Can Anyone Win New York’s Instant Delivery War?
New Yorkers are busy, impatient and known for living the fast-paced, high-consumption lifestyle. Fortunately, New Yorkers are also spoiled. In the city of Seamless and…
New Yorkers are busy, impatient and known for living the fast-paced, high-consumption lifestyle. Fortunately, New Yorkers are also spoiled. In the city of Seamless and Uber, new startups have cropped up to help city dwellers streamline their lives and do every little thing for them, often on-demand.
Need laundry washed and delivered? Check. Need a maid service this instant? Check. Need a dog walker for your pup? Check that off your to-do list, too. Now is the age of the “Uber for Everything,” and convenience comes at the tap of a button. In the midst of all these productivity and convenience-focused apps, there is one area of service that’s hotly contested by several startups and tech giants alike: delivery.
While e-commerce has evolved over the years and provided convenience to consumers who don’t want to physically visit stores, speed of delivery has still remained an issue. Even too-good-to-be-true services like Amazon Prime, with its free two-day shipping, just aren’t fast enough. We live in an era of instant gratification. What about those items you didn’t anticipate you’d need right now? The “left my laptop charger in another city and can’t travel all the way crosstown to pick one up from the Apple Store before this important meeting” type of urgency.
Instant Delivery: The Next Frontier in Convenience
Just as e-commerce changed the need to physically visit a store to buy a product, we are now in the midst of another shift in buying behavior: the need for instant, on-demand products and services. It’s the next frontier in e-commerce in urban areas, and the first movers are picking up serious traction.
Below is a breakdown of the new wave of tech startups that have made instant delivery a reality. These startups essentially act as couriers -- you tell them the product you’d like from any local store, and they deliver it to you immediately, usually by bicycle.
Postmates is “the easiest way to get delivery for anything in your city.” According to CEO and co-founder Bastian Lehmann, Postmates’ goal is to “understand the inventory of a city, the same way Amazon understands the inventory of its warehouse.” Fees for Postmates’ mobile app start at just $5 for delivering virtually anything, and instead of giving your money to Amazon, the goods you’re buying are from local merchants. The startup focuses on the food niche and is hiring 100 bike messengers each week in its major markets: Seattle, NYC and San Francisco. Since its launch, Postmates has processed more than $1 million worth in deliveries across its three cities.
The cleverly named WunWun is here to help you get “what you need, when you need it.” WunWun recently rolled out its on-demand delivery in New York City for the small price of: absolutely free. The startup is bringing a courier service that was once only available to the “1%” to the masses, virtually for free.
We’ve seen this democratization of on-demand, premium services happen to the black car market with Uber, and to online personal assistants with FancyHands, and now it’s coming to the offline world. If you need to buy anything from a store, just get it from WunWun. As long as it’s over $10, they’ll buy it for you and drop it off, all while taking a fee from the merchant, and not you the buyer. (If your purchase is under $10 then you’ll have to pony up $20).
The Tech Giants: Amazon, eBay, Google
Startups aren’t the only ones getting their skin into the instant delivery game. On Tuesday, October 22nd, eBay announced an agreement to acquire Shutl, a London-based startup that delivers local goods on the same day, sometimes within an hour of purchase.
Acquiring Shutl will give eBay’s “eBay Now” offering the foundational infrastructure of couriers and relationships with retailers it needs to launch successfully and more efficiently in the UK. Currently, eBay Now exists in select cities in the U.S. and offers same-day delivery from local retailers. It has partnerships locked down with major retailers like BestBuy, Autozone, Macy’s, Target, and Urban Outfitters. For just $5, you can have books or even a TV delivered in under an hour.
Unlike Amazon Local Express, eBay does not have to worry about inventory overhead because it is essentially turning huge chain stores into the suppliers of the marketplace model they’ve already pioneered. Similarly, Google Shopping Express offers same-day delivery from local stores. How startups differentiate from these tech giants and how they execute will make all the difference in who wins the instant delivery war.
Kozmo: A Note of Caution Risen from the Dot Com Bust Graveyard?
The Dot Com Era darling -- and failure -- Kozmo was a startup that promised free one-hour delivery to consumers in several major cities in the U.S. and raised hundreds of millions in funding, only to burn through it and go out of business in 2001. Kozmo’s failure is a harrowing reminder for the many startups now vying to win in this space that instant delivery, while a nearly-magical concept, is a tough logistical and operational challenge to master. Interestingly, Kozmo’s website says it will be returning in 2013 (its spin-off cousin, MaxDelivery still exists), signaling that even more entrants may yet to be seen in this standoff.
In the coming years, it won’t be much of a surprise if instant truly means “instant.” If manpower and operational logistics become a barrier, we may even see companies turning to automated power. In fact, some startups have already started doing so: Australian startups Zookal and Flirtey are experimenting with delivering students’ textbook orders by drone. And while it may have been a joke, Tacocopter seems like another great drone-powered option for the hungry, busy New Yorker.
Overall, the flurry towards instant delivery is a sign of what’s to come as e-commerce approaches the next frontier in instant gratification. As we’ve seen over the past two decades, software helps us achieve our goals more efficiently, and now the barrier between the goods you want and actually have in hand is being demolished by these key players.