For urbanites who love Postmates but would rather their deodorant come from Le Labo than the drugstore, a new app has launched to elevate the same-day delivery experience.
Now available in New York and Los Angeles, FastAF was created by VC-backed shipping logistics startup Darkstore. The company has received $30.2 million in funding and previously handled same-day delivery services for the DTC sites of brands like Nike and Levi’s, but recently pivoted from brand sites to its own standalone app to fill a gap in the same-day delivery market. With free shipping on its two-hour deliveries to attract customers, FastAF offers a curated group of trendy and premium brands, most of which did not previously have same-day shipping options.
“There was a really quick and elegant way to get your groceries, but not a really quick and elegant way to get the brands that you have a high affinity toward,” said Lee Hnetinka, co-founder and CEO of Darkstore, on why the company pivoted.
Categories on the app span premium and DTC brands in beauty, personal care, food, accessories, health and wellness, and electronics. In beauty and personal care, the company works with official partners including PYT Beauty, Uoma Beauty and Moon Juice. These partner brand products are purchased wholesale or on consignment. It also stocks goods from a range of popular brands including Le Labo, Glossier, Byredo and Drunk Elephant, which the company purchases “directly from the brands,” said Hnetinka.
“We felt deeply that when we were launching, we wanted to have a very attractive selection for our customers in a few categories,” said Hnetinka.
“We really liked the curated selection,” said Mary Schulman, co-founder and CEO of PYT Beauty, on why the brand chose to partner with FastAF. “We like the brands that are alongside us.”
The adoption of same-day delivery options has taken off during the pandemic: Sephora has partnered with Instacart, several beauty brands including MAC Cosmetics and Anastasia Beverly Hills now ship through Postmates, and Coty has inked a deal with GoPuff for 30-minute delivery.
Darkstore had been planning the launch of FastAF before the outset of Covid-19, but sped up the beta launch to the summer as a result of pandemic demand. It officially launched in Los Angeles in September and in New York in November. The timing for the launch comes as experts are predicting a shipping logistics “nightmare” for the holidays as people rely on online deliveries during the health crisis. Holiday e-commerce sales are expected to surge by 25% to 35% compared to last year, according to Deloitte.
“Due to restrictions on shoppers because of the coronavirus, we have seen an unprecedented spike in online shopping and an incredible pressure put on shipping and supply chain partners,” said Delali Kpodzo, the head of marketing at Uoma Beauty. “The ability to cut through the inevitable shipping delays during the busiest shopping season is critical.”
“We’re going to see the vast majority of shoppers doing their shopping online and it’s going to be challenging on the distribution system,” said Schulman. FastAF is providing the brand with two-hour shipping for the first time. “There are a lot of last-minute shoppers out there, so we need to make sure we take care of them too,” she added.
Unlike Instacart, which relies on shoppers to buy items and then deliver, FastAF uses warehouses in central city locations to keep delivery speeds fast: In New York, its warehouse is located in Flatiron, and in Los Angeles, it’s in Santa Monica. It has partnered with DoorDash to offer the deliveries via DoorDash couriers.
The business model is not without its challenges. Real estate for a warehouse in a city center is not cheap, and two-hour delivery platforms have been under scrutiny for pay practices with workers. DoorDash, for example, reached a lawsuit settlement for $2.5 million on Tuesday for misleading users on driver tips. FastAF plans to eventually charge a rate of $9.99 for deliveries under $35 and does not have a specific date set when shipping charges will go into effect. Above $35 will remain free.
“We’re comfortable at the moment not charging” because the premium price points ensure high cart sizes, said Hnetinka.
Hnetinka was inspired by the advanced delivery logistics in other countries, saying that “the U.S. is way behind” in delivery, with Chinese platform JD.com’s quick local delivery model serving as a “huge piece of inspiration” for the company. “This experience has been around for a long time in places like South Korea and China,” he said. “Delivery there is in minutes. The networks there are way more mature, sophisticated — they’re way more built out.”
While holiday is a crucial time to offer the service, brands are seeing quicker delivery as a long-term necessity.
“Beyond this, it can just be a great fast solution. I think holiday makes perfect sense, but I think there’s great opportunity beyond holiday, as well,” said Schulman.
“It’s clear that expedited shipping and same-day delivery are here to stay, and it will soon become standard for both online and bricks-and-mortar retailers,” said Kpodzo.