Dive Brief:

• Pink Dot, a quick-delivery grocery and convenience chain based in Southern California, has entered into an exclusive partnership agreement with Postmates for on-demand delivery service, the companies announced in a press release.
• The partnership comes as Pink Dot plots its expansion in Southern California and beyond. The grocery and c-store chain recently opened a new Los Angeles location and has plans to open stores in Santa Monica, Phoenix, New York and Chicago. 
• Postmates holds the number one market share among delivery companies in Los Angeles and the southwest U.S., with nearly 80% more market share than its next largest competitor, the company said, citing research from Second Measure. 

Dive Insight:

Pink Dot has been around for 30 years providing delivery for food, groceries and liquor — originally using a fleet of Volkswagon bugs. Based in West Hollywood, the chain's sales have been increasing since the company refocused its marketing toward millennials. The company rolled out a new logo and an artsy Instagram account last year. It has also teamed up with a mixologist to offer on-demand cocktail kits and a chef to upgrade its menu of fresh sandwiches and salads. As the store plans to expand beyond Los Angeles, the partnership with Postmates will give it a delivery partner that's consistent across markets.

Postmates, meanwhile, operates in 2,940 cities in the United States and Mexico. Access to restaurants helped spur its growth, but customers also use the service to purchase everything from aspirin, batteries and laundry detergent to Slurpees and beer.

Postmates' success has led the company to file initial paperwork to go public. The added investment of the IPO should help Postmates expand into more markets, evolve its technology and have more money to spend on marketing. That will be key as Postmates already has tough competition with the sheer volume of delivery options, including Uber Eats, DoorDash, Caviar, Amazon and GrubHub.

Pink Dot isn’t the first c-store to partner with Postmates. 7-Eleven has been a prominent partner on the app with popular deliveries of snacks and hot food since 2015. For 7-Eleven, the partnership has given the chain a way to capitalize on the rise of delivery services while also battling competitors. Wawa began a pilot program with GrubHub in 2017 and QuikTrip began testing delivery with Uber Eats in 2017.

Postmates also partners with Walmart, CVS and PetSmart, giving traditional brick-and-mortar stores a way to reach app-happy customers. The company launched a grocery delivery service, Postmates Fresh, to directly compete with Instacart and Amazon among its customers who already pay a premium for meal delivery.

Since Pink Dot originally started as a delivery option, customers shouldn’t notice major changes to the service. That may make the collaboration smoother than it would be for other c-store and delivery app partnerships. As Postmates continues to expand, Pink Dot may be a good companion for the ride.