Can Postmates pricing be fairer?

Last week Quartz published a post on how on-demand delivery services were struggling to make the economics of delivery work for them and for customers, and focused on pricing. Postmates was specifically targeted and the post gave several examples of customers who complained that the service estimated a lower price for a delivery than was eventually charged, in some cases significantly so. The post’s author, Alison Griswold stated: “pricing on other Postmates orders can be opaque, with subtotals often couched as “estimates” and other fees added to that.”

In a response, Postmates CEO Bastian Lehmann explained that retailers charge different prices for identical products depending on the store location. Prices also change over time. The bottom line is that Postmates doesn’t know the actual cost of the items customers request when they order them. Says Mr Lehmann: “as part of our checkout process, we always display to the customer the best information we have about the items they want to purchase before they get to the checkout screen. On this screen, we list all of the requested items and the prices we believe the items will cost.” The total cost is displayed as an Estimated Subtotal and customers are told that “this is an estimate and they should expect to pay the price the merchant charges when the items are picked up… If our estimated price is too high the customer pays the lower price. Charging them the higher estimated price and keeping the money for the lower in-store cost would be unfair to the customer. If the estimated price is too low the customer pays higher price. Charging the customer the lower price would be unfair to us.”

I don’t think this is an issue of fairness but rather of user expectations: customers don’t like being surprised when they receive their bill. This is similar to Uber’s stating a surge price with a multiplier versus quoting the actual cost of the ride with surge applied. In the former method, riders ended up being surprised by the total, even though they had agreed to pay the surge price (Uber is in the process of changing this.) Another example is users’ dislike of pricing surprises, especially steep increases, on Amazon’s Subscribe & Save program  Users like to make an informed purchase decision and that includes knowing the total cost.

I’m taking Postmates at its word that it cannot know for sure what the final cost will be when users place an order, but could there be ways for Postmates to mitigate that surprise? Maybe, but they’d require a bit of work and a commitment to deliveries in the non-food space.

First, the sourcing: if I need Advil delivered, I really don’t care if it’s from the Walgreen’s a block away, the Walgreen’s across town, the CVS five blocks away, or the Target one town over. It’s Advil, it’s identical everywhere. Could not committing to a location help Postmates come up with a better estimate or would it make it worse, adding a degree of uncertainty to the process? Google Express does a good job at offering identical products from different locations, allowing the user to choose a price and a retailer. Searching for a product (say, Advil) as opposed to a merchant and a specific location is also more intuitive from the user’s perspective.

Only one pain reliever at my local Walgreen's? Inconceivable!

Only one pain reliever at my local Walgreen’s? Inconceivable!

Second, it seems, from the few locations I looked at, that product selection is very limited. Looking at pain relief, Postmates offers only Advil PM whereas searching “pain relievers” on Walgreens.com returns 1038 results. Now, surely not all are available in store but I’m willing to bet at least 100 are, and Advil PM isn’t even the most popular. That leaves users with the alternative to order something via a Custom Order, which “allows a customer to request any item they believe is available from the location but not necessarily listed in our inventory for that particular location.” That’s convenient but again, has no estimated cost, leaving more room for misunderstanding. If Postmates really wants to invest in the realm of non-food deliveries, it has to improve its listed and priced inventory.

Add an option for maximum allowed price increase under substitutions.

Add an option for maximum allowed price increase under substitutions.

Third, Postmates already offers substitutions, an indication for their shoppers to continue if a product isn’t available but only offers a “store recommendation,” leaving the item out, or canceling the entire order. How about an option to cancel the product if it’s more than 10% over the estimated price?

Finally, assuming that Postmates is stuck with retailers who cannot provide the actual price for a specific product at a specific location at a  particular time, perhaps the best way to quote an estimate is to go higher and base that estimated on historical purchase data, current pricing at other nearby locations and at online retailers. By providing an estimate at the high end of the price range, customers end up being pleasantly surprised when receiving their order with a refund. It’s like the IRS refund: not recommended financially, but feels really good to get.

In the end, it doesn’t matter how fair Postmates thinks its pricing is, it matters what users think and whether they’ll continue to use the service. If Postmates wants to succeed in the non-food delivery space, it might need to make a few changes.

Jo-Ann’s mobile app – a wasted opportunity to reach out to new makers

A nice coupon, but newbies need more

A nice coupon, but newbies need more

Embarking on a Halloween sewing project for the first time, I decided to go big and sew from a real pattern. Having found my pattern online, I took a trip to Jo-Ann, my local craft store, to seal the deal. Naturally, I downloaded their app before heading to the store and it’s not all bad. In fact, it saved me a few bucks because it offered me a 60% off coupon for my most expensive item, which happened to be the fabric. It also showed me where the store was, a bit redundant since I had Google Maps on my phone, but never mind. But that’s more or less where its usefulness ended.

A sewing project starts with choosing a pattern. At the store, there are catalogs of the patterns and customers leaf through them. After finding the pattern they want to sew, they walk over to a wall of drawers that hold all the patterns, sorted numerically and by brand. Hopefully, out of hundreds (if not thousands) of patterns currently available, the one they want in the size they want (plus or regular) is there. I was lucky. Mine was.  

The back of the envelope: a complicated list of ingredients

The back of the envelope: a complicated list of items

The second step is to decipher the back of the envelope, to decide what size to sew and what materials to buy to make it. As you can see, not a very simple task.

For those readers not wanting to strain their eyes, here’s what the wannabe tailor needs to do:

  1. Enter their body measurements to figure out their size in this pattern.
  2. Understand the yardage of fabrics and trims that are required, according to their size.
  3. Understand the quantity of notions (zippers, thread, etc) that are required.
  4. Find those items in the store and bring the items that need a specific length to the cutting table.
  5. Hope that every necessary item was purchased. If not (that’s me) return to store to pick up the missing items.

As a newcomer to sewing, I had no idea what some of the items even were, starting with the types of recommended fabrics. Satin? Broadcloth? Muslin? Fusible interface? Where can I find some in the store? What part of the costume will each fabric become? Where do I find zippers and buttons? All in all it was a frustrating experience which took me about an hour in the store the first time, and another half hour to find what I’d missed the first time. All this before I had even put a pair of scissors to the polyester.

Now, let’s reimagine the process.  

Every project starts with having all the necessary ingredients

Every project starts with having all the necessary ingredients

After choosing a pattern, the user can enter their measurements and answer a few questions to choose various pattern options such as one or two colors for the skirt, or lace or fabric for the sleeves? From this information a check-boxed shopping list is created in the app with the exact amounts for every item and where in the store to find it. Taffeta? Aisle 2, get 5 yards. Thread? Aisle 7 section B, get two 100m spools. In addition, add basic tools like fabric scissors, pins and a sewing machine needle that can sew the type of fabrics chosen. Also, since it’s almost only fabric that benefits from a tactile, in-store experience, perhaps a “just send me everything else” feature could help. Of course, even fabric buying can take place online.

Beginners need help with more than a shopping list. They need an explanation of sewing terms, fabric types, notions, and techniques. An app could include a glossary and links to an online community. Currently, the sewing community exists but it’s scattered on so many different sites. There are YouTubers sharing some excellent tutorials, there are sites where patterns are reviewed by people who have sewn them, there are great blogs with sewing tips, and there are even forums on Reddit where sewing questions are answered. It would be great if all these tools and resources were concentrated in one place.

Why is this important? Because right now none of this happens on either the pattern-makers’ sites or craft store sites like Jo-Ann. Sewing is becoming hip again and it would be great to help all the newcomers succeed, even if that success is just getting all the supplies they need in under ten minutes and in only one store visit.

Amazon, you’ve lost that loving feeling. Jet, I’m sorry.

I have been an Amazon customer for a while. A while? For a decade at least. While trying to place an order last night I’ve noticed just how much harder Amazon is working to nudge (read: shove) customers to get Prime. This isn’t news, but as someone who places an order every 2-3 months, the changes are noticeable.

A few things I noticed on my way to checkout:

  • Estimated delivery that ends up being a wide range of dates, with the end one a few weeks out. My last few orders have all arrived very near or on that end date. Even a promise of 5-8 business days for shipping somehow take weeks to prep for shipping. Also, the estimated dates only appear on the last page of the checkout, making it frustrating to understand which item is holding the shipment back.
  • The increase over time of the minimal required order to get that free shipping. It’s now a $50 order or $25 if buying books. Then there are add-ons that don’t count towards the total, or buying from sellers that are not Amazon that it ends up being a challenge just to meet that minimum.
  • The buying options don’t always make sense. The top one may be Amazon, but with a higher price than others, or it could be a seller with their own extra shipping cost, or it can be a seller, but fulfilled by Amazon. Buyers need to pay attention.
  • Shipping costs that don’t make sense considering the size of the item sold and transit time. Another punishment for non-Prime customers.,
  • Changing item costs between sessions, sometimes significantly.
  • Sudden, last minute “no longer in stock” items dropped from cart during checkout and not available from other sellers.
  • Impossible search with an overwhelming amount of irrelevant results that require vigilance as Amazon removes filters applied in previous searches (such as limiting sellers.)

I’m guessing that Amazon isn’t deliberately trying to antagonize customers. It is just optimizing the browsing and checkout process to increase purchase sums and sign up more customers to Prime, just like Pinterest is fine with irritating users because ultimately it increases engagement even as it drives away some, less loyal users. Amazon’s data-driven product decisions must make sense to them.

So, if Amazon just irritates me every time I try to complete a purchase, why am I still a customer? Well, I have started buying some products on other specially sites, but overall, Amazon usually has everything and if they don’t, they have a seller who does. Jet, the best alternative, doesn’t have such a range of products.

Jet: many tempting offers, no gift cards.

Jet: many tempting offers, no gift cards.

Yet the answer to why not Jet is not just laziness. When writing this post I realized that I go to Amazon because I almost always have a gift card balance that I need to use. An Amazon gift card, it seems, is an easy gift as the giver knows the recipient can find something they like there. It’s also an easy way for overseas friends to send a gift – for them, all that’s needed is a credit card. Amazon has made getting a gift card very easy.

Bottom line: Amazon doesn’t need my (product) love to keep me as a customer. And it knows it. Jet, please accept my apologies for never getting around to giving you a chance.

Shots fired in the ad blocking game

In that cat and mouse game between publishers and users, Facebook just announced that it now blocking ad blockers for desktop visitors to its site by removing the “indicators that tell ad-blocking software what is an ad and what isn’t.”

Andrew Bosworth, vice president for Facebook’s ads and business platform, said: “Disruptive ads are an industry problem, and the rise of ad blockers is a strong signal that people just don’t want to see them, but ad blockers are a really bad solution to that.” Facebook thinks if it can make its ads non-disruptive, fast, and secure, people won’t mind. So it announced that along with blocking ad blockers, it would give users more control over their ad preferences with the hope that they’ll fine-tune their preferences to see ads more relevant to them, thus making the ads “better.”

While I applaud Facebook’s marketing team presenting ad preferences as something beneficial to the user when it’s really a way to collect more data about their likes and dislikes, this game is not just about seeing more relevant ads. Users aren’t happy with the current state of advertising because of many other reasons, many of which they see as intrusive. They’re not happy with the web-wide tracking, geo-tracking, personally-identifying data collection, demographic data collection, the collation of all the above, and the resulting content and the disruptiveness of the ads served. They are also unhappy with security and malware in ads, but those are less common on Facebook, which claims to serve its own ads. In Facebook’s own research, they found that “the main reasons cited for using ad blockers include avoiding disruptive ads (69%), ads that slow down their browsing experience (58%) and security / malware risks (56%).”

Users are also not happy with the trade-off they are making, usually because they feel that they are giving up too much and getting too little in return. They also feel like they have no say in what data is collected and how that data is shared. Services, including Facebook, adopt an all-or-nothing approach: if you don’t agree to our terms of use, don’t use the service.

Annoying full-screen popover. Sorry, Hillary.

Annoying and disruptive full-screen popover. Sorry, Hillary.

Publishers are angry that users are blocking ads, their main source of income. “We need to spell this out clearly to our users. The journalism they enjoy costs real money and needs to be paid for,” Mark Thompson, president and chief executive of The Times, said at an ad industry conference in June where he addressed ad blocking. What I like about this statement is that after years of hiding the data collection and tracking methods in their terms of use, now publishers want to “spell this out clearly to users.” Will the entire trade-off of content for advertising be clarified?

Installing an ad blocker, though, is the one thing users can do. Adoption of ad blocking has jumped by 34% in 2016 in the US. In September 2015, 9% of non-mobile US users used an ad blocker. In France and Germany it was 27% and 24% respectively. Publishers might not like ad blockers, but right now users have a limited tool set to fight back against data collection, tracking and advertising, and ad blockers are easy to use and users see immediate results.

I do agree with Facebook that part of the game is to serve “better ads” that are less disruptive to the user experience. But it’s only part of the picture. The other part it to allow users to control where and how they are being tracked and respect their choices.

Interestingly enough, Procter & Gamble recently announced that it was shifting its Facebook budget away from highly-targeted campaigns into widespread, cheaper ones. “Targeting to super-specific audiences was expensive but didn’t result in a big difference to its business, P&G CMO Marc Pritchard told The Wall Street Journal.” Does it mean that some of the more personal data points are not even necessary for the big advertisers?

Finally, since this is a game of cat and mouse, AdBlock Plus, the ad blocker with over 50% market share, announced today that it has already found a way to circumvent Facebook’s “unblockable” ads.

In the spirit of the Olympics: let the games begin!

Instagram’s new Snaps, er, Stories

Stories above the usual feed. Adding Stories is also a new button on the top left.

Stories above the usual feed. Adding Stories is also a new button on the top left.

This week Instagram released what is being called a “down to the pixel” copy of Snapchat Stories feature called, yes, Instagram Stories. Just like Snapchat’s Stories, Instagram’s are set to disappear after 24 hours and do not offer any feedback mechanism aside from a reply. Users can either take new video or photos for the story or include anything from their photo roll taken in the last 24 hours. They see Stories from the people they already follow above their “regular” feed.

Ben Thompson at Stratechery thinks it’s a good thing for Facebook not just to copy Snapchat Stories but to introduce it to Instagram’s user base. “The first mistake most incumbents make when building new products in response to threatening new competitors is to attempt to win on features,” says Mr Thompson. He adds: “Snapchat’s Stories is a great product that has already gone through years of iterations; why, but for pride, would you build something different?” Facebook has already tried building slightly different variations of Snapchat products in order to attract Snapchat’s younger audience, but hasn’t had much success. Why not try cloning it?  

So if it’s not about different features, or “better” features, what can Facebook offer this time?

“The fact features don’t offer useful differentiation does not remove the need for differentiation: the key is figuring out what else can be leveraged,” says Mr Thompson. In this case, Facebook isn’t just launching a Snapchat clone and setting it up to compete on identical features, it’s leveraging the Instagram user base. Instead of going out and building a new user base for the app, Facebook is using Instagram not only to reach these users with the Stories functionality but also to allow those users to share those stories with their existing followers. This is an easier and faster ramp-up than Snapchat offers new users, who need to build a social graph from scratch, which isn’t that simple.  

Yet even though Instagram is not trying to compete with Snapchat on features, and can leverage its user base to get users to try it and to enables them to have a great initial experience, it’s not all rainbows from here.

First, the product match just isn’t there. Instagram is all about sharing your best (and edited) self while aiming for as many likes as possible. Stories are ephemeral, feedback-free, and supposedly authentic and unstaged. This means the two functions are kept separate in the app, which, in the current interface, is a bit awkward. I wonder if Facebook will spin the Stories functionality into a different app once adoption ramps up and is stable.

Second, will Instagram’s user base, which is more varied both demographically and geographically than Snapchat’s, even warm to the idea of sharing something that isn’t their “best selves” and without any public signs of popularity? I’m assuming that it might be nice as a distraction initially, to understand what everyone is talking about, but will they end up using it?

Third, what are the advertisers going to do? Snapchat’s advantage is that even without public signs of success, there are several products that appeal to advertisers and “engagement levels are much higher” than Instagram. Yet the flip side is that the feed-driven Instagram content “is engaging across a broader cross-section of users.” Will advertisers adopt Instagram Stories or will they be content reaching out to Instagram’s user base via the proven feed?

Snap me on Snapchat, not here.

Snap me on Snapchat, not here.

Finally, the kids aren’t buying it. They know Instagram is for their beautiful and best photos and Snapchat is for spontaneity. They’re not switching over their ephemeral posts to Instagram. Instead, they’re using Stories to advertise their Snapchat handle. I’m not sure that that is the use scenario that Instagram was hoping for!

A few mobile/product observations from my vacation abroad…

It’s been a few weeks since my last post – apologies to loyal readers. Almost all of that time was spent on vacation abroad, in Tel Aviv and Berlin, where I used some common apps in uncommon ways (read: in offline mode) and some apps for the first time. Looking back on my vacation, this is what caught my attention from the mobile/product perspective:

  1. Switching the search interface to Hebrew - why?

    Switching the search interface to Hebrew. Er, no.

    Localization, not in a good way. I’ve been on Twitter for over 8 years and have tweeted over 9 thousand tweets in English, yet the moment opened the app after landing in Germany, my Twitter ads were in German, for German products. Surely with all the information Twitter has collected about me over the years it can do better than ads I cannot even read? The same thing happened in Israel as well. Google was just as bad and switched me over to Google.co.il the moment I landed in Israel, even though I searched in English. Google’s interface also switched to Hebrew. Why? I happen to know Hebrew but if I hadn’t, like many a tourist, it would have been a real nuisance.

  2. Offline mode: getting better. Not having a data plan really proved just how reliant I was on mobile services (you don’t know what you’ve got til it’s gone.) That said, Tel Aviv has abundant free WiFi – from cafes to a municipal network covering almost all major streets. Berlin was not so generous, with no municipal network and only a few cafes offering free WiFi. However, the lack of connectivity served to show that Google Maps has greatly improved its offline functionality. Pre-downloading maps allow offline search, navigation, and zooming into street names was a great help. Sadly, walking directions were not available in offline mode, a drawback in both cities. 
    Citymapper's extremelly useful save route feature

    Citymapper’s extremely useful save route feature

    Citymapper was another offline mode star. Even though connectivity is necessary to find a route, it’s easy to save a route while connected and then access it from the app’s home page when needed. While it’s not as spontaneous as using Citymapper when fully connected, it allows travelers to use the app if they plan ahead. What I like about this feature is that it’s an acknowledgment of a less-than-ideal usage scenario and a solution that is a good compromise when the app cannot provide full functionality in offline mode.

  3. Messaging, specifically, how WhatsApp has taken over the world. What’s remarkable about it is even though the app functionally good (I especially liked the group features and the sent-received-read message indicators) that’s not its top selling point. Rather, the fact that *everyone* in Israel has a WhatsApp account enables various groups to be created, from classrooms to youth movements, huge extended families to smaller selections,and large groups of friends to event-specific groups. And those groups find it easier to communicate on WhatsApp versus an email chain or unthreaded text messages.

    ZipJet: Berlin's laundry on demand service

    ZipJet: Berlin’s laundry on demand service

  4. Copycats are everywhere. Being a tourist didn’t allow me to sample many local services but I did notice, especially in Berlin, that there were local competitors to established US-based services. One example was Foodora, a food delivery service whose pink containers I saw on bikes and scooters all over Berlin. Another was ZipJet, a laundry on-demand service with ads everywhere. I suppose the lesson for US-based startups, especially those with easily-replicable business models and technology, is to develop an international strategy sooner rather than later. (Interestingly, today Uber conceded the ride-sharing business in China to Didi.)

So, four mostly unrelated observations about my mobile experiences abroad, nothing really extraordinary. The only thing that really surprised me was just how ubiquitous WhatsApp is. It shouldn’t have been such a surprise seeing as my friends abroad have been pestering me to try it for years now. What drove the point home for me was a friend, usually a hesitant adopter of social media and has no other accounts aside from an outdated LinkedIn page, complained that he was trying to coordinate a relay race with a group of people where one runner still didn’t have a WhatsApp account. Moving the entire conversation to email, he said, was just too inefficient. Couldn’t have said it better myself.

Nuzzel: an unobtrusive yet extremely useful news app

It’s been a while since I’ve written an app review post, mostly because I haven’t found any new apps that I have been excited enough to write a post about. That said, Nuzzel is a bit different than many of the other apps I have written about. Usually, I start seeing the benefits and value of apps almost immediately. It took a few weeks to truly appreciate Nuzzel.

Let’s start with app discovery. I tend to find apps either when they’ve succeeded in getting a blog post on one of the blogs I follow or they’ve made a splash on ProductHunt. I discovered Nuzzel one evening when Twitter pals were sharing screencaps of their homescreens, which is valuable real estate, where Nuzzel was featured. So I downloaded, connected to Twitter, and immediately forgot about it.

From notification...

From notification…

A few days later Nuzzel sent a notification that a number of friends had shared an article, and it turned out that it was something that interested me that I hadn’t stumbled on by myself. It is precisely this act of separating the wheat from the chaff that is Nuzzel’s real benefit.

...to story in one click. Nuzzel gets it right.

…to story in one click.
Nuzzel gets it right.

Twitter connects me to hundreds of people sharing thousands of tweets and links a day. I rarely have the time to go through a timeline and catch the last hundred tweets and find the latest and most important stories. Due to Twitter’s chronological feed (don’t change, Twitter, don’t algorithm-ize the feed) links shared a few hours ago can get lost. Nuzzel solves this problem and manages to find the right stories that interest me and (this is the key) not overwhelm me with too many.

So what do I like about Nuzzel?

  1. The “just right” amount of notifications. Right now, I have my notifications set to the default: alert when shared by 3 friends and no more than 5 alerts a day. I’ve found that Nuzzel usually notifies me when more than 8 friends have shared an article, so it must be picking out the ones shared more in order to meet my 5 a-day-limit. Smart.
  2. Timely. The requirement of having at least a few friends share an article means that I’ll be informed about news in a timely manner.
  3. Direct link to the entire article. I’ve never encountered a multi-page/slideshow format on Nuzzel, which I really appreciate. I read articles in the app and not in an external browser, so that could be the reason I haven’t seen them.
  4. Easy to find older content. Unlike Twitter, where I can spend hours looking for a tweet I thought I saw, Nuzzel keeps it organized with everything shared by friends in the last 24 hours. It also keep track of very popular articles that I might have missed. If I’m feeling adventurous, I can always peruse items shared by friends of friends.
  5. Connected to Twitter. I’ve written before about piggybacking app functionality on the “right” social graph back when Meerkat launched last year. My Twitter graph is a mix of US news, techies, global news, financial news, activists, and sprinkled with sports, Broadway, and music. It’s a much more diverse (and interesting) group than my Facebook friends, my Instgram followers or my LinkedIn connections. For an app that’s trying to surface the news that’s important to me, using my self-curated and continuously updated list of Twitter connections is the smartest choice.
  6. Ads: I have yet to see an annoying pop-over on Nuzzel. Thank you for that.

What I’d like to see:

  1. Read time: Medium estimates a read time and adds it to the top of each post, giving users a quick way to see if they have time to read the post now or to just skim the headline.
  2. Offline reading: give users a quick way to download articles to read during a flight/subway ride. Better yet, combine the read time with offline mode and let users pick a length of time to download for. Starting with the more important articles (more shared) and down to the least significant ones, users can fill their downtime with reading.

Finally, a note on Nuzzel’s notifications: by making notifications relevant and allowing users to control their frequency and trigger criteria, Nuzzel has created notifications that I value and almost always open. Bottom line: it’s a keeper!