The end of an era for apps?

Enter the chatbot…

Daniel Garsin

By: Daniel Garsin, Nicholas Macmanus
Blog

In 2009, Apple coined the phrase ‘there’s an app for that’. 2.2 million apps and 70 billion downloads later, their marketing slogan has turned into tangible reality. Indeed, over the past few years it has become difficult to imagine a future without apps – they have become ingrained in our daily lives in a way few could have foreseen. Apps have become the primary way people explore the internet and they shape everything we do – from the way we communicate to the way we travel, shop, eat, date and consume media. You name it and you can probably find it in the App Store…

Just to give a measure of how deeply this has permeated our lives, the average smartphone user spends one month per year on apps (and I’d be very surprised if I am not double or triple this), fuelling a global app market worth $1.3 trillion.

It may come as a surprise, then, to write that the app industry is actually in the midst of an engagement crisis. The growth of new apps has plateaued and whilst overall usage levels are high, they are consolidating in a handful of popular ones. And yes, you guessed it, most of these are social platforms such as WeChat, WhatsApp, Facebook Messenger, Instagram, and Snapchat.

On average, smartphone users spend 85% of their app time in 5 apps and the majority of American smartphone users aren’t downloading any new ones each month. Of those apps which do manage to break through the ‘noise’ of a saturated market; a staggering 95% are deleted within 90 days.

Broadly speaking, these statistics reflect overall ‘app fatigue’ – people are becoming increasingly tired of installing, updating, learning to use and actually finding real value in the huge number of apps in the digital ecosystem. There are too many, offering essentially the same thing, competing for the same market share.

There are too many apps, offering essentially the same thing, competing for the same market share.”

There is little doubt, however, that no amount of ‘app fatigue’ will convince smartphone users to completely abandon the services and offerings that some apps have brought into their lives. What people are really seeking instead is a more efficient, effective medium through which to access the services they provide.

I believe that the ‘chatbot’ is primed to satisfy this demand. A chatbot is an artificial intelligence-enabled program that facilitates a normal, verbal conversation between a computer and user. The computer is able to understand the tone, words and intent, and provide solutions and responses based on this – be it booking a doctor’s appointment, ordering a taxi or providing an update on the major news headlines.

Although today’s chatbots are still struggling with context (i.e. they can only deal with specific questions in areas they have been ‘trained’ in), recent advances in machine learning will enable them to ‘learn’ about human behaviour over time and improve their responses. This will make the conversational experience feel altogether more ‘human’, trustworthy, wide-reaching and real. Platforms such as Chatfuel and Wit.ai are making it increasingly accessible for businesses to incorporate the benefits of bots into client and customer conversations.

The chatbot of the near future will act like a single interface through which users can access all the offerings that individual apps previously provided. Suppose you are planning a trip to New York, your chatbot (either by text or – going by the increasing adoption of Amazon, Google and Apple’s smart home assistants – voice) could automatically search for and provide you with the best flight deals. After instantly booking your flights, the chatbot could then locate you a hotel based on your requirements, provide you with a weather update for the week of your visit, recommend the best local restaurants and check if there were still tickets available for the most popular show on Broadway.

All of this could be achieved through a 2 to 3 minute conversation within one application rather than separate interactions with several different apps (Skyscanner, Booking.com, StubHub, Yelp etc…!)

If this all sounds a bit far-fetched, note that the world’s largest mobile tech giants are throwing serious funding behind embedding this new technology into their mobile apps. Facebook already hosts 100,000 chatbots on its Facebook Messenger platform. Through these you can instantly order a pizza, diagnose an ailment (via Gyant) or automatically transfer savings from a current account to a savings one (via UK Fintech startup Plum).

The app industry is in the midst of an engagement crisis

Google, eager not to get left behind, debuted its own chatbot analytics program earlier this year. And WeChat – a Chinese mobile messaging service with 497 million users – is taking the Asian market by storm. Through their platform, chatbots allow users to schedule doctors’ appointments, shop for the latest styles, play games and send money to friends. While the approaches are different, what is consistent is a recognition that they need to shift away from single-point apps and towards a more interactive, integrated user experience.

I’ve recently returned from a trip to Silicon Valley and – based on the scale of investment and the depth of startups operating in this space from there – my feeling is that chatbot technology is very close to mass adoption. And we are only at the start of this journey. Coupled with advances in artificial intelligence, natural language processing and machine learning, chatbots have the potential to define the new digital interface of our time. And through this evolve the way we communicate with our favourite brands and companies. In doing so, will this signify the start of the post-app era as we know it?

Surviving disruption: how fit is your business?

Take the test.