Postmates is an American-based quick-service company that deals with food delivery. The brand makes use of mobile phone applications that it launched in 2011 to match consumer demands to inventories. Uber acquired Postmates in 2020; Uber took over Postmates at the cost of US$2.65 billion. Postmates’ primary competitors include Grubhub, Uber Eats, and DoorDash.
SWOT analysis is a critical tool that seeks to enlighten brands with pertinent insights about the market and about the brand itself. With a brand’s knowledge of its strengths, weaknesses, opportunities, and threats, it is able to better compete in the market and grow its brand. This article takes a look at Postmates SWOT analysis.
Postmates Inc. – At a Glance
| Name | Postmates Inc. |
| Website | https://postmates.com/ |
| Founders | Bastian Lehmann, Sam Street, Sean Plaice |
| Chief Executive Officer (C.E.O.) | Bastian Lehman |
| Headquarters | San Francisco, California, United State |
| Year Founded | May 1, 2011 |
| Key Products/Services | Mobile app, website for Delivery (commerce) |
| Key Competitors | Grubhub, DoorDash, Uber Eats. |
Strengths of Postmates
A strong product
Postmates has, over the years, strengthened its product and service. The brand’s app has a tracking ability to track delivery of items, enable gifting of meals to others, and as well see the estimated time for delivery. The brand estimates that its delivery time will not exceed 80 minutes. Their service is available 24/7, 365 days a year, and it is the only brand that delivers all types of goods that are demanded by their customers.
Strong parent company
For a long time now, since its inception, the brand has been on its own and has experienced growth over that time. With the brand being acquired by Uber Eats, the brand stands to gain strong support from the industry giant. The brand can get financial, expertise, strategic, and market dynamics support from its parent company. The brand will also be protected from hostile brands looking for hostile takeovers.
Strong partnerships
Postmates has strong partnerships and strategic relationships with different players in the industry to enable an efficient and effective delivery service. The brand has partnered with merchants, retailers, riders, and restaurants, among others.
Weaknesses of Postmates
Gaps in their customer service
The service industry is basically about superior customer experience, great customer support, timely delivery of packages, and high quality of delivered items, among others. A quick look at customer reviews online reveals a level of dissatisfaction with regards to delivery time, failed deliveries of orders altogether, delayed delivery of items for hours, and bad quality of the products being delivered. Each of these dissatisfied customers, unfortunately, influences other numerous customers against working with Postmates.
There is every need for the brand to take these concerns seriously and prevent such occurrences from enabling a superior experience by its users. Users of Postmates have no option of calling and talking to a representative about their concerns and no option for refunds; this leaves a bad taste in clients’ mouths.
Lack of specific niche focus
Unlike the brand’s competitors, who focus specifically on food delivery, Postmates has to focus on a broad range of products to deliver. This broad focus means less niche-specific attention, which could compromise on niche-specific expertise. This could explain some of the gaps in customer service, especially in the food delivery niche that is very sensitive.
Limitation of orders
Customers can only order from what is provided on Postmates’ website or app. The brand does not avail all available options in the market to their customers.
Costly to those in suburban areas
For sub-urban areas and for those far away from merchants, restaurants, and all sellers of deliverables, Postmates is likely to impose a heavy charge. It, therefore, becomes costly for such customers. The delivery charges could mean more than $15 upwards.
Opportunities of Postmates
Strong growth opportunities
By September of 2021, sales for meals delivery services had grown by 17%. This was largely attributed to the impact of COVID that caused a paradigm shift in people’s lifestyles that boasted the need for delivery services. Out of all this growth, Postmates curved for itself 3% of the total growth in the industry; this only goes to show that the brand has great opportunities for growth given the upward trend.
Postmates deals with food delivery, delivery of groceries, and many more other items. This, therefore, alludes to a cumulative growth of more than the 17% attributed to food delivery only. The brand should invest heavily in strategies and technologies that will enable it to reap much more from this huge growth in the industry.
More market expansion
Postmates has the opportunity to take their services beyond borders internationally. The brand had attempted investment in Mexico which quit didn’t work. But given the expansion track record of its parent company, the brand could leverage this experience to expand globally to emerging markets.
Product innovation and expansion
The brand, through technological innovation and creativity, could create more products so that it diversifies its product portfolio. For instance, the brand could explore ‘cooking with Postmates’ and National Food Calendar, among others. Many businesses have prospered out of technological innovation that not only introduces new products but also ensures efficiency and effectiveness for existing products and services.
Threats of Postmates
High attrition rates among employees
With the increased growth in the industry, the attrition rates among employees have gone up. This move increases the cost of hiring, training, and retention of employees. The brand needs innovative and creative ways of lowering these attrition rates; this could mean more pay, work-life balance, among other benefits that critically appeal to employees.
Competition
The brand faces fierce competition from both established and new entrant delivery businesses. This minimizes the extent to which Postmates could stretch its expansion strategy. Additionally, Postmates faces competition from food-delivery-specific companies.
A focus on the food delivery niche helps competitors gain niche-specific insights that become competitive advantages over Postmates that has a broad portfolio of products for delivery.
Conclusion
Postmates is a unique brand offering a broad range of delivery services. This makes it unique but also challenging. The brand needs to develop niche-specific excellence and deliver superior customer service for every product they deliver. Growth in all elements of delivery service could define its competitive edge over its competitors.
