Instacart released new research that finds that the online grocery platform created approximately 186,000 additional jobs in the U.S. grocery industry and increased total grocery revenue by $6.4 billion from 2013 through the second quarter of 2020. That includes approximately 116,000 jobs in the U.S. grocery industry—representing 70% of net grocery job creation—and $2.9 billion in additional grocery revenue before the pandemic began (between 2013 and 2019).
WGB recently sat down for a virtual chat with Instacart’s new president, Carolyn Everson—her first interview since stepping into the role three weeks ago—to discuss this new comprehensive analysis by Dr. Robert Kulick of NERA Economic Consulting, as well as Instacart’s new partnership with Kroger, what excites her most about her new role, and what it’s been like to be reunited with fellow former Facebook exec Fidji Simo, CEO of Instacart.
The following has been lightly edited for length and clarity.
Jennifer Strailey: What do you feel is the most telling data, in terms of both Instacart’s job creation and revenue contribution, to come out of this new study by NERA? What does the study reveal about Instacart’s impact on the grocery industry prior to the pandemic and since COVID?
Carolyn Everson:First and foremost, to actually see some data behind what we intuitively believed, which is that we are creating additional jobs—the 186,000 additional jobs between 2013 and the second quarter of 2020, and also really importantly, that we’re driving incremental growth. Even the $6.4 billion in revenue is conservative by all estimates, but as a company we’d rather be conservative. We want peer review of the study to make sure it really has the legs and teeth that we know it should.
I think there are a lot of people who wonder, was it just a COVID effect because people couldn’t go into the grocery stores themselves for safety reasons—was that the only reason [for the success of] Instacart or any of the other digital change that’s happened? What we saw, which was very encouraging, and has frankly been confirmed by the meetings that I’ve had with retailers, is that what we’re trying to do is give our partners a distinct edge in the acceleration of e-commerce adoption.
The way I describe it, and this is very macro, but once consumers get on the digital train, whatever train that might be, [they don’t want to get off]. We’ve trained consumers that they can deposit their checks into their mobile bank. We’ve trained them that they can get a car in three minutes on their phone. We’ve trained them that all of these possibilities are enabling them to spend more time on the things they love.
When you look at the online grocery industry, it’s still really nascent. And while COVID was an accelerator of growth, it was already on the trajectory prior to COVID, and coming out of COVID we firmly believe that that digital train for online grocery is going to do nothing but continue. I haven’t seen in my 30 years, an example of when a consumer got on the digital train for whatever service or vertical and decide, ‘you know what that’s not good, I’m going to jump off and walk back to the station and do things the way I used to.’
I think the consumer’s appetite is endless for what is possible, and it was great to see [from this study] that we were already on that trajectory pre-COVID. COVID was obviously an important accelerant, but we see that trajectory continuing from here.
Instacart recently announced an exclusive partnership with Kroger to offer the convenience option Kroger Delivery Now. What is the significance of this new offering? How important is immediacy in the grocery and c-store delivery space, and do you see continued and growing demand for speed?
At the most macro level, grocery is the world’s largest retail category, and it’s still in the early stages of digital transformation. Only about 8% of the market is penetrated today. It’s not the whole country demanding all these different services in 30 minutes, 15 minutes or less, but what we are seeing is incredible innovation across a number of retailers, and our job at Instacart is to be the retailer-enablement platform. How do we help our partners succeed in the digital transformation and serve a number of different use cases?
Our Kroger Delivery Now is really connected to our broader convenience offering because what we’re seeing from consumers is that they don’t want to make a trade off on selection, quality, price or speed. Convenience is representing one of the largest and fastest [growing] online categories in the U.S., and we’ve seen incredible demand for convenience items as well as faster delivery options.
The orders on convenience are up 150% since May of this year. Demand for rapid delivery continues to grow, with nearly 20% of our customers selecting priority delivery at checkout today. It’s sort of like if you build it, the appetite is there.
There’s a lot that has to be worked out in terms of logistics and where is this possible, but it speaks to the broader opportunity of what we’re trying to do to give our customers not only access to more and different uses in the broader food category, but also more access to different selection—from office supplies from Staples to household decor and essentials from Bed Bath & Beyond, Big Lots and Walmart. We have electronics with Best Buy. We have health and beauty with Sephora and Vitamin Shoppe. We have sporting goods with Dick’s Sporting Goods. We have toys and gifts from Disney. We have pet supplies from Petco. The list goes on and on. What we’re seeing is an insatiable appetite from consumers to provide many different use cases. Convenience is one slice of many different use cases for consumers within food.
You became president of Instacart on Sept. 7. In these first couple of weeks at Instacart, what are you most excited about as you dig into your new role and what do you plan to focus on first?
It’s an honor and a privilege to be here after leaving Facebook—and I was there for 10-and-a-half years. I saw the ability to have an impact on over 3 billion people globally. It was a big decision. I thought, what do I do next and what is going to offer me the opportunity to really change the trajectory of an industry and also be purposeful?
I think there’s a lot of opportunity for Instacart to leave an impact on society. Of course, we will enable retailers on this digital transformation, but we also have our eyes set on how we can work on food insecurity, how we can think about food waste. We’re really embedding our purpose and what we do for society in the DNA of the company and that was very attractive to me.
What excites me the most is I love sitting across the table or the virtual table and figuring out how to help a partner grow their business. For me the first three weeks have been very focused on our retail partners. We do have a four-sided marketplace. We have retailers, we have consumers we have shoppers, and we have CPG companies that want their brands discovered and want to move their product off the shelf. I think my role as president, alongside our CEO Fidji, is making sure we understand the four sides of that marketplace and that they’re all working coherently so that everyone has a net benefit coming out of it.
We’re building our entire business around growing someone else’s business. We have urgency around ensuring that we do everything we can to deliver the capabilities that the local grocers and retailers need to not just survive but to thrive.
One of the reasons I joined Instacart was because I deeply believe in our ability to enable retailers to really transform themselves in the digital sphere. I’ve had a lot of years of experience watching other verticals move from the denial phase—like digital is not going to impact my business—all the way to seeing them do things they never thought were possible and really changing the trajectory of their business growth as a result of utilizing digital.
My responsibilities as president of Instacart means stepping into a number of different functions, one of which is retailer relationships and all our business development. It’s where I’ve been over-indexing my time in just the first three weeks—meeting with retailers and our teams to understand what we are building, how we are enabling growth of their business and ensuring we are obsessively focused on enabling the growth of their business, because that’s absolutely critical to what the consumer needs.
The consumer wants to have choice. Consumer expectations are constantly changing and are very high. So, I’ve been digging in deep on the retailer side, and then I oversee a number of the other functions—the ad business, the policy teams, our people teams, our pickup business, our legal team, etc. It’s been a thrill and it’s only week three, but I’m soaking it all in.
What has it been like to be reunited with another former Facebook alum Fidji Simo, CEO of Instacart? When the company announced you as president, Fidji said, “Carolyn’s unmatched experience and authenticity will be a key driving force for our business as our teams prepare for our next chapter of growth.” What does the “next chapter” look like for Instacart specifically, and the online grocery channel in general, in the coming months and years?
I’m delighted to be reunited with Fidji. Her capacity to absorb information and be really clear on our strategy is truly exceptional. She was attracted to this category as much as I was. As I mentioned, 8% of grocery is online today and we expect that to grow to about 30% in the next five to 10 years. We think we’re incredibly well positioned to increase adoption and deliver consumers exceptional experiences that they want and expect from their retailers. But it’s so early. I think that’s one of the things Fidji and I both discovered in coming to Instacart. If you were to use a food analogy, you would say [digital grocery] is not even the first course.
We are at the earliest stages of solving for consumer need, and then you think about the transformation that retailers are going to have to go through over the course of the next five to 10 years—it’s really going to be a very exciting ride. If you can grow your partners' business and have it be incremental growth and exceed consumer expectations, then that’s a win for everybody.