The Rise of On-Demand Industry: A Case of AI Marvel
With a drastic shift in consumer behavior and day-to-day lifestyle (work from anywhere/work from home), the way people interact and purchase from businesses has evolved. One industry, in particular, has leveraged this to the fullest. On-demand services have seen unreal growth in recent times.
By 2025 the market demand of the on-demand app economy is set to hit $335 Billion.
The storefront barrier has been removed, and this has opened up massive opportunities for customers to get services at their place, be it ordering food, and groceries, watching a movie, or even booking therapists, home maintenance, and repair services. Businesses have tasted success too. Doordash, Grubhub, and UberEats make up 96% of the food delivery market in the USA!
All the on-demand services/apps have an underlying element powering them- the robust tech of AI, ML & Cloud.
In fact, these technologies are singlehandedly responsible for making the on-demand industry lucrative, offering ease of access and immense benefits to the customers at a convenient tap of their device screen.
Customer Service is the ace card for the On-demand industry.
With the explosion of the internet and social media, I’ve observed a paradigm in human behavior. Two things have significantly gained traction-
- Instant gratification
- Low attention span
The on-demand industry thrives on these behaviors. Grocery, food, and home services are availed within minutes of booking from the user. Customers love this phenomenon, and this is one of the major reasons the on-demand industry has blown up significantly.
But there is a last-mile gap that still needs to be perfected-Customer Service. Customer Service remains the last piece of the puzzle for on-demand businesses.
In my opinion, the most obvious solution is personalization. From a customer angle, the demand is quite simple. They want what they are looking for, and they want it fast. The customer isn’t ready to wait or compromise on any other front.
The business challenge
From the business side of things, meeting this demand is easier said than done. Personalization is the key to offering the best possible service and user experience. Businesses need to predict user demand and deliver accordingly and exactly what the customer wants.
- Data is large and unorganized. Making sense of it is no easy task, and it’s easy to get lost in the translation
- A large number of online users spread across demographics means customer service is challenging
- Personalization isn’t as simple as using a complex tool. The marriage of the right data and the right tool with efficient targeting is the only way for effective reach
Businesses do believe that they provide superior customer service, while customers vehemently disagree.
To offer the best personalization experiences on-demand businesses need specific user data and the right tool to leverage it to reach out to the customers.
Location-based data, user interests, and preferences combined with historical purchase data act as the base ingredient that is a necessity to offer excellent customer service through hyper-personalization made possible with AI.
The solution
Marketing Campaign Personalization Engine is an Affine’s AI-powered solution that helps on-demand businesses personalize product/service offers and customer messaging most likely to get engagement from their users. Behavioral insights and personal data are combined with machine learning to produce the best possible personalization output to reach, engage and provide the best customer experience while optimizing promotional costs and efforts through smart automation.
High-value customers, loyalty, and repeat business
There are occasional customers, and then there are repeat, loyal customers. Customer acquisition is a crucial part of any business, and so is the case for On-demand businesses.
I’ve seen signup offers, 60% off for new customers, and many lucrative deals that are focused on bringing new customers. However, acquiring a new customer is up to 25 times more expensive than retaining existing customers.
While customer acquisition efforts must go and is a basic aspect of any on-demand business, customer retention is equally, if not more important, to boost revenue. 65% of an organization’s business is from existing customers!
They’ve already purchased from your business; it is just about retargeting and pushing them to do it again. But there’s an even better potential here for on-demand businesses. That is targeting high-value customers.
The challenge
- All on-demand businesses have loyal customers as well as high-value customers, but many businesses have a tough time identifying them
- The challenge is obtaining valuable customer data to identify these high-value customers
- Many businesses, without rightly identifying high-value customers, end up targeting generically and spending quite on marketing budget while not making revenue to justify it
The solution
Affine’s Customer Loyalty Analytics solution helps the on-demand business ecosystem to extract more out of targeting and retargeting exercises.
The AI-driven solution analyzes vital user data like purchase history, purchased items, and the frequency of purchases/orders and creates a detailed customer profile. This way, it helps on-demand businesses segment valuable customers and even tiers of customers with exclusive benefits.
- This makes targeting and retargeting an immensely efficient procedure, optimizing the promotional spend
- A huge amount of data is given a structure that is actually usable for the businesses and adds value to their targeting efforts
- By creating tiers for the customers, offers can be better personalized, and cross-selling will result in more spending per order from these customers, increasing business ROI
On-demand is not a bubble anymore; the future looks promising!
From food delivery to healthcare, the on-demand service industry isn’t a fluke by any means; it is set to grow exponentially. On-demand users spend up to $57.6 Billion a year, and the numbers will only go up with new players offering better services debuting in the market every day.
There’s no need to reinvent the wheel here. Pick any established service from the on-demand industry. There’s always room for improvement. By offering better customer experience, personalization offers, and an overall shopping experience, it can penetrate and sustain the lucrative on-demand industry. Even traditional industries will see a shift towards the on-demand economy in the future, so the potential is ripe!
But that’s the catch. You need the right tools for the job, and in this case, AI is the only tool that can provide a long-term growth scenario for any player in the on-demand industry. AI is the backbone of the on-demand industry and, paired with data, can work wonders in terms of delivering exceptional customer experience while streamlining and improving business productivity, boosting revenue in the long run.
What does Affine bring to the table?
Affine is a pioneer and a veteran in the data analytics industry and has worked with giants like Warner Bros Theatricals, Zee 5, Disney Studios, Sony, Epic, and many other marquee organizations. From game analytics and media and entertainment to travel & tourism, Affine has been instrumental in the success stories of many Fortune 500 global organizations; and is an expert in personalization science with its prowess in AI & ML.
Learn more about how Affine can revamp your On-demand Business!
