Postmates Moves into Retail Space with Last-Mile Delivery

Need to Know

• With a new feature, merchants can now create digital storefronts on Postmates and offer local delivery to shoppers, enabling local retailers to drive online sales.
• The option to shop retail—as opposed to delivery food or groceries—is available in a Postmates tab called “Shop.”
• The new feature has already launched in Los Angeles with 50 participating retailers.

Analysis

Food and grocery courier service Postmates is branching into the retail space, announcing a new feature that will allow local retailers to use the service for last-mile delivery.

The feature, appropriately called “Shop,” allows Postmates users to browse and shop from local retail stores. Users can then purchase items and choose to have them delivered to their homes, just as they would with a take-out or grocery delivery. Postmates also allows shops to display in-store pickup or contactless curbside pickup options.

The retail initiative is the first launch from Postmates since the company hired Mike Buckley, a Nike vet who joined Postmates in August as its new vice president of business. Buckley said the launch of Shop is meant to accommodate shoppers who are still wary of in-store shopping and to support retailers who have seen their sales sink due to the COVID-19 pandemic.

“I joined Postmates because they have had tremendous momentum and I see a unique opportunity to give smaller retailers tools to be more competitive,” he said 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.”

In addition to offering on-demand delivery, retailers who sign up for Shop may be able to use Postmates to launch timed flash sales and exclusive product. “drops” And with in-store sales declining but online sales continuing to soar—online sales in the U.S. for September increased by 43% over the same period last year, hitting $60.4 billion—small retailers may see the Postmates storefront option as a way for them to compete with established retailers such as Amazon and eBay this coming holiday season.

Postmates, which is owned by Uber, has launched Shop in Los Angeles; there are already 50 participating retailers, including Anastasia Beverly Hills, OWL Venice, Big Red Sun, Urbanic, Zadig&Voltaire, Buck Mason, and Timbuk2. The company plans to roll Shop out nationally in the US over the first quarter of 2021.

The launch of Shop is just the latest example of courier and rideshare companies expanding their offerings due to COVID-19. In April, Uber competitor Lyft began offering meal and grocery delivery. That service, called Essential Deliveries, provided government agencies, non-profits, and other organizations that work with vulnerable communities the option to request the delivery of meals, groceries, medication, and other household items from Lyft drivers. Uber, too, has pivoted during the pandemic, partnering with Cornershop in July to offer grocery delivery to customers in Canada, Brazil, Chile, Colombia, Peru, and the US.