Old Navy taps Postmates to help it make same-day deliveries of last-minute holiday gifts

Key Points
  • Shoppers will be able to order online from Old Navy this holiday season and have Postmates deliver items to their homes that same day.
  • Old Navy says it will make this option free for customers from Dec. 21 to Dec. 23.
  • Postmates has been growing its roster of retailers to diversify beyond restaurants.
Source: Postmates

Old Navy is working with Postmates this holiday season so that shoppers can have their online orders brought to their doorsteps in a pinch.

The retailer, owned by Gap, has been offering same-day "buy online, pick up in stores" since last year. Now, when customers select that option at checkout, they can tap a Postmates driver to deliver the merchandise to an address within 24 hours.

Old Navy says it will make this option free for customers from Dec. 21 to Dec. 23. Otherwise, it will cost $8.99 for delivery per order. It will be available in the more than 4,000 U.S. cities where Postmates operates.

The option will be available through the end of January, but the companies are exploring longer-term opportunities, according to a Postmates spokeswoman.

"Partnering with Postmates to provide same-day, on-demand delivery creates an even deeper convenience proposition during the bustling holiday shopping season," Old Navy Global Chief Marketing Officer Jamie Gersch said in a statement.

The rollout comes as the family-friendly apparel brand has been struggling to grow sales. Old Navy offers less-expensive clothing than the namesake Gap brand and Banana Republic, pitting it against the likes of TJ Maxx and H&M. But Target and Walmart have been adding more clothing to their stores and websites at competitive prices, giving Old Navy a run for its money.

In Gap's fiscal third quarter, Old Navy same-store sales dropped 4%, missing analysts' expectations.

Gap is still planning to spin off the Old Navy brand into its own public company by the middle of next year.

The parent company, which has a market cap of $6.1 billion, has watched its stock tumble more than 35% this year as the S&P 500 Retail ETF (XRT) rose about 10%.

Postmates has been growing its roster of the retailers, including Walmart, Apple and 7-Eleven, to diversify beyond restaurants. The delivery provider said the number of people ordering clothing items via Postmates has grown 60% year over year.

Old Navy hopes this offering will bring it a last-minute surge of shoppers before Christmas. There are six fewer days in between Thanksgiving and Dec. 25 this year compared with last, which will put more pressure on procrastinators to find gifts.

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