The collections feature can be seen as a more structured version of the responses feature, and in turn it can be very versatile and a good alternative for custom APIs for simple apps/websites.
In the collections feature you can define a template (e.g.: A Product which has a title, description and price), using this model you can add collections and single Products to be stored.
An example could be:
You have defined you "Product" template, a product should have a title, description and price.
Using this template you can setup certain collections:
But you can also define a single product based on the template, an example for that could be "Product of the day", "Most popular product", ...
A generic product is just 1 example of what the collections could be used for and you can of course use more templates at the same time.
On the right project with the right planning this feature can be very powerful.
You can find examples on how to implement Collections for the following platforms:
You can read a guide about Collections here