Instacart - grossary delivery app VPmarketing

Instacart - grossary delivery app 

Founded in 2012, Instacart is an American technology company valued at nearly $8 billion that operates as a same-day grocery delivery and pick-up service in the U.S. and Canada.

Customers shop for groceries through the Instacart mobile app or Instacart.com from the company's more than 300 national, regional and local retailer partners.The order is shopped and delivered by an Instacart personal shopper. Up until the end of 2017, Instacart only had operations and services in the United States.

In November 2017, the company announced plans to also begin delivery in Canada.

Today, Instacart is accessible to more than 80% of U.S. households, and in all 50 states, and 70% of Canadian households.

 Instacart partners include Albertsons, ALDI, Costco, CVS, Kroger, Loblaw, Publix, Sam's Club, Sprouts and Wegmans, among others.

The company serves more than 20,000 different grocery stores across more than 5,500 cities in North America

Service

Instacart's customers can access the service via the Instacart mobile app or website and begin shopping by selecting their city and store, then adding groceries to their digital cart.

Customers can pay with personal debit or credit cards, Android Pay and Apple Pay.

As the business has developed, Instacart has established partnerships with over 300 national, regional and local retailers.

Instacart personal shoppers pick, pack and deliver the order within the customer's designated time frame—within one hour or up to five days in advance.

For orders of $35 or more, the delivery fee is $3.99. With an Instacart Express membership for $9.99/month or an annual fee of $99, customers get unlimited, free delivery on orders over $35. Retail partners set the price of individual items on the Instacart marketplace.

Today more than half of Instacart partners offer customers same as in-store pricing on the platform.

On April 11, 2019, the company expanded its services to offering an on-demand option for its workers, in order to allow workers to work more flexible schedules.

Today, Instacart is available in more than 5,500 cities across the U.S., including all 50 states, and Canada.

Apoorva Mehta

Instacart was founded in 2012 by Apoorva Mehta, a former Amazon employee.

Apoorva was born in India and moved with his family to Canada in 2000.

He studied engineering at the University of Waterloo.

 He was a participant in Y Combinator's Summer 2012 batch which eventually led to the creation of Instacart.

Apoorva previously worked at Blackberry, Qualcomm, and then Amazon as a supply chain engineer, where he developed fulfillment systems to move packages from Amazon’s warehouses to customers’ homes.

Before founding Instacart, Apoorva started more than 20 companies.

He tried building an ad network for social gaming companies, and developing a social network specifically for lawyers, among other start-ups.

North American Expansion

Instacart was originally launched in San Francisco and since then has expanded throughout the U.S. and Canada.

In September 2016, the company announced an expansion to their North Chicago Zone,and in October 2016 also announced the expansion of their Orange County and Minneapolis coverage areas.

As of March 2017, Instacart serviced 36 markets, composed of 1,200 cities in 25 states: Arizona, California, Colorado, Connecticut, District of Columbia, Florida, Georgia, Illinois, Indiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Hampshire, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Tennessee, Texas, Virginia, and Washington.

Partnerships

In November 2017, Instacart announced a partnership with Loblaw Companies to begin delivery from select Loblaws, Real Canadian Superstore, and T&T Supermarket locations in Toronto and Vancouver.

By the end of 2018, Instacart will deliver from these banners in 16 Canadian markets.

They also offer delivery for products at Walmart Canada stores, Staples Canada and M&M Food Market.

In January 2018, the company acquired Toronto-based Unata, a white-label platform for grocers.

In 2018, Instacart announced national expansions with Kroger, ALDI, Sam's Club, Publix, Costco, Sprouts, Stater Bros, BJ's Wholesale Club, and more.

The company announced new partnerships in 2018 with Walmart Canada, HyVee, The Fresh Market, Harps, Lunds & Byerlys, and more.

In November 2018, Instacart announced the national expansion of Instacart Pickup, a new grocery click-and-collect service.

In December 2018, Whole Foods, which had been bought by Amazon in 2017, and Instacart announced they would be winding down their relationship.

In March 2019, Instacart announced an expanded alcohol delivery experience for customers across the U.S., making Instacart one of the largest online delivery and pickup marketplaces for alcohol in the U.S.

In May 2019, Whole Foods Market ended its partnership with Instacart.

As of December 2019, Instacart's alcohol delivery service includes over 30 new partners in more than 20 states and Washington, D.C. The partners include Aldi, Sam's Club, BJ's Wholesale Club, Sprouts Farmers Market, and The Fresh Market.

FUNDING

The company had a $2-billion valuation by investors as of May 2015.

Forbes named Instacart "the Most Promising Company in America in 2015

In March 2017, it was reported that Instacart raised $400 million in new venture capital which valued the grocery delivery service at approximately $3.4 billion.

In February 2018, the company raised $200 million in a funding round led by Coatue Management, as well as Glade Brook Capital Partners and existing investors.

In October 2018, Instacart raised $600 million in a funding round led by hedge fund D1 Capital Partners; the round valued the company at $7.6 billion.

Instacart raised an additional $271 million in November from investors including Tiger Global Management, bringing its latest round of fund raising to $871 million and valuation to $7.87B.  Instacart has raised six rounds of funding, and has been invested in by Andreessen Horowitz, Sequoia, Kleiner Perkins Caufield & Byers, Comcast Ventures, Thrive Capital, Coatue Management, D1 Capital Partners, Tiger Global and Valiant Capital, among others.

HOW  INSTACART WORKS

Instacart co-founder and CEO Apoorva Mehta believe Instacart’s competitive advantage is two- fold. First, customers are not limited to a single vendor and can combine items from multiple stores on one order, so product selection is truly customized.

(Instacart uses special software that can track inventory across multiple supermarkets.)

And since personal shoppers are on call around the clock, customers have to neither order many hours in advance of delivery nor wait for a delivery window.

In fact, customers can have their grocery list filled and delivered in less than an hour.

The Instacart value chain model is technology driven, which boosts the delivery groceries to customers in less an hour, making it one of the most promising and innovative companies in the U.S, which is based on sharing economy model

 By depending on existing stores, Instacart instantly has access to a large selection of stock keeping units.

Instacart’s app provides a detailed map of each local establishment including store aisle contents.

The customer’s grocery list, compiled using extensive drop-down menus either on the website or in the app, is organized by merchant and aisle to provide maximum order fulfillment efficiency. Inventory is tracked for all of Instacart-affiliated merchants.

As a personal shopper skims an aisle, bedecked in a bright green T-shirt flaunting the Insta- cart logo, items can be selected for different orders placed at different times.

The software can also plan delivery routes and predict future customer orders.

iPhone users can connect to the Instacart app from Yummly, the largest recipe search engine in the world, and have the ingredients delivered in time for dinner. 

The Instacart app is integrated with Google Now cards so that Android users can place orders for either delivery or pickup using a token generated within the app.

Instacart’s core competencies thus dictate its tar- get market: the price-insensitive, convenience shop- per.

At first, item prices were marked up (20 percent in one sampling) and a $3.99 delivery fee charged.

An Amazon Prime–like service called Instacart Express requires a certain volume of business and a $99 yearly fee in exchange for free delivery. 

Instacart is instead catering to shoppers who are willing to pay a pre- mium to have both quality and selection.

By mid-2015 Instacart had 200 employees and 4,000 personal shoppers in New York, Los Angeles, San Francisco, San Jose, Washington, DC, Chicago, Boston, Austin, Seattle, Philadelphia, Atlanta, Boul- der, Denver, Houston, and Portland, Oregon.

While many analysts predict that matching the bargain basement prices of Amazon and Walmart is unavoidable, Instacart is instead modifying its business model.

Many of Instacart’s grocery store partners now set their own prices, paying Instacart a cut of each order.

This has freed Instacart of the burden of mark- ups, protected it from the vagaries of variable food prices, and provided a more stable profit structure.

Retailers have been willing to pay Instacart in the hope of gaining more business because Instacart enables a single store to serve people across a larger geographic area.

Affiliated retailers are reporting gains, although the numbers are small.

With national chains achieving just 1 to 2 percent margins on grocery delivery, the Instacart model of layering labor on top of the existing grocery infrastructure is still unproven.

According to a Wall Street Journal analysis, an order of 15 common items such as frozen peas, milk, cereal, and fresh fruit costing about $68 from a San Francisco Safeway store would produce a profit of only $1.50 for Instacart.

If the order were smaller by one 28- ounce jar of peanut butter, Instacart would break even, and a smaller order could push it into the red. 

Entry of the Instacart’s app into the market has had a massive impact on the grocery stores.

Besides the structural strengths, the company enjoys pricing advantages over competitors like Amazon and Safeway

The company is the new market entrant so does need to worry about entrants and thus it is up to existing stores to deal with it.

The company suppliers form part of the Instacart’s competitors since they own separate grocery and retail stores.

Furthermore, since Instacart acts a partner for grocery stores, there are no competitive pressures when expanding.

QUESTIONS:

1) What is the indias market potential for Instacart
2) Explain sustainability or viability of the Instacart  model
3) What are the benefits to india in terms of employment, revenue and taxes
4) How Instacart can expand globally
5) CRM in Instacart model
6) Innovative strategies in  Instacart model
7) What is sharing economy principle and how it is beneficial for india
8) Future and scope of Instacart
9) SWOT Analysis and Michel porters 5 forces analysis for Instacart model
10) Competitors analysis for Instacart
11) Scope for the Instacart for Forward and Backword Integration