The app-based delivery service Postmates—best known for offering on-demand delivery from local restaurants and grocery stores—is now delivering non-food products from local retailers.
Starting Tuesday in the Los Angeles area, a new function called “Shop” will appear in the Postmates app. Retailers using the service can offer on-demand delivery, in-store pickup or non-contact curbside pickup services. They also can create a virtual storefront in the Postmates app that gives customers access to their products. The virtual storefronts allow retailers configurable catalogs, including-high resolution images. Retailers can offer customers delivery through the app.
A Postmates spokeswoman says the company will roll out the local shopping function to other markets in the coming months but did not provide details. For now, she says, Postmates is focused on increasing the number of participating retailers in greater Los Angeles.
In the Los Angeles area, consumers can now use the Postmates app to browse inventory from Anastasia Beverly Hills, OWL Venice, Big Red Sun, Urbanic, Zadig & Voltaire, Buck Mason, Timbuk2, IRO, Industry of All Nations, Vardagen, Coutula, 12th Tribe, Hourglass, Supervinyl and Parachute Home. Consumers pay delivery and service fees. Subscribers to Postmates’ Unlimited service will receive free delivery. The Unlimited service costs $9.99 a month or $99.99 annually. Merchants usually pay a percentage of each order as a fee to Postmates.
Former Nike Inc. executive Mike Buckley recently joined Postmates as senior vice president of business to lead the new retail category. Before Postmates, Buckley served as vice president, digital commerce operations and new business models at Nike (No. 24 in the 2020 Digital Commerce 360 Top 1000).
“I joined Postmates because they have had tremendous momentum and I see a unique opportunity to give smaller retailers tools to be more competitive,” Buckley says in a statement. “Postmates’ mission is to enable anyone to have anything delivered on-demand, and that goes well beyond prepared food. Now more than ever, we want to provide a solution to local retailers to help them get back to business and reach new customers.”
The spokeswoman says Postmates has delivered “basically anything” for some time, but decided to make retail its own category because of the pandemic. “We saw a need for this with the pandemic hitting and stores not able to have customers in their store. With the holidays approaching, the timing seemed right,” she says.
As the COVID-19 crisis drags on, shoppers are flocking to online shipping, potentially putting local stores at a disadvantage. According to a Digital Commerce 360 and Bizrate Insights survey of 1,000 online shoppers conducted in early September, 77% of online shoppers plan to purchase more than half of their holiday gifts online and 89% of shoppers will buy at least 25% of their holiday gift purchases online. Also, 26% of those surveyed expect to make limited physical store purchases.
In July, Uber Technologies Inc. said it would spend $2.65 billion to acquire Postmates. According to Bloomberg News, the all-stock transaction was a bid to accelerate a path to profitability set by Uber CEO Dara Khosrowshahi and deliver growth rates once typical of Uber’s ride-hailing operation. Both aspects of that strategy rely on food delivery, which has gotten a boost from the coronavirus pandemic. At the time, Uber reported it expected to close the acquisition some time during the first quarter of 2021.
Earlier this year, Postmates launched Curbside Pickup designed to help merchants accelerate reopening during the coronavirus-related lockdowns. That service enabled customers and Postmates drivers to pick up orders curbside rather than going into the physical stores. Also, Postmates offers “delivery as a service,” which allows online merchants to add Postmates as a delivery option to their app or ecommerce site. Merchants using delivery as a service pay delivery fees instead of a commission.