Grocery delivery services, like Instacart, provide benefits for consumers, retailers, and brands.
Online grocery shopping has grown steadily, owing to its convenience and accessibility. The COVID-19 pandemic and its lockdowns further accelerated this trend. This year, online grocery sales are expected to increase by about 20% to more than $147 billion and are projected to rise to $243 billion by 2025.1 Online grocery sales are a growth opportunity for retailers: online growth is surpassing in-store growth, largely propelled by convenience and the ongoing pandemic.1
This revolution is being driven by both established brick-and-mortar and eCommerce retailers—Walmart, Amazon, and Kroger—as well as by newer delivery-focused companies.1 Among the crop of third-party on-demand delivery companies, Instacart stands out.
Since its founding in 2012, Instacart has helped revolutionize how people purchase groceries.2 Today, it works with more than 750 grocery retailers across 70,000 individual locations.2 With estimated sales of more than $30 billion in 2022, Instacart alone accounts for more than two-thirds of the total sales by third-party grocery delivery companies in the United States.3 For retailers, Instacart offers a convenient method for offering delivery options without requiring them to make large investments.4
BENEFITS FOR CONSUMERS
Like other third-party delivery providers, the company acts as an intermediary between consumers and retailers. That said, the shopping process is simple.
First, consumers use the Instacart mobile app to shop their preferred local grocers and select the items they need. Instacart shoppers then go to the store and pick the products the consumer chose. Finally, the order is either delivered to the consumer’s home or set aside for pickup at the store.5
Convenience and time saving are the primary benefits Instacart offers consumers. Instead of having to spend time at a store shopping for groceries, consumers can complete their shopping in minutes from the comfort of their home. Deliveries can be scheduled same-day or up to 14 days in advance—the window can even be as short as one hour!
BENEFITS FOR BRANDS
Expanding the available advertising products has recently been a focus for the company. In January 2022 Instacart announced new advertising products—from display ads to brand pages—to provide brands with more marketing capabilities to drive awareness, consideration, and purchase.6, 7 For brands, Instacart’s status as the largest North American grocery delivery service, its widespread adoption by consumers, and its command of the segment makes it attractive for CPG brands looking to better connect with their consumers.3
To help improve discoverability and product rankings organically, brands can leverage their product content and consider keywords and other search optimization (SEO) strategies. Well-optimized product pages are likely to appear in the first row, which, according to Instacart, delivers a conversion rate of 70%.8
START WINNING ON INSTACART
Instacart is more than just one of the biggest grocery delivery services, it’s an increasingly essential tool to help brands find success in the grocery delivery space. At Compass Marketing, we can help your brand win on Instacart. With our data-informed approach, we help develop strategies to get brands’ products into consumers’ baskets.
SOURCES
1 https://www.insiderintelligence.com/insights/digital-grocery-industry/
2 https://www.instacart.com/company/about-us
3 https://forecasts-na1.emarketer.com/612346c3b215ff01d483a0a4/6123469bea9f200b2c6ca7fa
4 https://nielseniq.com/global/en/insights/commentary/2021/instacart-the-good-the-bad-and-the-ugly-for-grocery-retailers/
5 https://www.instacart.com/help/section/how-instacart-works
6 https://www.instacart.com/company/updates/inspiring-consumers-with-display/
7 https://www.instacart.com/company/pressreleases/instacart-announces-display/
8 https://www.digitalcommerce360.com/2018/08/07/for-cpg-manufacturers-the-click-is-more-important-than-the-collect/
