This customer story has been adapted from a presentation given at CARTO Locations 2018.
I’m starting this presentation with a map because I thought that would be a clever thing to do at a conference inherently about mapping, and here we’ve ‘buried the lede’.
We’re clearly looking at a map here, this is Manhattan, you can definitely see Central Park up there, and we see three regions marked in bright yellow. We have the upper east side, we have the upper west side, and we have the West Village. Inherently these three neighborhoods are kind of geospatially far from one another. They don’t really have much in common, but this is actually the thing and again, we’ve buried the lede, what brings them together?
We’re actually looking at a map of Tiffany’s deliveries in New York City and that shouldn’t actually surprise any of you. I hope that makes sense given what we know about location information, that there’s implicit information encoded in our assumptions, which we make every single day about geography. We encode stereotypes, we encode biases and, definitely, real-estate prices. This is important because there is meaning in place. Location carries weight, and location carries meaning. I don’t think anyone here would be here if we didn’t fundamentally believe that, and in the on-demand space if you don’t get local, you won’t get far, and we get it.
This is a bit of a shameless plug for our current advertising and marketing campaign, but I do think it’s actually pretty funny so these are throughout the subways and it’s actually relevant here, so I will read this: When your friends invite you to Indian food but you’re not really in the mood for friends. We get it.
I think this one makes perfect sense for the location being in Williamsburg: when you want a dessert that’s as rich as the parents paying your rent. We get it.
Postmates: leader in on-demand delivery in the US
I’m Enu, the Data Analytics Lead at Postmates, the leader in on-demand delivery in the US. As our title suggests ‘15 million miles of burritos later’, we’ll be dipping in a bit into our field notes gather 15 million miles of a long burrito road, we’ll talk about the new economy, the cube, our four sided marketplace, how we’re changing commerce on the local level, and most importantly, we’ll have some fun along the way.
Before we do though, I do want to get people a little more familiar with Postmates. It sounded like by show of hands we’re new to you and that’s good. Definitely, have some new customer promo cards here, so we’ll get you set up by the end of this conversation, always got a hustle.
Postmates enables anyone to tap a button on their phones and get anything from any merchant delivered to their door in minutes. While some logistics companies try to build a warehouse this side of the city and then funnel goods in, we’ve always believed in a simple philosophy that our cities, our towns, our communities are our warehouses. Anything, anywhere, anytime, we get it and we get a lot of things. We were founded in 2011, currently available in 300 cities in the US and Mexico, and we’re completing about 3 million deliveries a month with an active fleet of 150,000 postmates transporting over a billion dollars worth of goods.
We’re doing all of this by connecting consumers with merchants and postmates, all interacting in this new economy. When folks think about on demand, traditionally it’s a three sided marketplace. The fourth often overlooked, and equally important, are the communities we operate in and we’ll talk a little bit about that later on.
Saving customers more than 11 million hours in time
Before doing so, I do want to make a quick comment about data at Postmates, and who we are. The team has always been influenced by journalism. We draw parallels between what we do in reporting and analysis and journalistic reporting and analysis at our core. We believe that improving the world starts with understanding it, so we’ll talk a little bit about the things we’ve learned along the way that help us understand the world that we do operate and how it’s changing.
So starting with customers. Covering 1/3 of US households, which is a lot of location data for the geo nerds here, we’re seeing firsthand the importance of giving consumers more choice and access than ever before. We’ve delivered over 175 million items across 300 cities and Mexico, at all hours of the day. Beyond the goods themselves, the superpower of Postmates is the scarce commodity of time. That’s the time we’re able to give back to busy parents, senior citizens, people with mobility issues, you name it. __Our customers have already saved more than 11 million hours through the platform. __
What customers want changes throughout the year, throughout the week, and within a city itself. We are healthier in summer than in winter, and our data can reveal when the flu is breaking out, and when ice coffee season is about to start. We also observe how what we want changes throughout the week. 30% of all bagel deliveries happen on Sunday and it’s a little bit more evenly distributed in New York City, because this is bagel town. We’re certainly the best versions of ourselves on Mondays, ordering salads, and juice, and kale, and then by Friday we’re loading on carbs and eating a whole suite of Fuuka sandwiches. We like to drink during elections and during presidential debates, and especially Bud Light on the 4th of July. Within New York City itself, we have our own preferences for alcohol and beverages. Might be difficult to see here, but Tribeca is definitely a Tito’s vodka kind of place, and the West Village consumes really overpriced rosé. Again, location carries meaning.
With all this choice at our fingertips, let’s take a quick look into what customers are actually ordering. This will be a little bit interactive. I’ll put two deliveries on the board, walk through the details, and you guys will have to guess which one is fact and which one is fiction. So audience participation is requested, encouraged, etc.
Our first delivery is in New York City, it’s from a place called Shabu Tatsu, delivery is for zero dollars, and the request is: ‘Please go there and pretend you’re going to eat and make a reservation for three people under the name Michael Jackson. There should be an hour wait. You don’t have to wait, and if you’re female, put Janet. That’s contestant number one.
Contestant number two is also a delivery in New York City. It’s from Barnes & Noble, it’s for a $18 book and the book is called “1 Rich People Problems Book” and, for additional bonus context, it was delivered to the Trump Soho.
Any guesses which one is fact and which one is fiction? Two is fact! One is fiction only because I wanted to use this photo of Michael Jackson. This is actually also a real delivery request, I abstracted the names. This shows with an open platform you can get some interesting things.
Postmates: a modern, mobile and independent workforce
We have customers, we have our fleet, and I really want to stress how amazing our fleet are. Behind me is just a quick visualization of a few hours of deliveries in LA where we light up the city. Our fleet has traveled over 200 million miles through rain, snow, storm, slush… everything in between. They’ve generated over two hundred and fifteen million dollars in earnings. Many are students, aspiring entrepreneurs, or just parents with a little extra time after dropping off the kids.
Over these two hundred million miles we’ve recognized you don’t need a two-ton car to move a two pound burrito. 82% of our deliveries in New York City are emissions free and we are a company investing in new modes of urban transportation. We have an e-bike and scooter program in multiple cities, and we also have a robotics unit which I can speak to later. The goal here is to increase efficiency in moving food products and parcels. On the topic of food products and parcels, what we deliver varies quite a bit and, again, our postmates always go above and beyond. We deliver from 30 categories, from furniture to ice luges, to late-night medicine runs and diapers.
One of my favorite things to track is the growth and explosion in avocado toast deliveries. If we were having this conversation in January 2016, avocado toast was a thing in four cities and now it’s being ordered and delivered in over a hundred. It’s actually not that easy to deliver depending on whether it’s a fried egg or a poached egg. One of the other great things, this is kind of insane, is how much pet food we deliver. This is the pet food map of New York. Amazing category for us. Our postmates have literally moved over a hundred thousand crickets, myself included. You can pick them up with Petsmart, they are an actual good you can buy. New York City is definitely a dog city, with a few pockets of cat lovers, and one community of hamster lovers and I don’t know what neighborhood that would be in Brooklyn, but again location matters.
So another round of fact or fiction, this time focused on the amazingness of the fleet. First delivery is in Seattle from ‘General Store’. This is basically our General Store, you can order from anything, we’ll go pick it. Total is eight dollars and forty eight cents, and here is what the customer asked and our postmates were obliged to do: “Order one Reese’s Peanut Butter Cup, take one peanut butter cup out of the package, place it directly into my mailbox. You can keep the rest of them”. Again, above and beyond postmates are amazing, I guess they’re helping folks out with their dietary regimens as well.
Delivery two is in Raleigh, Durham, it’s from Kroger. A total of sixty dollars and twenty-nine cents. I’ll let you guys read part of this yourself, I think we’ve all been there. I did omit one part from the second delivery which was the customer said ‘hey no more than 75 bucks’ and they were able to get it in sixty so I feel proud about that they’re judicious and they’re frugal at the same time.
So fact or fiction, what are we thinking? I trolled all of you, they’re both fact. This is real, humans are great.
Enabling partner merchants to grow 3.7X faster
So we talked about customers, we’ve talked about our fleet. Let’s talk a little bit about our partners, the merchants we have. We’re giving local retail a new lifeline to reach customers. Corner stores once confined to corners are now reaching new audiences. We’ve delivered from a quarter million merchants across the country. We have 25,000 in-network partners and about eighty percent of these are unique to Postmates. For folks who do join the platform, they are seeing 3.7x growth after joining Postmates. Once a partner joins the platform, we’re able to expand their reach and introduce them to new customers. This is a quick case study, this is one of the stronger partners on our platform. We basically converted them into a partner, they grew a thousand percent new customers and actually took market share from some of their competitors.
Not only are we extending your geographical reach, we’re actually saving customer time and Postmates time based on an integration with a merchant. Ultimately, we’re also just moving things further, in this specific example, dropoff distances increased by 42%. We will take your product, we’ll bring it to new folks, expand your reach, you’ll see new customers and then also, actually physically move it further, so it’s great.
For our larger partners, and I don’t have too much time to dig into this but we do use location data and demand patterns to help them plan. How and where do you launch new stores? How and where do you penetrate new markets?
The last thing I learned so far in Postmates is that if you already have a stock slide with Danny Trejo on it you should just talk about it. So it turns out Danny Trejo is a taco store owner in California and one, he’s amazing, two, the fact he owns a taco place or a chain of taco places in southern California is also amazing, but I think the quote shouldn’t go unnoticed: ‘Postmates delivery adds to our growth with new customers, doubled revenue each week and new jobs. We’ve added personnel staffing in the front of the house so we can handle the volume.’
The Ripple Effect
As we think about all these different components, our customers, postmates, merchants, putting it all together, how are we impacting communities? When you put it all together, customers spending a little bit of money, postmates are earning money, driving it towards local partners who are producing more, selling more, and hiring more. There’s a sort of economic multiplier and economic effect that we’re seeing.
In a study in Postmates markets versus other non Postmates markets, we’re seeing a one percent lift in employment growth, about a quarter billion dollars in increased GDP, and $6.6B in total economic activity. This is, again, from the accelerated spending, sales and hire and rehire cycle. Every dollar spent in the platform generates economic activity in the community and then we can bring communities closer together by facilitating this trade.
As we’ve talked about local, and about neighborhoods, and about communities, I wanted to share a community-based import-export map of Manhattan. The yellow regions here are primary net exporters, they’re shipping out their goods, tacos, burritos, ramen, etc. Black is our net importers, people consuming this but not actually contributing back to the communities, and greys are our neutrals, the folks with our balance of trade.
We talk about this a lot internally and see the incredibly powerful force of the app in bridging communities and enabling exports from neighborhoods on one side of town to reach neighborhoods on other sides of town. We see this in San Francisco with the Outer Sunset and The Mission in LA, we have these communities that are now connecting and we talk a lot about the perfect city. San Francisco is going through this growth phase right now, and you can see which neighborhoods have Safeways, and have supermarkets, and how those items are moving. If you’re playing SimCity and it’s real, and you probably want to have a burrito place, one place to get kale salads, and then one place to get groceries, and maybe a soup dumpling place depending on the market.
I do want to say this in San Francisco, in LA, and really anywhere in our backyard here, we see across the country in cities and towns, big or small, wherever locations are in this new economy that those locations carry meaning.