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Stores are using delivery apps like Uber to ensure same-day delivery

AUDIE CORNISH, HOST:

This is the busiest mailing and shipping week of the year. Millions of packages will travel across the country. And time is running out for buying gifts online that will arrive in time for the holiday. Or is it? Turns out, more stores are striking deals with food delivery companies such as Uber, DoorDash and Postmates to get your holiday gift to you within hours. NPR's Alina Selyukh reports.

ALINA SELYUKH, BYLINE: One minute, some cash flew out of my digital wallet; the next...

(SOUNDBITE OF DOORBELL)

SELYUKH: Someone just left a box on my doorstep. Well, it took much longer than a minute. But ahead of this year's holidays, many more stores want to sell this kind of instant gratification - same-day delivery, once the holy grail of online shopping.

MOUSUMI BEHARI: It is really difficult and very expensive.

SELYUKH: Mousumi Behari is with the digital consulting firm Avionos. She says during the pandemic, food and grocery delivery paved the way. Millions of new shoppers turned to apps like Instacart, Caviar, DoorDash for delivery in a matter of hours or minutes.

BEHARI: If you can get your food and your groceries that quickly, why can't you get that makeup kit you ordered, you know, for your niece or that basketball you ordered for your son?

SELYUKH: The simple answer is delivery needs couriers, a whole workforce of people not only to pack orders but also drive or walk them to a bunch of shoppers at a bunch of places. Giants like Walmart and, of course, Amazon have been cracking this puzzle with their own fleets of drivers. Target bought delivery company Shipt. But for most retailers, their own logistics operation is a bit fanciful, like my random suggestion here.

Maybe like a really glamorous robot that just drives around the city.

PRAMA BHATT: (Laughter) I like the way you think (laughter).

SELYUKH: Prama Bhatt is the chief digital officer at Ulta Beauty, which recently struck a partnership with DoorDash. In six cities, the two are testing same-day delivery of beauty supplies from store to your door timed exactly for the holiday rush.

BHATT: It could either just be, you know, I can't wait to have something in my hands and go try it on and I usually go to the store, but I don't feel like I can do that right now, so this is a great alternative. It could be that I've got, you know, an event and it's - I'm time constrained and I don't have time to wait for even two to three days.

SELYUKH: The target audience sounds and actually is pretty niche. This kind of urgent service is not free. Ulta, for example, is charging almost $10 for same-day drop off. But in big cities, the market is growing. This year, DoorDash partnered with PetSmart. Uber teamed up with Buy Buy baby. Roadie, owned by UPS, made a deal with Abercrombie & Fitch. Instacart has been delivering for Dick's Sporting Goods. For stores, it's a way to make money when fewer people might visit in person, says Karan Girotra, professor at Cornell University.

KARAN GIROTRA: It's like what played out with restaurants at the start of the pandemic.

SELYUKH: He says for drivers, it's a new option for when people don't need as many rides or the lunch and dinner rush subside for food orders. For the delivery apps, it's a way to grow and try to resolve their fundamental challenge. Companies like Uber or Instacart have yet to deliver consistent profits.

GIROTRA: The problem is none of them, including the big ones, cannot yet make money.

SELYUKH: It's really expensive to pay someone enough that they agree to sit in a car or bike around to bring you that basketball or a sweater or a few makeup brushes. And more stores means more scale.

GIROTRA: The more you deliver, the cheaper each delivery gets. As you do more things, each individual thing it becomes cheaper because you can bundle deliveries. You can put more things in the same route.

SELYUKH: All the tricks that become ever so important in this whirlwind season of last-minute shopping and shipping. Alina Selyukh, NPR News. Transcript provided by NPR, Copyright NPR.

Alina Selyukh is a business correspondent at NPR, where she follows the path of the retail and tech industries, tracking how America's biggest companies are influencing the way we spend our time, money, and energy.