Last week SF based delivery-service Postmates announced that it would open its API to vendors to provide users even more rapid delivery. Early partners include Everlane and MeUndies (curious about the size of the instant-undie market?). This will enable Postmates users to get same-day gratification when ordering products from partnered retailers. Some retailers, most notably Net-a-Porter and Suitsupply, have experimented with the insta-delivery model. But the tech giants can’t resist the opportunity to be involved. Yesterday, Amazon (AMZN) revealed that it would now serve NYC with a 1-hour delivery service (Prime Now). Google (GOOG) also launched its Google Shopping Express across a multitude of cities this fall. While these three brands offer a multi-product service, there are even more same-day delivery companies in the food-only industry.
Despite many competing companies popping up in the field of insta-delivery, none employ precisely the same model for delivery and each has a somewhat specialized use case.
Success for these companies will depend on their ability to perfect three factors. First, their ability to build winning logistics systems that enable drivers to pair nearby or alike orders, beat traffic, and consistently reduce transaction/pick up time. Second, success depends on how well the company can capitalize off consumer malaise and impulse by facilitating the ease of purchase through their online experience. The subpar Peapod experience is oft-cited as the reason for slowed growth at the delivi-grocer. Finally, and not to be underestimated, it depends on how little downward-pressure the companies avoid levying on drivers’ pay, and thus maintain, and even build, driver-loyalty.