How Chat Apps Are Evolving

by Miguel Perez
Blog Post

Chat apps make an annual appearance in lists of the most downloaded apps.

We’ve taken to these apps and are now integrating them into our daily work and personal lives. Where they used to be a fun novelty, they’re evolving to be essential tools for running businesses and keeping up with distant family or friends.

We seem to see more technology developed in the messaging space, almost on a monthly basis as companies vie to become the app of choice. Let’s take a look at how chat apps are evolving:

Chat apps – a brief history

Believe it or not, chat apps actually date back to the 1980s, when Compuserve released CB Simulator, the first dedicated online chat service that was widely available to the public. The first SMS was launched by Vodafone GSM in 1992, then throughout the mid to late 90s, messenger and chat rooms such as MSN and Yahoo! became popular.

The mid-2000s saw us with desktop-based apps such as Skype and Google Talk, allowing users to talk face-to-face with people across the world.

Chat apps as we know them today are a response to our desire for mobile communication abilities. Those old chat rooms were built for people sitting at a desktop or laptop, not with our phones or tablets in mind. As internet and data speeds have vastly improved, the experience of communicating by mobile has grown as well, allowing better features and capabilities.

Part of the push toward mobile chat apps came because the mobile phone networks were still charging for every SMS sent. Using data to operate a chat app became a more appealing option for many users.

By 2014, WhatsApp, which remains one of the most popular chat apps, had increased its feature set to include sending pictures and a host of other things, and had grown its user base to 650 million active users worldwide in a period of five years. Facebook Messenger hit 1 billion users by the middle of 2016.

Over this period, we also saw the growth of a different market that was not consumer-focused – that of enterprise chat. Early contenders in this space included Yammer and Clearspace, but it wasn’t until the 2010 launch of HipChat that traction started to be gained in the enterprise marketplace.

In August of 2013, a young company developing an online game decided to pivot away from this venture, and productize the internal tool they had created for communication – Slack was born. Since then, Slack has reached a $5 billion valuation, and other companies are turning out their own enterprise chat apps in competition, such as Cisco Spark, Google’s new Hangouts Chat, and MS Teams. In China, WeChat has an enormous following, a big player in a market where chat apps have been even more popular than in the US.

Today’s chat apps are vying for the conversation between businesses and clients, between friends and family and between colleagues at work. Let’s take a further look into how these chat apps are evolving…

The evolution of chat apps

Chat apps are growing in popularity and capability. Here are a few ways in which they are evolving:

Automation

How can a chat app deliver value for clients in the enterprise market? One strategy, particularly for clients with a need to chat with customers is to provide automation. This has high value for larger businesses that get a bigger volume of incoming requests.

With advances in Artificial Intelligence (AI) and Natural Language Processing (NLP) capabilities, code with machine learning capability can now understand queries just like humans do. This is how chat apps are bringing onboard automation – through the use of chatbots. The beauty of these bots is that they continue to learn as they go, building up their capability with every interaction.

Facebook Messenger has primed their offering for reaching people at scale. Their core product for businesses involves bots that respond to customer queries using automated answers. They also allow brands to build their own custom bots to tailor the experience for their own audience.

Part of the power of the Messenger offering is that business users can access Facebook’s vast analytics capabilities. There’s obviously some compromise when using a bot, in that it doesn’t think autonomously like a human operator and responds within the parameters it knows. It is helpful for businesses to capture analytics data and sentiment analysis, in order to evaluate what they are doing.

In the market for internal communication in businesses, Slack has stepped up with a range of possible bot automations. Their own “Slackbot” assists users in the app, while they also integrate with a number of other bots for automation purposes.

Microsoft’s competing app, Microsoft Teams, also allows companies to create a bot for themselves, or integrate one made by a third-party provider.

Becoming social media platforms

WeChat is a great example of a chat app that has evolved into something much bigger. The app, which had 963 million active monthly users as of Q4 2017, is hugely popular in China, where it has developed a range of features to become a social media platform. The app is said to now be a primary source of news for people in China.

Celebrities in China tend to use the WeChat app in much the same way US celebrities use Instagram. Through the app, users can also book a train ticket, order food, play the lottery, order merchandise, play video games and mobile bank.

A Buffer article discusses how chat apps are dominating and that social activity is now often going private as a result. Brands have started using chat apps like Kik to distribute content, in order to capture this trend.

Frictionless “human” connections

Almost at the opposite end of the automation spectrum, other chat apps are emphasizing building stronger connections, human to human. Apple’s Business Chat focuses more on fostering those “real human” relationships, while reducing the friction involved with getting to chat with a person.

For example, customers could tap on a message widget on a business profile from within their mobile search results, then seamlessly send a text message. This means they don’t need to fill out forms, nor do they need to download another app to communicate. Business Chat also integrates with several customer service platforms a company may already be using.

eCommerce hubs

Here we look to WeChat once again, as a good example. At the intersection of in-store shopping and more anonymous online shopping, we have the chat app. Chat apps allow customers to chat with the business and the business to make personalized recommendations to the customer. WeChat allows users to shop, chat with a business, hire a taxi and many more activities within its interface.

Facebook Messenger doesn’t as yet have a native shopping solution, however, a Shopify integration allows businesses who run a Shopify store to sell directly through Messenger, without users having to leave the app.

Augmented reality integration

Augmented reality has grown by leaps and bounds over the last few years. We’re seeing it integrated with more and more applications, and chat apps are certainly no exception.

While there are few examples at this point, this is something we predict will grow over time. We can point to apps such as TagWhat, that allows users to pin messages to locations for their contacts to see, and for businesses to connect directly with people within their locality.

Final thoughts

Chat apps have taken off in virtually all possible markets. There are many examples of enterprise communication, B2C, and friend to friend applications which have surged among users.

In many cases, activities that used to happen on social media have gone private with chat apps. A number of these are building out to become social platforms in their own right and are evolving with many features beyond basic chat.

Chat apps are evolving rapidly and have the potential to include many more features to appeal to different markets. Watch this space – we’re sure they’ll develop beyond what we’ve thought of!

Koombea develops state-of-the-art apps for enterprise to small business. Talk to us today about how we can help you.

by Miguel Perez
Blog Post