Bloomberg has a postgame analysis of Uber's move last week to acquire Postmates for $2.65 billion, saying that it "isn’t just about the need for consolidation in the food-delivery industry. The company also has its eyes on a bigger prize: nabbing business from Amazon.com and Walmart in the local commerce market."
Bloomberg goes on: "A combined Uber Eats-Postmates would vault the company to second place in the U.S. food-delivery market with total share of about 30%, versus DoorDash’s 45% share, according to the latest Second Measure data … But as important as the merger is in creating a bigger player with the chance of improving profitability and increasing scale, it also opens the door for an even more important longer-term opportunity to compete with big retailers for all categories in local commerce, Uber CEO Dara Khosrowshahi told investors. He explicitly called out Amazon and Walmart.
"Uber Eats has experimented with non-food deliveries. Earlier this year, the company expanded partnerships with supermarkets and local stores in a small number of markets to deliver groceries and certain essential items. But the merger will help to accelerate such efforts because of Postmates’ advanced technology platform, which offers better capabilities for batching orders together and increasing efficiencies."
- KC's View:
At a time when e-commerce has been accelerated several years into the future, expect there to be a lot of activity in this space, as everyone looks for an angle and advantage.
The one thing retailers have to be careful about is not being swallowed up by this activity. They have to put their own brand equity and their own customers first - if they do business with any of these companies, they have to be tools, not a replacement.