Postmates Serves The Desires Of Always-On Consumers With Chipotle Deal
Its users are seeking the perfect marriage of immediate availability and high-quality personalization, the delivery start-up finds.
When Chipotle struck its delivery deal with interactive courier service Postmates last week, playful headlines joked that there would be “no need to leave home ever” for devotees of the Tex-Mex quick serve restaurant chain.
But the kidding contained a grain of truth about the expectations of today’s connected customer: People actively want all of their favorite items to be available to them instantly through their smartphone. And when these items — whether a burrito bowl or an eye shadow palette — can be customized on-demand, all the better.
The competition for both app-based restaurant reservations and food ordering is changing the way physical businesses market themselves and ultimately relate to their customers on a daily basis.
The On-Demand Influence
Consumer desires for always-on availability and intense personalization are interconnected — they want something now, but they also want it to be customized and of high quality — and that is the crux of why Postmates has been able to succeed.
Founded in 2011 with the goal of delivering anything users could want in under an hour, the San-Francisco based start-up has always prioritized customer experience. When it expanded to other cities — and, most notably, launched its API enabling third-party sellers and apps to offer local delivery via Postmates couriers in late 2014 — the stage was set to take the nature of on-demand a step further.
There are, of course, dozens of online and mobile delivery apps, but the diversity of Postmates’ offerings make it unique. Its on-demand delivery platform connects customers with local couriers, who purchase and deliver goods from any restaurant or store in a city, many of which don’t deliver in any other capacity. This means that its reach goes beyond even that of the near-ubiquitous Seamless and its sibling company, GrubHub, which counts only a set number of restaurants amongst its partners.
As GrubHub execs told investors this week, the service currently takes in 235,000 online meal orders daily — a 33 percent year-over-year increase, but it’s still just 5 percent of the total takeout services market.
And with competition from the likes of Uber, which this week said it will begin taking food to customers in Chicago and New York, restaurants will have even greater options to connect with local patrons.
Marketing That Delivers
Interestingly, because Postmates will send its couriers to any restaurant or store, the company had previously been allowing its customers to order items from Chipotle, but without an official deal with the chain. CEO Bastian Lehmann told Re/code that Postmates delivered $500,000 worth of Chipotle orders in the first quarter of this year alone, but both he and Postmates have thus far declined to provide details on what will change now that the two companies are officially working together.
Still, inking an official deal is sure to be a major get for both sides, as its likely to increase sales volume and standardize delivery costs — The New York Times reported that the cost of delivery, which is based on distance, will begin at $4.99 and not exceed $7.99.
Perhaps the most important part of the formal relationship between a brand like Chipotle and a startup delivery service like Postmates is the mutually beneficial marketing that both entities take on. In addition to providing a new avenue for Chipotle to sell its food, the other big opportunity is in Postmates expanding the chain’s digital presence. Even if a person isn’t ordering Chipotle for their home or office, they’re now being given an extra reminder that a nearby outlet is there for delivery, pickup, or even eating in.
For the most part, this deal is about delivery and discovery. And while a delivery fee approaching ten dollars certainly isn’t cheap, Postmates devotees say that it feels like the ultimate personal luxury to customize an order that contains everything from a Chipotle burrito to a bottle of wine to some laundry detergent. Here, too, the ideas of “luxury” and “convenience” can help local businesses better understand how to segment their audiences. Armed with that deeper information about people with the means and desire to order on Postmates, local Chipotles can discern who their most loyal customers are as well as attracting new ones by crafting marketing programs directed at this category of consumers.
Essentially, the company provides what feels like a personal assistant to each user, someone that can pick up everything they want and be “home” in an hour. There’s that marriage of immediacy and personal service again — the reason that Postmates seems primed to succeed as a staple of the on-demand economy. Restaurants and retailers alike should take notice.