The downfall of Shyp: What's next for on-demand delivery

package mail shipping
Shyp could not make it in on-demand delivery. (Pixabay)

On-demand delivery company Shyp recently announced it would be closing down. As customers are buying online and shipping more packages than ever before, what happened?

According to Kristin Smith, COO of Dolly, an on-demand moving and delivery company, the process for consumers to ship and receive packages is onerous, and shipping and logistics for moving around items are a challenge for everyone. Therefore, Shyp had the opportunity to really help consumers and businesses.

"However, the challenge when you are shifting a paradigm is that you have to build and navigate the company wisely to allow the time to become an indispensable tool for customers," Smith told FierceRetail. "Related, Shyp hadn't figured out a business model that matched their customers' willingness to pay with the costs required to execute in the short term, or even looking out to the future."

Ultimately, Shyp sacrificed sustainability of the business for growth in the short term.

However, Smith says there are still many on-demand companies growing, thriving and providing a sustainable business model.

"Dolly, of course, comes to mind in the 'transport anything' space, but there are transportation as a service companies (Uber, Lyft, etc.) across the world thriving, as well as delivery services providing value to business partners and end consumers alike (Postmates, Instacart)."

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Although each of these companies has different positive attributes, each has been able to find their core market and serve it without spending all of their resources. 

"In short, you either need to find your customers, figure out how to super-serve them, and then find a sustainable business model before you run out of money—or raise a ton of capital to buy you the opportunity to scale and find the business model at the same time," she said.

Smith believes that some version of Shyp will re-emerge in the future, but with a different business model.

And it will have a lot of challenges ahead, as consumer expectations are high and constant innovation is required. And Amazon has already set the consumer bar high, so fast and inexpensive delivery is a must.

"As precision personalized delivery becomes more available, it will be expected everywhere. This will stress and change supply chains and require seamless integration for inventory, delivery options and customer interaction," Smith said.

In the near future, Smith says that shipping is going to be as personalized as the rest of the buying experience and that customers are going to demand control over how it happens. So in order to prepare, retailers should think about what the customer needs and wants, and work backward. 

"This will include looking at their supply chain and figuring out how to position the right products closer to the customer to allow for faster and more flexible responsiveness, rethinking purchasing experience and fulfillment strategy to allow customers to buy and receive inventory—whether it's at a physical showroom or an e-commerce site," she added.