• Last-minute shoppers are running out of time to get gifts delivered by Christmas.
• Small and medium-sized businesses are hoping to capture late holiday shoppers by offering local delivery powered by apps such as Postmates, Roadie and DoorDash, which can often deliver goods in a few hours or the next day.
• Neighborhood retailers have been slow to offer these types of services in the past, but the pandemic pushed many stores to expand their delivery options.

With just a few days before Christmas, shoppers are running out of options to receive their holiday gifts in time to place them under the tree. 

But all hope may not be lost for last-minute gift buyers. A growing number of small businesses are harnessing the pandemic-fueled shift to online shopping and their proximity to customers' doorsteps to partner with services that guarantee deliveries within the hour or on the following day.

On-demand delivery services such as DoorDash, Roadie and Uber's Postmates are just a few of the companies that are working with neighborhood retailers to help deliver goods to nearby shoppers. 

The partnerships come in handy at a crucial time. This holiday season, online shopping has strained retailers and shipping carriers more than ever before.

Early on in the holiday season, there were fears that millions of packages a day could be delayed from Thanksgiving Day to Christmas. Since then, shipping carriers have expanded their delivery days, while many consumers appear to have heeded the warnings of "Shipageddon." Now, it's likely that about a million packages a day could be delayed until after Christmas, said Satish Jindel, president of ShipMatrix, a software firm that analyzes shipping package data.

This late in the game, online shoppers can turn to curbside pickup or buy online and pick up in store to grab last-minute gifts. Aside from that, shoppers have few remaining options to get an item shipped to their doorstep in time for the big day. 

Dec. 15 was the official Christmas Eve delivery cutoff for UPS, FedEx and the Postal Service. Amazon Prime subscribers have until Wednesday to get Christmas Eve delivery on select items eligible for one-day shipping and until Christmas Eve to get products that can be shipped on the same day. 

Even so, shoppers may not want to place an eleventh-hour order online and hope it arrives in time. That's where retailers such as Brooklyn-based Annie's Blue Ribbon General Store are hoping they can step in. Earlier this year, the store joined a new online marketplace, ShopIN.nyc, that promises same-day delivery on products from dozens of local businesses in the borough.  

"Normally, we do a lot of our own shipping, and that slows down as we get closer to the holiday," said Ann Cantrell, owner of Annie's Blue Ribbon General Store, in an interview with CNBC. "But I realized with [ShopIN.nyc], they're going to be delivering up until Christmas Eve. So we're going to be really busy from that portal, right to the very end."

Candles, wrapping paper, gift bags and ornaments have all been flying off the store's virtual shelves on ShopIN, Cantrell added.

ShopIN launched in June amid the pandemic, describing itself as Brooklyn's "Everything Store" and imploring consumers to "Shop Brooklyn, Not Bezos." ShopIN collects the merchandise from retail partners, sorts it into orders for customers, then delivers it to their doorsteps. 

Orders are delivered on the same day if they're placed before 10 a.m. The company charges a $5.95 delivery fee, or if shoppers spend more than $59, delivery is free.

Earlier this year, before her business joined ShopIN, Kathryn Ivanfy, founder of Brooklyn gift shop Wanderlustre, said she was hand-delivering some orders herself when her store had temporarily shut its doors due to the pandemic.

"I was happy to get any sale I could, so it was me in my little car driving around," Ivanfy said in an interview. "Now we're really happy to have ShopIN do it for us, because I can't sustain that."

Near-instant delivery no longer just for food

One-hour and same-day delivery are largely associated with food and grocery orders, but a growing share of retailers and tech companies are introducing the concepts to a wider array of products. The coronavirus pandemic pushed consumers to make retail purchases via local delivery that might have otherwise required them to make a trip to the store or rely on traditional shipping, according to a recent survey by e-commerce platform Shopify.

While the majority of consumers who shopped online during the pandemic used traditional shipping methods, roughly 28% received items through local delivery, the Shopify survey found. More than half of consumers who tried out novel fulfillment options such as local delivery said they did so more often in the past six months than ever before. Shopify surveyed more than 10,000 consumers in 11 U.S. and international markets in September.

On-demand delivery companies DoorDash, Postmates, Target's Shipt and Instacart have added large and small retailers to their platforms, enabling consumers to get an eyeshadow palette from Sephora delivered to their doorstep within a few hours, for example.

Shopify and payments firm Square have also announced integrations with on-demand delivery providers, allowing the many small- and medium-sized businesses that use their services to offer speedy delivery to shoppers.

"A lot of people are familiar with going to DoorDash or Uber Eats to order their food and having that delivered, usually within an hour," said David Rusenko, head of e-commerce at Square, in an interview. "These capabilities now exist for retailers as well."

Neighborhood retailers are well-positioned to take advantage of local delivery because their stores might be just a few blocks away from customers. By contrast, big-box retailers typically have storefronts in dense shopping districts, while major e-commerce players such as Amazon are shipping inventory from warehouses that are miles away.

"A lot of these local retailers could easily accomplish two-hour or even one-hour deliveries just because they're so much closer to the customer," Rusenko said.

Crowdsourced package delivery app Roadie is also helping smaller retailers offer local delivery. Since launching in 2015, the app now counts over 200,000 active drivers, and its service covers more than 89% of households in the U.S.

Marc Gorlin, founder of Roadie, said in an interview that the company has tried to differentiate itself from other on-demand delivery platforms by offering service to customers in rural areas.

"A lot of couriers only want to go three or five miles because of the unit economics of some of those businesses," Gorlin said. "We don't care. We regularly deliver to areas outside 70 miles, or oftentimes, the delivery is even further."

Doing so not only benefits shoppers, but it also helps small businesses "get outside their bubble and increase their footprint," Gorlin said.

While platforms such as ShopIN and Postmates continue to grow their retail offerings, there are still some kinks in the system that need to be worked out. Unlike larger retailers, local businesses may not have a robust online operation, so syncing up what's available online vs. what's in stock in store remains a challenge.

"It's so difficult because, especially in December, things are coming and going," said Audrey Woollen, founder of Los Angeles-based paper boutique Urbanic, which partnered with Postmates to offer local delivery. "It breaks our heart to have to select 'unavailable,' and we can't really communicate with the customer, since it's Postmates' customer."

Woollen said she's been working with Postmates to share feedback and improve the experience for retailers. She added that she's invested in making local delivery a permanent offering for her customers even beyond the pandemic.

"I think it's got great legs and that people will absolutely use it even after a vaccine," Woollen said. "Just like everything else, we're getting used to the new normal."