Brief:

• On-demand delivery company Postmates introduced a service that lets app users shop from local retailers, according to a press release. The Uber-owned company updated its app with a "Shop" tab that shows a selection of items that customers can order for delivery, in-store pickup or non-contact curbside pickup.
• Postmates is testing the feature in Los Angeles, featuring a product selection from retailers including Anastasia Beverly Hills, OWL Venice, Big Red Sun, Urbanic, Zadig & Voltaire, Buck Mason, Timbuk2 and Parachute Home. Postmates charges a delivery and service fee on orders, though unlimited subscribers receive free delivery.
• Postmates hired Mike Buckley as senior vice president of business to expand the service and build its footprint in the retail category. Buckley previously acted as vice president of digital commerce operations and new business models at sportswear giant Nike, which has a fast-growing e-commerce division.

Insight:

Postmates' introduction of a shopping platform aims to help smaller retailers transform their e-commerce operations with a wider range of offerings aimed at mobile consumers. Originally focused on food delivery, the Uber-owned platform follows others in its app category in expanding their services to accommodate needs particular to the pandemic.

With many people avoiding stores during the health crisis, smaller retailers have struggled with the loss of foot traffic. Those local businesses also are less likely to have the financial resources to set up an e-commerce sales and fulfillment operation, making Postmates a possible solution to generate revenue and maintain customer loyalty. As the critical holiday season fast approaches, more merchants may also be looking for tools to quickly transition more aspects of their business online. 

E-commerce has become a lifeline for many businesses as homebound consumers shop on their mobile devices. Digital sales for retailers have surged during the pandemic and are likely to continue to show strong growth until the health crisis subsides.

U.S. online sales last month rose 43% from a year earlier to $60.4 billion, according to Adobe Analytics data cited by DigitalCommerce360. That growth followed a 42% gain in August, a sign that e-commerce remains sturdy even though some of its momentum has subsided following a peak in usage in May. 

Postmates' service is in the early stages, but it's conceivable that it could grow nationwide and make the platform a competitor to other companies like Amazon, eBay, Etsy and major retail chains. A key differentiator will be the product selection from smaller boutiques and the immediacy of its on-demand service in local markets.

The offering is a sign of how delivery services have become more significant for parent company Uber, whose ride-sharing business has suffered as more people work from home and take fewer trips outside the home. The popularity of food delivery was a key reason that Uber acquired Postmates in July for $2.65 billion.