Why Grocery and CPG Brands Can't Ignore Instacart
Most grocery and CPG brands have had e-commerce and their online offering in mind for years. However, 2020 has accelerated demand as consumers have been pushed to buy groceries online amid the pandemic. In fact, since the onset of coronavirus, online grocery sales have grown 40% compared to last year. This shift has forced some brands to quickly embrace new marketplaces and unfamiliar territory. Instacart, in particular, has been hugely popular among brands and shoppers alike. In this blog post, we share why Instacart could be crucial to the future of grocery and CPG brands. Continue reading for strategic insight and more.
Online Grocery is Becoming the New Normal
As mentioned, because of COVID-19, many consumers are opting to order ahead and pick up their groceries or have them delivered. Curbside pick-up, Amazon Fresh, Walmart Grocery, and Instacart have all gained impressive traction. In fact, each has earned a spot on Good Housekeeping’s list of 10 Best Grocery Delivery Services. Instacart, the subject of this post, came in at an impressive second place. Further, reports claim Instacart accounts for more than half of the online grocery market.
Instacart is the Whole Package
While Instacart has become a household name to shoppers, from a brand’s perspective, the marketplace app can’t be ignored. Not only is it where the customers are, but it has long-term potential and other advantages over competing options.
For example, Amazon Fresh has limitations when it comes to its fulfillment center network. Due to their limited footprint of Fresh distribution centers, it's only available to consumers in select cities in the US. On the other hand, Walmart has enough fulfillment centers (their stores), but its product selection is limited. Those using Walmart Grocery only have access to products sold in Walmart stores.
In comparison, Instacart has neither of these roadblocks. The app taps into hundreds of retailers and tens of thousands of local grocery stores across all 50 states.
Each store serves as a fulfillment center, and subsequently, offers a nearly unlimited product selection. With this, Instacart can reach most of the US, and meet consumers' needs each shopping trip.
The Race to Consumers’ Carts
Although the consensus of Instacart is overwhelmingly positive, as with any marketplace, it has its nuances. It’s important to understand how it operates and what to consider before forming a strategy. Most notably, Instacart helps its shoppers build a virtual shopping cart and the app keeps it on record for their next visit. When returning shoppers open the app, they’re given the option to automatically fill their cart based on past orders. This helps create efficiency for its users, but this affects brands as well.
The sooner a brand earns a ‘spot’ in shopping carts, the longer they can keep them as a customer and earn sales over competing products. On the contrary, brands that aren’t getting into consumer carts, are missing out on this window of opportunity. And, the longer they wait to lean into Instacart, it will become harder to make it into the carts of established shoppers.
For now, as the platform is in the early stages, the best way to do this is through advertising. In the future, as it becomes more robust, we expect new features and opportunities for brands to control their presence within the app.
As alluded to, early adopters of Instacart have the potential to find great success. Instacart, and the way it caters to shoppers, is something we expect to see more of in the future. We always believe in a customer-first mindset, but Instacart takes this to another level. And, in response, brands have no choice but to follow suit.
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