Online grocery pioneer Instacart is ready for Act 2. Through the new Instacart Platform, announced March 23, the San Francisco-based online grocery pioneer is giving retailers—including Publix, Schnuck Markets and Key Food—access to the technologies behind its consumer marketplace to power their own digital properties and retail operations.
Platform seeks to extend what Instacart already offers in terms of digital storefronts and fulfillment solutions: Now, for example, Instacart's merchandising, product discovery and loyalty-as-a-service offerings will be available for retailers to use on their own websites, regardless of whether they use Instacart's storefront technology, noted Instacart CEO Fidji Simo.
In the fulfillment realm, Instacart Platform will offer solutions for delivery in as little as 15 minutes via Carrot Warehouses—nano-fulfillment centers (NFCs) managed by Instacart but with retailer-owned inventory and supply chains.
Additional Instacart Platform offerings, available a la carte to retailers, include digital tools and connected hardware meant to enhance consumers' brick-and-mortar shopping experience—scanless smart carts, for example, with tools to help shoppers find the items they've added to their online grocery list in-store.
“The grocery industry is undergoing a digital transformation where customers expect a seamless experience across many channels, but behind the scenes, it’s taking an incredible amount of work and investment for retailers to deliver these new services,” said Simo, who took the helm at Instacart last summer, in a news release. “We’re looking to change that with Instacart Platform."
In an exclusive interview with Winsight Grocery Business, Simo added that Platform represents an "evolution of the company strategy." Act 1, she said, "was kind of bringing grocery online, and we certainly did that successfully, but through the process we built a lot of consumer understanding and consumer capabilities that our retailers started asking us for for their own properties."
The company's work to significantly broaden its capabilities with respect to both online and in-store shopping, actualized in Platform, Simo said, will "help retailers innovate faster than ever on their own properties.”
Three capabilities will be key to the Instacart Platform:
- Carrot Ads, which Instacart said opens up new digital revenue streams for retailers by bringing the best of Instacart advertising—technology, products, engineering and sales talent, and data insights—to retailers’ owned and operated e-commerce sites. It also includes revenue share models for an additional source of profit. Carrot Ads is currently being piloted with retailers such as Schnucks, Good Food Holdings and Plum Market, with plans to roll it out more broadly later this year. "Across our five iconic food retailing brands, we’re operating in a dynamic industry where we need to meet consumer expectations, both online and offline," said Neil Stern, CEO of Good Food Holdings, the holding company for Bristol Farms, Lazy Acres Natural Market, Metropolitan Market, New Seasons Market and New Leaf Community Markets. "Our focus is to leverage the industry's best technology and partnerships to future-proof our omnichannel retail business."
- Carrot Warehouses, which helps retailers create more flexible, local fulfillment models to unlock capabilities such as 15-minute ultrafast delivery. As a full-stack solution, Instacart will work with retailers to enable end-to-end fast delivery solutions customized to their needs, including building new nano-fulfillment centers, devising floor plans, establishing automation services and running ongoing operations. In the coming months, according to Instacart, Carrot Warehouses will power 15-minute ultrafast delivery for Publix customers in Atlanta and Miami. “Instacart Platform continues to fuel our omnichannel strategy, powering delivery and curbside pickup across our markets. Our partnership also enables Publix to serve customers in new ways, solving for additional customer use cases by enabling meals delivery and virtual convenience,” said Maria Brous, director of communications for Lakeland, Fla.-based Publix. “Our new NFCs, built with Instacart Platform, unlock ultrafast delivery in our major metro areas, allowing customers to get what they need in as fast as 15 minutes. We are eager to continue to test and iterate on these new concepts as consumer needs continue to evolve.”
- Carrot Insights, which gives retailers near real-time visibility into their operations to help them make informed business decisions. Its dashboards track key performance and operational metrics, such as order volumes and out-of-stocks across Instacart Platform and retailers’ own Instacart App storefronts. Key Food Stores Co-Op Inc., a cooperative of independently owned supermarkets in Connecticut, Massachusetts, New Jersey, New York, Pennsylvania and Florida, is one of the early retailer adopters of Carrot Insights. “As a co-operative with a variety of banners making up the Key Food family of supermarkets, it’s incredibly important for us to not only understand how each of our banners are operating, but also how our e-commerce business is performing as a whole,” said George Knobloch, chief operating officer of New York-based Key Food. “We’re excited about the new Carrot Insights and look forward to continuing to utilize it to help us access actionable insights as we continue to grow our e-commerce efforts and make our stores more accessible and convenient for customers.”
Other retailers currently using Instacart Platform include Aldi and Food Bazaar, Instacart said in a release.
Evolving Beyond the Weekly Shop
Since its inception in 2012, Instacart has been “focused on creating a differentiated consumer experience,” Simo said in a blog post. It began with the Instacart App, bringing grocery shopping online, with the focus on the weekly shop.
“We helped people look for their favorite products, built an innovative ad business that inspired people to try new brands, connected people to our dedicated shopper community, and did it all at scale without losing our focus on what mattered most: helping retailers and customers build deeper relationships,” she said.
As consumer expectations evolved, so did Instacart, helping retailers build their own websites and apps, powered by Instacart technology, and, in some cases, Simo said, “we also helped our partners do things that weren’t possible in the physical world—like build virtual convenience stores to deliver nationwide in 30 minutes,” referencing Publix Quick Picks, which launched in September 2021 and allows customers to shop from Publix’s assortment of fresh groceries, pantry and household essentials, meals and snacks for delivery in as fast as 30 minutes with Instacart Priority Delivery.
“Along the way, consumer expectations changed. People wanted new ways to connect with every retailer and get personalized recommendations, multiple delivery options, and a seamless experience online and in-store,” Simo said. “So we moved from a focus exclusively on the weekly shop to serving more use cases like monthly bulk stock-up, convenience and alcohol. We took on catering with our acquisition of FoodStorm. We enabled every delivery window, from 30-minutes to two-hour to next-day. We made grocery delivery more accessible by accepting EBT SNAP payments. Every time, we brought these innovations not just to our own Instacart App, but to the websites and properties of our grocers as well.”
Just last week, Instacart launched Shoppable Recipes on TikTok, Tasty and Hearst Magazines’ properties such as Delish and Good Housekeeping, allowing consumers to discover new recipes and add the ingredients to their carts at the same time.
“We don’t think the future of grocery is about choosing between online and offline," Simo said. "It’s about helping customers find food they love from retailers they trust, no matter where they are or how they choose to shop."