SAN FRANCISCO — Buoyed by the recent boom in omnichannel retailing, Instacart is redoubling its efforts to cement a central role in the marketplace, extending existing relationships with retail partners, establishing new ones, and expanding the scope of activities to include services that directly touch what goes on inside the store.
“Throughout the COVID-19 pandemic, Instacart, our retail partners and our shopper community have served as a lifeline to millions of households across North America,” says Chris Rogers, vice president of retail at the online platform. “We believe that brick-and-mortar retailers are the backbone of the future of grocery, as people want to shop from the grocers they know, love and trust.”
At the same time, he notes, “We saw grocery delivery move into the mainstream, with COVID-19 forever changing consumer shopping and buying behavior. COVID-19 accelerated a long-term trend of grocery shopping moving online that was already well under way, and new habits formed that are here to stay. At Instacart, we’re focused on continuing to serve as a chief ally to our retail partners as they continue this digital journey.”
In recent months, Instacart has succeeded in signing up new customers — Giant Co. is one example — and building on alliances with current customers, including Kroger Co., Publix Super Markets Inc. and Dollar Tree Inc. In total, the company works with more than 700 national, regional and local retailers in North America; its online grocery platform, the core of the business, reaches over 85% of households in the United States and 90% in Canada.
“We’re proud to serve as a retail enablement platform for our partners,” says Rogers, which, in addition to supermarket operators, include the likes of CVS Pharmacy and Walgreens, as well as such specialty chains as Sephora USA Inc., Best Buy Co. and Bed Bath & Beyond Inc. “We offer a truly unique approach to help partners compete and serve their customers with a suite of enterprise solutions, as brick-and-mortar retailers continue to build their e-commerce offerings. In addition to grocery delivery, we also power services like pickup, alcohol delivery and EBT SNAP payments.
“We partner deeply with retailers — acting as an extension of their business — with the goal of driving incremental growth. As we look ahead, we’re committed to supporting the entire grocery ecosystem by deepening our investment in new tools and solutions that further support retailers as they grow and compete in this space.”
Two recent deals — the purchase of FoodStorm, an order management system that facilitates catering operations for food retailers, and smart shopping cart and checkout technology provider Caper AI — illustrate the point.
“The acquisition of Caper AI marked an important milestone for us: It’s the first time Instacart is investing in innovative products and technologies that improve the in-store shopping experience,” Rogers explains. “This also came on the heels of our recent FoodStorm acquisition, which offers order-ahead and catering technology for retailers so they can capture more sales from customers who are turning to them for everyday meals. These acquisitions help expand our retail enablement platform, which currently spans the Instacart marketplace, e-commerce enterprise services, fulfillment technology to support delivery and pickup capabilities, last-mile delivery, and much more.
“As we look ahead, we’re focused on creating even more ways for retailers to develop unified commerce offerings that break down the silos between in-store and online as consumer shopping habits continue to change. We’ll continue to deepen our investment in our suite of enterprise technology services, unlocking new solutions that help power the comprehensive e-commerce platforms for grocers.”
For all its success, Instacart occasionally receives comments from consumers who complain about the relatively high price of the service. Rogers says the critics should take a closer look at that totality of the company’s offerings, and advises them to keep an eye out for more developments on that front.
“Giving people more access to food — and more time to enjoy it together — has always been core to our mission. We believe that grocery delivery shouldn’t be a luxury and, to get there, we need to make sure grocery delivery and online grocery services are affordable to everyone,” he notes. “Roughly 60% of offline grocery transactions in the U.S. include coupons, and across our own marketplace customers have already saved more than $400 million this year via coupons and other incentives. We want to do even more to make online grocery delivery more accessible to everyone.
“We’re starting to roll out a number of new features that will help people get more out of their Instacart experience and make grocery shopping more affordable. These include investing in reduced-cost and free delivery, introducing Instacart’s new Deals Tab, offering 5% credit back on Express pickup orders and introducing more savings through the Dollar Store Hub. As the demand for online grocery shopping increases, we know that people are going to want the most affordable and convenient experience they can find, and we’ve got a long way to go together to increase food access and affordability. These new features are just the beginning.”
The ongoing evolution of Instacart — a process that has accelerated since the appointment of Fidji Simo as Instacart chief executive officer last July — coupled with the incorporation of e-commerce in a growing number of shoppers’ purchasing behavior, makes Rogers bullish about Instacart’s future and the digital business of its retail partners.
“Grocery is the world’s largest retail category — and a $1.3 trillion industry in North America — but it’s still in the early stages of its digital transformation,” he says. “With grocery as our foundation and focus, we are committed to adding unmatched, long-term value to our retail partners. Every aspect of the Instacart marketplace has been built by design to protect retailers and help them gain share in the online market.
“We help bring grocers online overnight, offering their customers a delivery and pickup solution without any operating expense investment from the retailer. With Instacart, customers are purchasing their usual fresh items from the perimeter of the store, but also buying more overall — including center aisle staples. We work with retail partners to bring all the aisles of their store online, offering items like alcohol, household goods and prescription delivery, in addition to fresh items for delivery or pickup, as well as power EBT SNAP payments to help increase access to food for communities who need it the most.”