Postmates

Postmates Is Updating Its App To Go After The Grocery Market With Deeper Supermarket Integration

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Postmates has always wanted to be the go-to app for on-demand delivery of local items. It took off thanks to the launch of its Get It Now app, providing hundreds of warm meals a day to lazy, hard-working,* hungry startup workers throughout San Francisco. But now it’s expanding to also help users feed themselves at home, with an update to its app that provides fast delivery of groceries as well.

Postmates users can already request delivery of grocery store items through its existing app, but there’s a catch — you have to actually know what you want before placing an order. Even without inventory or help from stores, groceries are already the No. 2 category for deliveries, and the average order from a grocery store is $41. Postmates had previously announced a partnership with Whole Foods, and orders have been up 240 percent month over month since the pilot.

But the update to the app — which Postmates expects to go live next week — will take things a step further. The updated Get It Now app simplifies the process of outsourcing your grocery shopping, by providing an inventory of items that users can have delivered. Users of the app can check out local grocery stores like Whole Foods and Safeway within Get It Now and navigate a Pinterest-like menu of items that can be purchased and delivered within an hour.

As part of the rollout, the startup is working with merchants like Whole Foods to facilitate orders at stores. According to founder and CEO Bastian Lehmann, Postmates learned a lot from its test with Whole Foods, such as how couriers should navigate through the stores, where to find various items and the like. It’s looking to make that even easier for couriers, by giving them express checkout, and stores have agreed to help pre-package orders. As a result, the startup hopes to get its average delivery time for groceries down from 42 minutes, which is where it stands now.

The company has also been growing its number of couriers, and especially those with cars, to support the increased focus on groceries. Lehmann says it now has nearly 150 Postmates couriers, and is adding 10-20 per week.

In addition to the expanded focus on groceries, Postmates will also be testing out a new pricing scheme for deliveries that don’t have to take place in under an hour. The economy pricing system, which will be perfect for stuff like groceries, would cost around $4 for deliveries within a three-hour window. That compares to its current dynamic pricing structure, under which deliveries range anywhere from $5-$12, based on how difficult they are.

The grocery delivery business isn’t exactly a totally new idea. Companies like Kozmo tried to capture the local delivery market in the Web 1.0 world. And there are newer options like FreshDirect or Safeway’s own delivery service, as well as startups like Instacart going after that opportunity. For his part, Lehmann says Postmates’ advantage comes from “doing more and doing more faster… when it comes to urban logistics.”

Postmates has raised $1.75 million from investors like Crosslink Capital, AngelPad, SoftTech VC, and Matrix Partners, as well as angels that include David Wu, Thomas Korte, Naval Ravikant, Russell Cook, Russel Simmons, Walter Lee, Andy McLoughlin, Scott Banister, Paige Craig, and Jawed Karim. The company has 12 full-time employees and is headquartered in foggy San Francisco.

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* So hardworking, they can’t get up from their desks to walk down the street and pick up Jamba Juice