No Pots & Pans isn’t yet available on-demand, but that’s where we’re going. Not yet being in the on demand business, I recognize that I’m not the best person to comment on the alleged on-demand “apocalypse”, but the idea seems ludicrous to me and I’m heartened to see that I’m not alone.
So, SpoonRocket shut down. Bad for them, but a harbinger of a broader collapse in the rapidly growing on-demand economy? I think not.
SpoonRocket sold and delivered hot meals for under $10 (previously under $8) and in under 10 minutes. They built their business by targeting college markets. I expect those factors combined to drive an average order value of ~$15. That’s a tough business when the cost of delivery is a least $3 and probably closer to $5.
Mentioned in the story of their failure was the fact that they had achieved positive contribution margin. If that bears mentioning and you’re in the food business, you’re not charging enough. SpoonRocket’s failure isn’t a commentary on the on-demand economy. It’s more proof that lower tech consumer businesses like ours must try to make money, and FAST.
There will be more failures in the on-demand space — the race to the bottom in delivery, Uber for pets, etc. — enormous opportunity remains in bringing differentiated, high quality services to customers. In the food business, Munchery, Sprig, and the meals-by-mail businesses continue to thrive.
Prove to me that customers don’t want more choices, better services, all available when and where they want them and I’ll believe the apocalypse is underway. Until then, don’t believe the hype.