Instacart is dramatically expanding the services it can offer retailer customers with its $65 million acquisition of Unata, a Toronto-based developer of retail software. Bloomberg and TechCrunch cover the details of the deal. Why does it matter?
On-demand companies traditionally focus on the last-mile, putting people to work delivering and providing services to the home. However, Instacart is acknowledging with this acquisition that it needs a larger role in retail. Unata will provide Instacart with retail storefront software that, we expect, will eventually be integrated with Instacart human services.
Instacart is hedging its bet by deepening its retail services offerings. Integration with logistical and messaging tools, such as voice, can be tied into consumer solutions expressed as a “skill.” Voice combined with couponing capabilities would allow a product request made to a smart speaker to take a grocery order and offer better pricing or coupons when alternative options are available, then organize delivery in the background. Instacart a separate upsell to retailers, another stream of revenue in the face of competition in on-demand.
Amazon’s looming retail presence should not be a short-term concern for Instacart, as the Seattle retail giant has not (yet) mastered on-demand services. Instacart could change its revenue mix, moving to emphasize retail services with on-demand humans subsidized by software in order to win market share.
Ford today announced a partnership with Postmates to expand on-demand services for small business at CES. Postmates reports that SMBs joining its network see “4X revenue growth” and claims it has the most extensive on-demand delivery fleet in the U.S. A variety of companies will enter this space in 2018, among them HERE Technologies which announced a competing service that aggregates on-demand mobility options yesterday.
“Expanding access to smaller, local merchants is at the core of our business,” Vivek Patel, Postmate’s vice president of Business Operations, said. “We view self-driving vehicles as another potential tool that can level the playing field for these businesses, and ensure that geography alone does not equal destiny.”
We applaud the focus on small business. It is where the on-demand economy can take root and develop opportunities in every community.
Delivery without people remains problematic, as it is the last few yards or flights of stairs that presents the most significant barrier to automated deliveries. Sure, a car can get to the curb in front of an address, but how to get the package inside with the appropriate brand experience, requires a human. Postmates will likely utilize Ford autonomous vehicles to streamline its workers’ travel. The companies are working together on how to support the last-yard fulfillment, as well as improve consumer discovery of, and purchases, through automated deliveries.
Scale doesn’t come easy, as flower delivery startup BloomThat has found. The company, which reportedly has lowered its burn rate to just $15,000 a month after raising $7.5 million nine months ago, was purchased by FTD. TechCrunch said the company was purchased for “a small amount of money.”
BloomThat has struggled to acheive scale, or even to beat existing flower delivery services to the consumer’s door. BloomThat promises next-day delivery. Not really an “Uber for Flowers” as much as a delivery play that didn’t find its value proposition. On-demand companies must be faster than traditional alternatives — if successful, they can command a premium — and BloomThat didn’t overcome that first hurdle. Inside FTD, however, the BloomThat team will find delivery resources in existing FTD florist shops looking for an edge that they can use to jump ahead.
A van containing a 3D printer arrives at your front curb, the plumber knocks and, granted entrance, checks your sink downspout, which is leaking. Problem identified, she calls up the broken part on her computer and prints it in the van, installs the new downspout, and finishes the job. No inventory to carry around, just a focus on service. Amazon received a patent this week that supports this scenario. The human is the critical factor here, as they translate the customer’s issue into a plan, identify the broken or missing parts, print them (though this is a machine’s job), then installs it.