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CVS invests in Curbside, a startup that lets you buy online, pick up at store

The two companies are working together at 350 CVS locations.

Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

Drugstore chain CVS has invested in Curbside, a Silicon Valley startup that allows shoppers to order products online and pick up their orders from a local store without leaving their cars. The drugstore chain and the startup have been working together since last year, when they launched a pilot test in three cities that now encompasses 350 CVS locations. Terms of the investment were not disclosed.

The deal marks the latest example of a traditional brick-and-mortar chain attempting to bridge the gap between digital and physical sales, either through delivery or in-store pickup options. CVS has negligible online sales, but believes it can boost them by adding a free curbside pickup option for customers.

“Curbside pickup is great for the mom that doesn’t want to take the kid out of the car, great for the mobility challenged and for busy professionals,” Brian Tilzer, CVS’s chief digital officer, said in an interview. (I can tell you from personal experience that dads don’t enjoy taking kids out of the car any more than moms do.)

Curbside has raised nearly $35 million thus far from investors including Sutter Hill Ventures and Index Ventures. Curbside’s other big partnership to date has involved Target stores.

Tilzer said the CVS investment gives the two companies “aligned interests” to utilize the startup’s technology for other potential use cases for CVS. The two sides hope to eventually expand the store pickup option nationally, from its current availability in San Francisco, Charlotte and Atlanta.

Customers can place CVS orders in either the Curbside or CVS mobile apps. They are notified when the order is ready, which happens within an hour of ordering. As they approach the store, Curbside’s technology alerts a CVS worker to bring the order outside to a designated meeting area.

CVS also has a pilot test in place with delivery startup Instacart in Boston, but Tilzer said he thinks the fact that Curbside is free “is going to be the winning formula for our customers.”

The long-term question for both sides is if there’s a big enough pool of customers who don’t want to pay for delivery and also value staying in their car enough to take the time to order from a drugstore ahead of time.

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