user activity or even significant customer losses. What’s more, you face the risk of redeveloping a whole product and paying twice.

Solution: choose a technology stack with a strategic approach and a thorough analysis. Properly selected technologies make your product user-centric, increases its scalability, ensures nearly error-free, and bug-free solutions.

11. App Abandonment

Singular pulled a survey to see whether COVID-19 affects app install rates and found out that for every 100 times an app is installed, 36.4 uninstalls follow. Meantime, Android uninstall rate is 2.5 times higher than iOS: 39,8% versus 14,9%. Consumers may abandon your on-demand services app in case it doesn’t satisfy their expectation, poorly designed, has bad performance, or contains too many irritative ads.

An efficient way out lies in profound optimization, followed by careful testing before rolling out the public on-demand delivery app release.

Even though there are significant challenges for on-demand apps, the industry will only grow and evolve.

Seize the Day With Your Own Custom On-Demand Application

As you can see, there is no drop in on-demand service apps, on the contrary, the trend will only increase. Unfortunately, COVID-19 is knocking companies off balance. And the world won’t recover overnight; it may take months to get back on track. But at the same time, the crisis opens up new opportunities. To win the race, you should think through all the risks in advance and roll into the industry prepared. Innovation, results, and continuous improvement should be your number one priorities to address the changing environment.

We at OpenGeeksLab have decent experience in on-demand app development, so you can rely on us and don’t be afraid of the challenges we mentioned above. Need to develop your own on-demand application? Please don’t be shy to contact us. Still have second thoughts? Then follow this link to book a free online consultation with our vetted on-demand services app developers.