What is Instacart?

We, Indians have a wide knowledge of Swiggy, Zomato, and Uber eats. These are some of the leading online food delivering companies. Likewise, Instacart is a well-known online grocery delivery organization. Instacart operates in most of the major cities in North America and the United States.

Instacart now stands as the toughest competitor for other grocery selling organizations. Their growth purely depends on the innovation and problem-solving strategy in selling groceries online. This helps them to achieve this feat in a short time. They have their own brand app that supports all android and iOS platforms and websites to do shopping with them.

What is the Instacart business model?

Now, Instacart is a well-known grocery delivery company that delivers your desired grocery from your desired stores and delivers them to you within one day. You can schedule your delivery time too. If it is possible they can deliver to you as soon as possible within one hour. Instacart works based on customer demand.

Primary Business model of Instacart

All the entrepreneurs grew by providing a solution to the existing problems to the people in the society. In this technological era, everything turns online, purchasing of foods, banking services, and other entertainment-related services, etc…

Time is a valuable asset. People spend most of their time working for a company and doing basic needs like eating, sleeping, and studying. For purchasing grocery items for preparing food, you need to get out to an offline grocery store by walking or using vehicles. Then you need to look out for your desired grocery products. Or else you will need to get to another store. For all these tedious processes you will need to spend an average of 1 hour.

Instacart tries to move all these processes online through e-commercing grocery items that save your valuable time. They decided to sell the grocery items online to the desired customers. They have initiated Instacart in 2012. Before the rise of Instacart, several startups have failed in succeeding in this model.

Market crisis while Initiating

At the time of initiating instacart world’s leading e-commerce organization amazon has been ruling the market through their Amazon Fresh sector. Other potential competitors were Walmart and uber eats.

Instacart has made a partnership with the leading Grocery delivery organization, “Whole Foods Market”. But Amazon has brought all the shares of Whole Foods Market.

How Instacart works?

Instacart believes that people often show interest in doing app-based transactions and services. This urged the developer to design an app for doing online grocery delivery. At present, you can make grocery shopping through the mobile app or using the Instacart website.

Instacart app

You can easily shop through the Instacart app by following the below-mentioned steps.

Download the instacart app from the Playstore
If you are a registered Instacart user, just enter your login credentials
Whether you are a new user sign up by providing the details.
After the successful login, you can surf through thousands of groceries available. In this category, you can choose your desired groceries.
If you need to know about the grocery stores and their stocks in your area, enter your area pin code. So that you can check the list of available groceries stores in your area that have a tie-up with instacart.
You can select a bunch of products in a single store or also you can choose different products from different stores.
Then you are advised to pay the required money for your order along with the delivery fee, service charge fee, and delivery agent tip.
Your order will be delivered within 3 hours or by the scheduled time that you mentioned while ordering.

The same steps will be followed for ordering online through the Instacart website.

Instacart strategies

People find the Instacart app as user-friendly software to get their things easily done. Following are some of the strategies they have followed to reach their income from 2 billion to 32.9 billion within 9 years.

Instacart has made tie-ups with almost most of the local shops and supermarkets in the city. At present they are in partnerships with nearly 5,500 grocery stores.
They are delivering the groceries directly procuring the groceries from the store itself. So that they are saving a lot of money from maintaining the inventories, buying stocks for inventories, and building warehouses. They don’t have any warehouses like Amazon.
Apart from hiring full-time workers, Instacart was hiring part-time contractors. They are hiring two types of workers one is for preparing and packing the orders in the grocery store and the other is to deliver those products. Salary will be on an hourly basis and the number of orders done.
They are providing premium Instacart membership which includes new benefits like speedy delivery within an hour, free delivery charge, free from service fee, etc…
Instacart primarily focuses on improving their mobile application and the website to increase customer satisfaction in shopping.

Pandemic scenario

Pandemic has created hard-hitting scenarios for all businesses which are vice versa for online grocery selling organizations. In the pandemic crisis, Instacart users have been increased by 500%. Due to the lockdown restrictions, people have opted for online grocery delivery agents like Instacart, Amazon Fresh, Uber Eats, and Walmart, etc…

Pandemic has increased the supply-demand for Instacart. The current sales revenue of Instacart is 39 billion inMarch 2021. Now Instacart operates in the U.S, North America that headquarters in California, San Fransisco, and the United States with 5,500 grocery stores, 5,00,000 workers, and 9.6 million active users.

How you can replicate Instacart business model?

Initially, search for the problems in the field you are willing to initiate a startup company.
To create brand value and to make your sales successful, design a user-friendly app based on your customer’s needs.
Reduce the cost like Instacart by finding an alternative which is the cost-efficient way. . Instead of spending on warehouses, they go for direct contact with the grocery store.
Stick to the customer’s opinion and feedback of your service.
While designing the app, includes new features, subcategories, an easy keyword search box, 24/7 customer support assistance, and different modes of payment options.
Stick to your business model firmly. Work on your business model and marketing strategies if they needed a change.
Apply the instacart business model in your local city. Big Bazaar, Jio mart are some of the Indian online grocery selling companies which are similar to the Instacart Business model.

This would have certainly helped you to establish a successful organization like Instacart.

Commission

As per the agreement made with the retailers each and every time Instacart receives some percentage of money, when the item is sold through the platform. In order to increase markup, Instacart itself sells the products at some higher price range.

Delivery Fees and Service fee

Like other online delivery platforms the delivery charges vary according to the weather and the demand. Through Delivery charges the company gets some price as profit. The service fee is between 5 to 10% for the purchase.
Subscription – Instacart owns a subscription service named Instacart Express. Providing unlimited deliveries for the orders above $35.
Advertising – For additional visibility sellers and brands can advertise on this Instacart platform. This is one way Instacart makes money.

Frequently Asked Questions

Is there any order limit?
For pickuping orders there is no limit but for the ordered items there is a limit of 250.

What are the payment methods used in Instacart?
All forms of payment methods is accepted by Instacart UPI payments, Credit and debit card payments.

Does Instacart need a membership to Shop?
No, Instacart doesn’t require membership to shop. But it has a Membership option that helps people to get free delivery when they order above $35.

Who owns Instacart?
Maplebear Inc, Owns Instacart

How Instacart works? What is Instacart Business model and How you can replicate it?