Point Pickup Technologies, an online last-mile delivery company, has purchased white label ecommerce platform GrocerKey from the company for $42 million. Point Pickup will now be able to offer same-day delivery to retailers, including fulfillment and delivery, through their own brand, instead of third-party platforms like Instacart.
Instacart was a success delivering groceries and goods to retailers during the coronavirus epidemic. It generated $1.5 billion in revenue in 2020 and sold $35 billion. It has 9.6 million users and more than 500,000 customers who order and pick up goods.
According to Allied Market Research, new entrants are appearing in the same-day delivery market. This aligns with the industry's expected growth to $20.36 million by 2027. Companies like Amazon and Instacart, which offer this service and host a marketplace for delivery, get more than just sales revenues. They also receive all customer data.
Point Pickup founder and CEO Tom Fiorita believes that retailers should be able to control their own data. GrocerKey's acquisition brings GrocerKey's front-end consumer-facing sales platform and predictive analytics back into the hands of retailers.
Instacart customers pay a monthly subscription. They own your shopping habits, credit cards and data. Fiorita explained to TechCrunch. Because no one had delivery, Instacart was huge during COVID. Now, retailers realized that they couldn't have an Instacart-like marketplace selling their goods. I don't know my customers, their credit cards and data.
Canadian startup Tyltgo is another recent entrant in the space. It operates on a similar model as Point Pickup's GrocerKeys technology. Both cases allow the buyer to place an order directly through the merchants platform, allowing them to feel like they are interacting with the brand. Walmart announced Tuesday a white-label delivery service, which would allow merchants to access its delivery platform and get orders to customers.
Point Pickup was founded by Fiorita in 2015 in response to Amazon's increasing omnipotence. Fiorita is confident that the company's service will have a greater impact if it works its way down to small and medium-sized businesses.
Fiorita stated that we built this to compete against Amazon and Instacart. However, small businesses also need it for survival. If they allow other companies to sell their products and have their customers, these companies will not survive.
Point Pickup delivers everything, including grocery, general merchandise and pharmacy. It boasts a network that includes 350,000 drivers from the gig economy, located in 25,000 ZIP codes across all 50 states.
Point Pickup does not have an accurate picture of how many of its vehicles are hybrid or electric because of the large number of drivers who pick up and deliver the goods to customers. Fiorita believes it is likely to be on par with national rates, if any. According to a Pew Research survey, 7% of Americans claim they have an EV/hybrid.
Fiorita stated that car type is taken into consideration when recruiting and that the company is seeking ways to encourage drivers to purchase less polluting cars. Fiorita also stated that Point Pickup is an autonomous platform and can pilot other delivery vessels such as drones or autonomous robots.
Point Pickup must also work hard to improve its carbon emissions strategy to compete with Amazon and Walmart.