“Postmates looks to solve local retail’s last mile” by Tom Ryan of Retail Wire

“Postmates looks to solve local retail’s last mile” by Tom Ryan of Retail Wire

Postmates, the Uber-owned on-demand delivery platform, has introduced a new service supporting the last-mile needs of local retailers.

Under the program, Shop, local retailers create a virtual storefront on Postmates’ app, where they’ll be able to showcase their inventory with organized, configurable catalogs that feature high resolution images. Postmates will provide the retailer with a tablet to manage available inventory. Customers get access to a variety of options for getting their orders, including home delivery and in-store or curbside pickup.

Delivery and service fees range from $4.99 for standard delivery to $12.99 for priority. Unlimited subscribers receive free delivery.

Mike Buckley, who recently joined Postmates as SVP of business to guide the effort, told Glossy that Shop is designed to help local retailers meet heightened expectations for speedy online delivery created by Amazon Prime as well as to alleviate expected pressures from major carriers around shipping constraints this holiday season.

“Our intuition is that there’s going to be a lot of interest in beauty, personal care, home goods, apparel and more frequently [shopped categories], like flowers and hardware,” he said. “We’re trying to create a fun, curated shopping experience.”

Mr. Buckley, formerly VP, digital commerce operations & new business models at Nike, also expects the service to support flash sales, exclusive “drops” and other limited-time campaigns. “We think we can drive engagement to these merchants and create calls to action,” he told TechCrunch.

The move enables Postmates, acquired by Uber in July for $2.65 billion, to expand further beyond its core food-delivery offering and positions the platform as an online marketplace for mobile shoppers.

Shop’s introduction starts in Los Angeles with nearly 50 retailers, including Anastasia Beverly Hills, OWL Venice and Big Red Sun. A nationwide rollout is planned for 2021.

“This year, COVID really changed the landscape of how we purchase essentials, spend time recreationally and even how we treat ourselves,” said Heather DeLeon, director of sales, Anastasia Beverly Hills, in a statement. “Shop is such an interesting opportunity because it lets people get their hands on our products in a completely new and exciting way.”

DISCUSSION QUESTIONS: Do you see a promising opportunity for local stores to work with Postmates’ Shop program to support delivery options? What do you think of Postmates’ potential as an online marketplace?Please practice The RetailWire Golden Rule when submitting your comments.

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9 Comments on “Postmates looks to solve local retail’s last mile”

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Mark Ryski

BrainTrustMark Ryski
Founder, CEO & Author, HeadCount Corporation

4 hours 33 minutes ago

This is certainly a promising opportunity for local retailers to offer delivery options, which will most certainly be needed through the holiday season and beyond. Ultimately, the success will be determined by retailers’ uptake on this service and that will be a function of how these retailers’ own customers use and like the service. The potential exists for this to be a meaningful marketplace.2  |  0-   Share

Suresh Chaganti

BrainTrustSuresh Chaganti
Co-Founder and Executive Partner, VectorScient

4 hours 25 minutes ago

It makes a lot of sense. Postmates has the ability to execute. The value proposition is compelling, particularly if a common checkout and delivery is possible while shopping across multiple physical stores.

The sticky point is going to be whether customers will be willing to pay for the convenience. It will take a ton of marketing money to raise awareness and initial customer acquisition. And a highly curated, intuitive user experience and value for it to stick. This is a great idea that will take the very best of execution to succeed.1  |  0-   Share

Ryan Grogman

BrainTrustRyan Grogman
Managing Partner, Retail Consulting Partners (RCP)

4 hours 15 minutes ago

This is a synergistic opportunity for retailers without the staff, processes or technology to handle last-mile delivery. However, similar to DoorDash for local food delivery and Instacart/Shipt for grocery delivery, the ultimate success will depend on how well the financial model proves viable for both the retailer and the consumer. Most consumers have expectations for free shipping from retailers, especially during the holidays, so it remains to be seen if they’ll be willing to pay either $4.99 or $12.99 to receive goods from local retailers who previously didn’t have multi-channel offerings.0  |  0-   Share

Gary Sankary

BrainTrustGary Sankary
Retail Industry Strategy, Esri

4 hours 12 minutes ago

During the pandemic we’ve seen a big shift in retail spend from smaller, local stores to the large national chains. I believe that at least part of this shift has to do with the availability of touch free services like home delivery. These capabilities are difficult to scale. Having third-party partners help with the online catalogue and facilitate delivery? This sounds like a great service for both the retailer and the consumer.0  |  0-   Share

Bob Phibbs

BrainTrustBob Phibbs
President/CEO, The Retail Doctor

3 hours 57 minutes ago

I like the idea but devil is in the details. I can’t see having another website for Shop and an e-commerce site probably via Shopify. That’s twice the inventory to manage and twice the possibility for errors.1  |  0-   Share

Kevin Graff

BrainTrustKevin Graff
President, Graff Retail

3 hours 52 minutes ago

For independent retailers this is a big opportunity to provide their customers with the convenience that the “big guys” offer. This helps to level the field. The challenge may be in the duplicate website — but keep in mind that many independents still don’t have an e-commerce website up and running.0  |  0-   Share

Andrew Blatherwick

BrainTrustAndrew Blatherwick
Chairman Emeritus, Relex Solutions

3 hours 43 minutes ago

Postmates may well just be riding the crest of a wave. People have become much more aware of local shops and there has been a rise in people looking after their own community and wanting to shop more locally if possible. The issue for local stores has always been the difficulty in competing with the major online retailers in terms of delivery capability and the front end. Postmates would seem to solve this problem and therefore bring that local offering to local people.

What is critical is that the online offering is comparable to the best, availability is good and the level of service high. If all these can be achieved it could be a winning formula. And let’s be honest, after paying $2.5 billion for Postmates, Uber needs to make it so!!0  |  0-   Share

Gene Detroyer

BrainTrustGene Detroyer
Professor, International Business, Guizhou University of Finance & Economics; Executive Director, Global Commerce Education

3 hours 24 minutes ago

It is a good idea, but an uphill battle. The more you make the shopper work, even online, the less chance you have of success.1  |  0-   Share

Natalie Walkley

GuestNatalie Walkley
Director of Marketing, Deck Commerce OMS

1 hour 53 minutes ago

We’ve been predicting that we would see this happen eventually during the pandemic. However there are some challenges: 1) The final mile is the most costly leg of the fulfillment path, so more difficult to make it profitable. 2) This adds an additional channel for retailers which adds complexity for order management, inventory management, and “new” challenges not yet uncovered. 3) Perhaps the least appealing aspect for retailers is that their brand experience involves yet another vendor outside of their brand, which can potentially harm customer loyalty if things go poorly.

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