Delivery Platforms Expand Beyond Restaurant Services

Delivery apps may be known for working with restaurants for lunch or dinner orders, but they are also bringing retailers such as pharmacies onto their platforms. Walgreens and Postmates, in one case, announced a collaboration to provide on-demand delivery for shoppers seeking over-the-counter medications, beauty products, health and wellness items and grocery products in New York City.

With the tie-up between the two companies, Postmates will deliver hundreds of popular items from 174 Duane Reed and Walgreens locations in Brooklyn and Manhattan. Shoppers can order products from participating stores through the company’s website or via its Android or iOS app. Consumers don’t pay delivery fees when they sign up for the Postmates Unlimited membership service, which is available for a monthly fee.

Walgreens Chief Merchandising Officer Joe Hartsig said of the offering, “We share Postmates’ commitment to providing customers with convenient, differentiated shopping experiences, and together we can help ensure our customers are getting what they need, when they need it. Particularly as we head into the peak season for flu, being able to bring our customers convenience items, as well as cough and cold relief directly to their homes, can take the stress out of being sick.”

The Demand for Delivery

Postmates customers already seek some of the everyday items found at Walgreens. The top products that New Yorkers order, according to the announcement, are San Pellegrino, Tylenol, Pedialyte, Smart Water and Gatorade. During last season’s flu season, spanning from August to January, the delivery platform saw a 173 percent spike in orders for cough relief items and a 111 percent rise in sinus relief aids.

In fact, Postmates VP of Merchant Business Development Craig Whitmer said in an announcement, “In the last year, orders from convenience and drugstores have increased by 68 percent. By collaborating with Walgreens, we are able to provide our customers with even more convenience when it comes to everyday items that they need now.”

Walgreens is only the latest addition to Postmates’ roster of restaurants and retailers, which includes over 500,000 restaurants, grocery and convenience stores, as well as traditional retailers. The company now operates in over 3,500 cities and serves 75 of the top 100 restaurants in the U.S. (The company, for instance, recently teamed up with the burger chain Five Guys and partnered with quick-service restaurant Del Taco.)

The Delivery Market

Postmates is not the only delivery platform to collaborate with retailers other than restaurants. eCommerce grocery platform Mercato has teamed with DoorDash to provide same-day delivery of goods from independent and specialty food stores. The partnership between Mercato and DoorDash reportedly provides specialty and smaller grocers as well as independent food stores with a way to compete with large-scale players.

Mercato Founder and CEO Bobby Brannigan said in an August announcement, “DoorDash and Mercato are highly aligned in our desire to help local businesses succeed. In the next few months, we will have even more news regarding our delivery programs, including our first delivery subscription offering. We expect these developments will dramatically increase access to affordable grocery deliveries, providing huge value to consumers and the hundreds of amazing small businesses on the Mercato platform.”

Deliveries from supermarkets come with challenges, however, particularly when it comes to timing and form factor. According to The Wall Street Journal, “Grocery orders tend to be bulkier than restaurant takeout, and drivers often have to wait longer for them to be prepared at stores.” At the same time, delivery platforms that have been geared toward restaurants have to contend with grocery services that already exist, as well as offerings from supermarkets.

Walmart, in one case, offers a “Delivery Unlimited” subscription that will let consumers shop online and have their groceries delivered as frequently as they like, per reports in June. And news surfaced in July that Kroger and online grocery retailer Ocado were joining forces to create the second of 20 planned automated warehouse facilities.

Even so, Gordon Haskett Research Analyst Robert Mollins said, according to the paper, that the addition of supermarkets to the pickup lists of delivery platforms could make for more efficient use of their fleets. Grocery orders have a tendency to come sooner in the day compared to the rush of restaurant orders in the evening.

From DoorDash to Postmates, delivery platforms are growing their offerings beyond takeout – and opening the doors for consumers to receive products from grocers and pharmacies.