The Technology Acceptance Model (TAM) is on the go, giving the very plausible means for the eCommerce industry to thrive in today’s age. Grocery shopping is a run-of-the-mill experience. The dawn of Instacart instills nuances of conventional grocery shopping by incorporating technology to help customers to shop their groceries using the app.
Instacart simplifies your grocery shopping experience by helping you to save much of your time and money. The on-demand grocery delivery platform allows customers to get their humdrum chores done at ease while you experience the real power of technology. The on-demand grocery delivery firm exploits a technology operated business model and is probing a high success rate to its revenue stream.
Emphasis on Instacart Facts and Figures
Instacart took its inception in the year 2012. Entrepreneurs go awestruck with such a technology-centric business model. The on-demand economy has received enormous funding to outreach the operations of grocery delivery all across the USA.
Some Interesting facts to share about Instacart
- Founders – Apoorva Mehta (Founder/CEO) and Max Mullen (Co-Founder)
- Valuation of the Company – $7.6 billion until Oct 2018
- Funds received – $1.9 billion as of Nov 2018
- Revenue Generated as of Jan 2019 – $2 billion
- Headquartered at – San Francisco, California, USA
Timeline of Instacart Unveiled
- June 1, 2012 – Incubation in Y Combinator
- October 15, 2012 – $2.3 Million Seed Investment
- July 1, 2012 – Instacart Launch
- July 10, 2013 – $8.5 Million Series "A" Funding
- July 16, 2014 – $44 Million Series "B" Funding
- December 30, 2014 – $220 Million Series "C" Funding
- March 7, 2017 – $220 Million Series "D" Funding
- February 12, 2018 – $200 Million Series "E" Funding
- October 16, 2018 – $600 Million Series "F" Funding
- November 15, 2018 – $271 Million Series "F" Funding
Instacart is still a start-up but has seen tremendous funding from the investors at its debut stage. It shows up the Investors’ trust in this business venture. Instacart positions significant features and value propositions to its business model.
Features of Instacart to stay Smart:
Instacart has housed its presence in weighty areas of the USA that include the San Francisco Bay Area, Brooklyn, San Jose, Washington DC, NYC, Los Angeles, Austin, Seattle, Chicago, Philadelphia, and Boston.
Customers are provisioned to reach out to over more than 300,000 items from a range of stores. It includes many stores including Safeway, whole foods, and Costco, giving the customers their space to place orders over the app from any store they want. They can also order a mix of items from each of the stores and group it as a single order.
A collection of over 300,000 items are available for the customers to order from several stores such as Whole Foods, Safeway, or Costco. It enables the customers to place orders from their favorite store or a mix of items from different stores into one order.
Instacart’s Value Proposition:
- Partners with well-known supermarkets
- Gigantic source of inventory
- No-warehouse model
- Car owners who are ready to spare their time and work part-time
- Instant and on-time delivery
- No fancy delivery trucks
Customer Segments served by Instacart
Instacart delivers a successful business model by offering services to a trio-combo pack of customer segments
- Users can reach out to stores and items through the instacart app, through which they can order groceries of their interest either from one store or multiple stores
- Customers can make the payment online within the app
- Users are given a choice to shop from any store that is located in their located in their area
- Users can do the app work done through a laptop, desktop or from their smartphones
- Shoppers are tipped in advance at the time of the checkout.
- Users can pre-plan their grocery shopping and schedule the orders to get it delivered within a specific time frame.
- Shoppers receive the notification in their smartphones once the user places an order.
- Their job is to pick-up the items ordered and deliver it to the user.
- Shoppers are paid on hourly basis
- Shoppers are located close to the stores to save time
- They pick up the ordered items and deliver it to the user
- Customers can feel free to tip the shoppers during the checkout process.
- Instacart has a well-established partnership with some well-known supermarkets in all significant cities.
- Instacart stands a base for mammoth revenue generation through online sales.
Working Principle of Instacart Business Model
- Instacart app helps customers to order the groceries as per their requirements.
- The shopper receives the order notification through the app, and he/she picks up all the order items manually.
- Users sometimes pay tips to the shoppers during checkout and the admin will dispatch them out during payouts.
- Payment is made online through the Instacart app.
- Instacart’s prepaid debit card gets accepted in all stores, and the shopper gets his bill paid through that card.
- The payment done during the process of checkout gets stockpiled in the instacart wallet. Admin will pay it with the salary during the payout.
Instacart’s knack on its Big Bumper Revenue Harvest
Any order processed through Instacart which has a valuation above $35 entices a fixed delivery charge of $3.99 for a delivery scheduled in 2 hours, and they charge $5.99 for the same to get delivered within an hour.
Orders that sum up to be a value lesser than $35 are priced $7.99 for a 2-hour delivery and charged $9.99 for orders scheduled to get delivered within an hour.
Instacart Express (Membership Fee)
Instacart extends an annual membership scheme priced at $99 and is termed Instacart Express. Users can opt for the membership to get groceries delivered at no cost for the entire year in line with applicable terms and conditions.
Most of the time, the products sold through the Instacart platform has the same price as of the stock price. In very few cases, they charge 15% higher than the store price. The mark-up charges of the products are dependent on the type of store the customer purchases the groceries. The revenue earned through these mark-up fees gets dispatched directly to the Instacart’s shopper’s wallet, and they get cleared during payouts.
Instacart and Customer Relationship
Referral Programs (Word of Mouth Marketing) – The existing customers of Instacart can engage in the referral program, to earn $5 credit when they refer a new member every time.
Promotional offers – Instacart extends its market presence through its promotional offers, probing the customers to use their best deals and offers.
First Free Delivery – Who does not want to cart all the list of groceries for free home delivery? Instacart hypnotizes customers with a free delivery option for users who choose to use the instacart facility app for the first time.
Internet Marketing – Instacart exploits the best use of the Internet to pose its market presence in all possible ways. Social Media is the best means of marketing to connect its businesses with customers.
Multiple offers – Instacart offers time to time deals and discounts, to retain its existing customers.
Key Challenges and Solutions
Retaining Shoppers: Shoppers at Instacart are employed on a part-time basis, keeping them is quite severe, and instacart finds it a bit challenging. However, Instacart came up with an option to add tips feature for the shoppers at the checkout section of the app. So the shoppers were able to earn some extra money to their pockets from the customer’s tips.
Running Short of Delivery Time: The expected 2-hour delivery was another challenge added on to the list. Instacart is ultra-careful to meet the customers’ demand. As a solution to this, instacart placed shoppers outside its partner stores, allowing the shoppers to save 50% of the time as they will already be at the store when the order gets placed.
Inadequate Shoppers: Instacart Shoppers work flexible hours as they come to earn extra income. Managing and assigning tasks to the squadron of freelance shoppers is not an easy task. Instacart has come up with a sparkling deal to boost the shoppers’ earnings. When there is a high demand for shoppers at a particular locality, the delivery charges go a few dollars higher than average fees. The additional fare is split in proportion to the shoppers while they tend to work at a faster rate.
Building Customer Trust: Instacart used different mark-up prices initially in the starting stages. So the customers started losing their trust over Instacart, and users began refraining from using Instacart. However, some users are kind to pay the special marked-up prices to get groceries at their doorstep conveniently.
Out-of-stock Products: Sometimes, the ordered item on the list may go out of stock. In that case, the shoppers can get in touch with the customers to buy or replace it with a similar thing in the order list. However, customers came up with complaints that they received products that were not on the list. Instacart worked out on a smart solution, and the backroom boys coded on a comment section, for the shoppers to add comments as a reference to the customers.
Possibilities of the Wrong Item to be Delivered: In some cases, shoppers purchase a wrong item and delivers it to the customer. Here again, Instacart houses a customer support team, who can be reached by customers to initiate the return and refund process of the mismatch item.