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Impatient, lazy and time-strapped New Yorkers are in for a treat. On Tuesday, “on-demand helper” startup WunWun is launching a new service that will deliver stuff purchased from any store to consumers for free – as long as both the buyer and seller are in Manhattan.
For the past year, shoppers have been able to use the startup’s iPhone app to request on-demand deliveries (from stores and elsewhere) and services — but for a fee. For $15, the company could send one of its “helpers” to pick up a last-minute ingredient from a grocery store or retrieve a package from a client. Or, users could pay $2 for every five minutes a helper spent waiting for the cable guy or installing a shelf.
But, with its new service, WunWun (which stands for “what you need, when you need”) said it’s doubling down on delivery with a business model that’s looks more like an ad network than a traditional courier service. For consumers, free on-demand everything sounds too good to be true, but co-founder Lee Hnetinka believes there’s a big opportunity in charging brands and retailers to market to users on the verge of making a purchase.
Advertisers bid to serve relevant ads to consumers
“It’s like Google’s search model,” said co-founder Lee. “Brands bid on key words that [users] type in.”
Say you need sugar but don’t want to go get it, once you type in your request, the app could serve up a relevant ad from a partnering brand or retailer. As with Google, the company argues, users have a high intent to purchase once they open up WunWun. That means brands have an opportunity to upsell consumers on other items or try to get them to switch brands.
For now, the service isn’t serving ads, but Hnetinka said they’ll start rolling them out closer to the holidays.
In addition to the ads, the company plans to make money by charging users $20 for deliveries that don’t originate from stores and by powering on-demand delivery services from retailers interested in differentiating themselves with the extra convenience. He wouldn’t name names (as some businesses want to make a big holiday push), but said the company now has 25 brand and business partners.
Between startups like TaskRabbit and PostMates, the expected expansion of AmazonFresh(s amzn) (the online retailer’s same-day delivery service), and other new local delivery options the on-demand delivery space is getting very crowded. But Hnetinka said their goal is “own” New York before expanding into other cities like San Francisco that he said are most saturated. (The service is limited to Manhattan for now but will expand to Brooklyn in a few months, he said – it looks like other unlucky boroughs will have to go without for a while.)
Will it last?
I tested it out and, have to admit, was impressed with the speedy delivery and attentive helper. My test order (a travel-sized tube of toothpaste) arrived at the office about 40 minutes after I requested it and my helper Pat texted me frequent updates and appropriate questions (What brand did I want? Did I want a toothbrush, too?). But, obviously, service in a limited test run that includes reporters isn’t necessarily reflective of the experience one might get as it opens up to more consumers.
I also wished the company offered a few more details in its app – for example, it doesn’t tell you that the helper won’t run a price by you before purchasing if you specify the store and brand. And, before charging you, it doesn’t disclose the three percent credit card surcharge that’s tacked on.
But my larger question has to do with whether the company can accumulate eyeballs quickly enough to attract marketers – especially if it takes its time expanding from New York. Part of what makes Google’s (s goog) ad model work is its scale and, while New York is obviously a big market and WunWun consumers will likely be attractive, it’s still limited. Also, in a city with a bodega on nearly every block, it’s not terribly inconvenient to get the small items you need in a rush. And shoppers might want to see bigger-ticket items up close before making a purchase.
Still, Hnetinka said, they’re gaining traction: they average about 3,000 requests per month and have generated enough revenue to support the business without outside funding. And — if you want to get your hands on the newest iPhone or a coveted cronut, a WunWun helper will stand in line for you (as long as you’re willing to pay an additional time for the wait).