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How Postmates Have Flipped Local Supply Chains On Their Heads

How The Courier Service Postmates Have Fundamentally Changed How Goods Are Transported Across City Spaces Today

3Jan

Founded in 2011 with the aim of connecting customers with local businesses, on-demand, urban delivery service Postmates just celebrated another incredibly successful year - with no signs of progress slowing. The business, which offers a same-day courier service for food and almost any other products from almost any local businesses, has enjoyed exponential growth throughout the past six years. They only continued to grow in 2017, making an estimated 2.5 million deliveries a month as the year drew to a close. In November, they branched out of the US and into the international market, launching their platform in Mexico City where they now boast 550 employees and deliver produce from over 1,000 establishments, signalling their readiness to go global in the coming years. In the same month, they introduced a grocery delivery service, facing up to fierce competition from mega-conglomerates like Amazon and in March they announced they were on track to make $1 billion in sales.

With it's finger firmly on the pulse of modern business and a sincere understanding of their customer base, Postmates are set to continue booming and changing the face of goods transportation. But what is the impact of their business model on society in 2018?

Like other prospering delivery services such as Uber and Lyft, Postmates' success comes from it's easy-to-use mobile application where all orders are placed then delivered on the same day by a courier. With the process being as simple as the click of a button, this convenient and speedy service fulfils modern consumers needs. Latching onto the fast-growing trend of ecommerce apps early has allowed the business to grow through the sheer ease of using its service. Customers may not have time to nip to the shop, but they are almost guaranteed to have access to a mobile phone, and a service business in 2018 will struggle to thrive without following this model.

When Bastian Lehmann first theorized the concept for Postmates, it was as a response to the decline in once-thriving local businesses in urban areas. The whole model is focused around empowering local businesses and the communities that spring up around them, aiming to bring these businesses into the modern world and make them more competitive with internet retail incumbents. This is what sets Postmates apart from other retail delivery services such as Instacart and in particular the trade colossus Amazon. Lehmann has previously stated that 'Amazon comes along and builds a warehouse outside a city. We like to say the city's our warehouse. We try to understand the inventory available, hacking the city, and having a fleet of delivery people that distribute these inventories.' Postmates engages with the local community and directly contributes to it's growth, where other big businesses will cause a decrease in these organisations' customer base, Postmate directly encourages people to engage with what's local.

This emphasis on empowering local communities posits Postmates right at the heart of ethical consumerism, a trend that appeals to the new wave of consumers who demand transparency and sustainability from their stores. With its focus on shopping local, Postmates will only become more relevant and continue to flourish.

The introduction of their new grocery delivery service and their monthly subscription charge in November last year is a natural progression for the company, but it is also something that promises to shake up the current industry leaders of delivery. With the focus always around the customer's experience, Postmates' pricing structure is incredibly competitive. So competitive, in fact, that they have managed to undercut the already well-established companies who offer the same sort of service. Postmates currently charge $3.99 for delivery on each order or the flat rate $9.99 a month, a cheaper rate than both Amazon and Instacart's grocery delivery services, putting pressure on these competing companies to keep up in order to avoid losing their customer base. Following the recent trend of introducing a monthly subscription for deliveries, no matter how much is ordered that month, also to ensures customers are constantly going back time and again to use their service, ensuring growth.

Having already successfully predicted several consumer trends, Postmates are poised to enter the new era of industry which will be predominantly shaped by advances into robotics. Last year, Postmates became the first company in the US to begin testing 'sidewalk class' delivery robots - self-driving delivery robots which travel up to 4 miles an hour on sidewalks - to optimize delivery time. This move away from hiring the flexible, freelance workers that make up companies like Postmates and Deliveroo's current employee-base will inevitably save money on wages and allow them to sustain their fiercely competitive rates. This move towards robot workers will inevitably pave a new way for local delivery services in the near-future, drastically changing how goods are transported across city spaces. 

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