Last year, @Instacart "secretly" started building a new business to accelerate growth, as it prepares for its likely IPO in 2020:
It wants to also become the “@Shopify for Groceries”.
techcrunch.com/2018/01/16/ins…
Thread (1/)
It wants to also become the “@Shopify for Groceries”.
techcrunch.com/2018/01/16/ins…
Thread (1/)
(2/) Instacart’s key model is a marketplace that helps grocery retailers grow their online channel with fast delivery and a consumer-friendly app; In January'18 Instacart acquired Unata, (a white-label grocery platform for retailers), to make a bet on a SaaS offering.
(3/) The goal is to not only grow it’s customer-facing platform but also to empower retailers to create their own online grocery experiences, controlling of the customer experience and data.
(4/) If, as a grocery retailer*, you want to compete online your options are:
*excluding Amazon, Walmart and Target, that are building their own in-house solutions
*excluding Amazon, Walmart and Target, that are building their own in-house solutions
(5/) a) Join Instacart Marketplace
Pros:
- Fast online grocery channel with quick deliveries while
maybe increasing GMV
Cons:
-Instacart owns the CX, accessing new monetization levers
- Brand dilution in the marketplace
- Disconnected offline and online experiences.
Pros:
- Fast online grocery channel with quick deliveries while
maybe increasing GMV
Cons:
-Instacart owns the CX, accessing new monetization levers
- Brand dilution in the marketplace
- Disconnected offline and online experiences.
(6/) b) Partner with Unata
Pros:
- Control the CX and fully monetize it.
- Cost-efficient.
- Connect offline and online experiences.
Cons:
- High switching costs and low leverage to negotiate
- You are sharing your store data with Unata (or with Instacart)
Pros:
- Control the CX and fully monetize it.
- Cost-efficient.
- Connect offline and online experiences.
Cons:
- High switching costs and low leverage to negotiate
- You are sharing your store data with Unata (or with Instacart)
(7/) c) Build your in-house solution
Pros:
You can fully control the omnichannel experience and have total control of your customers’ and operations’ data.
Cons:
Freaking expensive (Knowing that groceries is a low margin business doesn't help either).
Pros:
You can fully control the omnichannel experience and have total control of your customers’ and operations’ data.
Cons:
Freaking expensive (Knowing that groceries is a low margin business doesn't help either).
(8/) Considering that the Foods and Consumables market is ~$900B+ in US and (with only 3% online penetration), I think that what Instacart is doing is extremely smart, because it consolidates a quite dominant position relative to grocery retailers who are being commoditized.
(9/) So what?
Instacart is going very aggressive on Monetization and SaaS platform. Given all the data that Instacart is collecting, a potential next step is also to sell their own products using a dark store model.
I also expect more competition emerging on SaaS for Retailers.
Instacart is going very aggressive on Monetization and SaaS platform. Given all the data that Instacart is collecting, a potential next step is also to sell their own products using a dark store model.
I also expect more competition emerging on SaaS for Retailers.
