Postmates teams up with retailers on delivery in Los Angeles just in time for the holidays

Postmates shopping app

Source: Postmates

Postmates said Tuesday it is launching a new retail platform ahead of the holidays, allowing customers to get instant delivery from clothing, home, beauty and wellness retailers, and allowing the delivery company to broaden its reach.

The new platform will launch in Los Angeles, with the intent of expanding to other cities next year. While Postmates has always had plans to branch out from its core food delivery business, the coronavirus pandemic and upcoming holidays hastened the retail rollout, said Mike Buckley, the new senior vice president of business. Buckley is a former Nike executive who was hired to head the effort.

"Holiday shopping is a big driver of volume for merchants and so we wanted to get this solution to them as quickly as we could and help them tap into increased demand," said Buckley.

Customers in Los Angeles, Postmates' largest market, can access the channel through a new tab marked "retail" at the top of the company's app. The initial launch includes boutique stores like Estee Lauder's Le Labo, home goods retailer Parachute Home and men's clothier Buck Mason. Postmates hopes to attract holiday shoppers who might be leery of visiting stores in-person.

In launching what the company calls a "virtual storefront," Postmates is tapping into a largely unmined opportunity that has arisen during the pandemic — allowing small businesses, which have spent months either shuttered or scaled-down, the chance to sell their wares online without the burdensome cost of building their own delivery platforms.

The launch also pushes Postmates, which is in the process of being acquired by Uber, further into Amazon's territory by offering customers an appealing alternative to the online retailer's Prime shipping: Instant delivery.

"We actually can deliver in some cases faster than Amazon," said Buckley. "And the experience we've created helps create exposure to consumers, and then also creates an opportunity to deliver that product really rapidly."

Other day-of delivery platforms are also testing out retail. Instacart recently announced a partnership with Sephora, while DoorDash — signaling a bid for holiday shoppers — has a new deal with Macy's to provide same-day delivery from 500 Macy's and Bloomingdale's stores across the country through the retailer's online platform.

"Consumer habits are changing fast amidst the pandemic," said Carly Brush, DoorDash's director of retail. She said consumers want to know "how can they access the local shops in their cities that they used to visit in-person in hours, not days or weeks."

The push into retail by same-day delivery companies follows a flurry of new deals that Postmates, Instacart and DoorDash have announced recently with drugstores and convenience store chains, such as Walgreens and 7-Eleven, to deliver household essentials. Those partnerships point to yet another business opportunity that arose for those platforms this spring — using their digital marketplaces to connect pandemic-challenged stores to customers turning to virtual shopping during the Covid-19 crisis.

While Covid-related closures have sharpened the need for customers to turn to digital platforms during the holidays, Buckley expects that even after the pandemic ends, many customers will continue to do leisure shopping on the platform.

"I think the shift for consumers to shop more and more online and the desire for kind of instant gratification of those purchases is something that's going to increase and will stay, increase post-pandemic," said Buckley. "However, I do think that there's this moment of increased demand, but also, I think it creates a little bit of a consumer pull to support local businesses."

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