The new app directory in Next.js 13 allows developers to fetch data directly inside relevant components, reducing duplicate code and improving performance. With Server Components, all components are now fetching data on the server by default, providing a more responsive user experience through smarter caching and deduping. The Loading UI also enables custom loading skeletons for even server-side fetches, reducing time to Largest Contentful Paint (LCP) and interaction, while improving Core Web Vitals for higher search engine rankings.