In this blog post, we’ll break down how Instacart works, explore its business model and dive into what it’s like to be an Instacart shopper.
In this urban jungle when you’re pressed for time, stepping out for grocery shopping further adds to the hectic schedule. It’s not only time-consuming but sometimes it’s also not convenient. Remember the good old days when you could step freely outside your home and shop all day long? Well, the times have changed, and the pandemic is the one to blame.
In the age of the Internet, the need to step out to buy groceries is obsolete. From whole grains to vegetables and fruits, today, everything is available and accessible on your smartphone. Remember the nearby store which sells the most nutritious and pristine fruits? Guess what? You can buy those fruits from the same store from your mobile app.
All thanks to online grocery apps like Instacart which have made this revolution possible.
Instacart is one of the largest, widely used grocery delivery services. It lets you shop from groceries online. The contactless delivery features further add to the safety and convenience it provides.
So, let’s demystify how Instacart works! This blog will take you through a step-by-step guide of Instacart’s interface, Instacart business model, and also unleash some of its breathtaking features to help you get the best shopping experience.
What is Instacart and How Does Instacart Work?
Instacart is an on-demand grocery delivery platform making hygienic groceries delivered right to your doorstep. The company was founded back in 2012 by 3 ambitious entrepreneurs; Apoorva Mehta, Max Mullen, and Brandon Leonardo. Today, Instacart operates in more than 5,500 cities across the US and in some parts of Canada.
With Instacart, customers can browse products from 40,000 plus local grocers and chain stores and get them delivered to their doorstep within 2 hours. Once you book an order on Instacart, a “personal shopper” or the esteemed contractor will buy all your groceries from the respective stores and deliver them to you. Also, you can track and contact your shopper anytime if the need arises.
That was a brief summary of how Instacart operates. Let’s dive into our step-by-step guide to know more about Instacart’s business model.
Steps for placing order on Instacart
Step 1: Download the Instacart App or hop onto their Website
Instacart mobile app for customers is available to Android and iOS users. Also, you can even use their website for shopping.
Step 2: Sign Up or Log In
If you’re new to Instacart, sign up to create an account on it. You can sign up through Facebook, Google Account, Apple ID, or simply through email address. After signing in, enter your ZIP code to view the available grocery stores in your locality.
Step 3: Choose Your Desirable Grocery Store and Select Your Products
After accessing the list of all available grocery stores in your locality, you can browse your favorite products and simply add them to your cart.
Once you have finished shopping, pay for your order through debit/credit cards or by various online payment methods. You’ll receive a notification when the shopper accepts your order. Moreover, you can maintain seamless contact with your shopper anytime with the Instacart app.
Step 4: Receive Your Order
To ensure contactless deliveries, you can ask your shopper to drop your package at the lobby or your doorstep. Also, since most Instacart shoppers are independent contractors their wages depend upon the number of orders they deliver. Thus, it’s crucial to give a tip to your shopper. You can adjust the percentage of your tip before paying for the order.
The deliveries are usually completed within 5 hours of placing the order. But, sometimes it might get delayed due to issues like changes in the working hours of the grocery shop or product unavailability.
For further inquiries related to delivery, order or payment reach out to the customer care on the Instacart app or website.
Which Stores Does Instacart Work With?
Instacart operates across all the grocery shops in your vicinity. From gourmet and grocery shops to even local wine shops, Instacart collaborates with all these shops.
It also has collaborations with some well-known retailers in the US like Aldi, Wegmans, Kroger, Safeway, Foodline, and Harris Teeter. Moreover, Instacart also delivers from membership-only stores like Costco, BJ’s Wholesale, and Sam’s Club. Enter the ZIP code in your phone and you can see a range of stores that deliver products in your area.
3 Breathtaking Features of Instacart
1. Get your First Delivery Free on Instacart
“The first impression is the last impression” has applications even in the business world. Instacart offers free delivery on the first order to every customer to create the best first impression of their business.
If you’re willing to experience their service or simply want to try out a new grocery delivery platform, this feature could help you save some crucial money.
2. Instacart Express Membership
Instacart Express Membership allows customers to enjoy free delivery and exemption from additional service fees throughout the year for $99. However, to enjoy the benefits of this membership, your order must be more than 35$.
Other benefits of Instacart Express Membership include exemption from busy pricing, an additional charge levied when Instacart shoppers are handling more than usual orders. Moreover, express Membership even allows you to get your deliverables within an hour!
The app works fine even without the membership but the delivery and service fee of Instacart is quite high.
3. Fast and Flexible Delivery
Today, as more and more people are switching to online grocery shopping, there’s tremendous pressure on the working force of these platforms. To solve this issue and to make quick deliveries, Instacart launched “Fast and Flexible Delivery”. Fast and Flexible Delivery allows customers’ orders to match with shoppers’ availability.
With this additional feature, customers no longer need to wait for delivery windows to be vacant. Instead, they can schedule it and get it delivered by the first shopper available.
Want to know more about Instacart’s features? Hop onto the company’s official news site.
Pros and Cons of Using Instacart
Every coin has two sides thus, it’s better to analyse the pros and cons of Instacart to make rational buying decisions.
Pros
1. Larger Geographical Availability
Instacart is available in more than 5,500 cities in the United States and Canada. Due to their larger geographical presence, they strive to provide prompt services to their customers.
2. Partners With the Local and Large Grocery Chain
Instacart provides a mammoth variety of products from more than 40,000 local and global grocery chains. This huge variety and availability of products allow users to fetch their desired products in no time.
Cons:
1. Service fees and delivery fees of 5% is levied on every order
For some, the service fees and delivery fees of 5% applied on every order might be a nuisance thus, it is one of the cons of using Instacart. This can be avoided by buying their Instacart Express Membership.
2. Many times product prices on Instacart are more than that in-store
Though grocery prices on Instacart are set by dealers, many times products available on the app are marked higher than their actual price. Several users have reported the instance where they are being sold products at an astonishing higher rate on Instacart.
What is the Cost of Using Instacart?
Instacart is one of the quickest grocery delivery platforms with a unique on-demand working model. It charges an optimal delivery fee of $3.99 on every order above $35. However, the delivery charges may vary if you want one-hour delivery, club store delivery, etcetera.
To be exempt from these delivery charges customers can buy Express Membership for $99/year or $9.99 monthly.
Instacart’s service fees are by default set to 5% or a minimum of $2. Also, though tips for shoppers are optional it is by default set to be 5% on every order. But, you can adjust or exempt the tip before checking out.
How Does Instacart Generate Revenue?
Instacart operates on the ‘Crowdsourcing Marketplace Model’ in which customers connect with personal shoppers who fetch their groceries and deliver them to their doorstep. As of March 2021, Instacart values $39 billion.
Since Instacart works on a crowdsourcing model, it ties up with supermarkets and grocery chains. This tie-up allows them to exempt the cost of warehouse and delivery trucks.
The 3 major revenue-generating sources of Instacart are as follows:
1) Delivery fees
Instacart levies a standard delivery fee of $3.99 on every order above $35. Moreover, the delivery charge becomes $5.9 for deliveries within an hour.
A standard delivery fee of $7.99 is applied on orders with less than $35 value. This way the company generates revenue by levying delivery fees on every order.
2) Membership Plan
Another revenue-generating source of Instacart is Express Membership Plan. Through this $99/ year membership, users can access free deliveries and other benefits as per the terms and conditions.
3) Standard mark-up price on some products and brands
Instacart applies a 15% or more mark-up price on certain products and brands that help them pay their shoppers.
Competitors of Instacart
1. Shipt
Shipt is a popular grocery delivery platform offering groceries delivered straight to your doorstep. The platform has a huge inventory of more than 40,000 products to browse with easy check-in and check-out system. With Shipt, you can shop, pay and schedule your delivery whenever you want and wherever you want!
As of December 2017, Shipt has been bought for $550 by Target Corporation.
2. Uber Eats
Uber Eats is another renowned food and grocery delivery platform based in San Francisco. The platform enlists numerous local restaurant and grocery chains for customers to order their desired food. With Uber Eats, customers can order, pay, track and manage their deliverables anywhere and at any time.
3. FreshDirect
FreshDirect is one of the longest standing online food and grocery delivery platforms. The platform offers food and grocery delivery service along with unique ‘packaged groceries and meals’ to customers. This helps to reduce waste and improve the quality and freshness of food.
How To Start an Instacart-Like Business?
The COVID-19 situation has further aggravated the need to go Digital! There has been a paradigm shift in consumer behavior. From shopping luxuries to essentials, online shopping is convenient and safe. Are you an aspiring entrepreneur willing to build an online business? The online grocery delivery business can be a great startup idea.
Groceries are an essential item and are always in demand. Today, people are pressed for time, more than ever. Hence, they prefer safe and hassle-free shopping alternatives. An online grocery website or app exactly offers them that kind of convenience. Whether you want to build an online grocery delivery app or want to scale the business, Eiosys can assist you at every step. We offer customized solutions as per your requirement! Schedule a consultation call now!
Interesting Read: Check out our blog (How to start grocery delivery business). It is a comprehensive guide on launching grocery delivery app.
Bottom Line
Getting groceries for daily needs can be difficult in a pandemic. Thus, there’s a surge in the use of grocery delivery platforms among Americans. With the online grocery delivery platforms, you can order your home essentials from anywhere and at any time. One of the popular grocery delivery platforms is Instacart- a one-stop destination for all your grocery needs. The app is easy to use and user friendly and delivers on the same day of ordering.
If you’re looking for a platform to deliver hygienic groceries in no time, switch to Instacart and experience the best shopping experience. Furthermore, if you’re interested in more interesting content, you can also read another blog that we think is pretty useful – How BigBasket works? It describes the India’s top grocery delivery platform in detail – what they do, and how they do it.
