Are You Growing your grocery business or Instacart’s?
Instacart got you started but…should they be your long term solution?
You needed to have an online solution for ecommerce and/or delivery. You didn’t have the time or resources to do it yourself so you started looking at what you could do and more than likely how fast you could get it in place – especially if you were making these decisions during the pandemic. You probably found you could get an eCommerce solution in place easily but handling customers that wanted someone to shop for them (very big during the pandemic) and/or wanted delivery options was the difficult roadblock. As a result, you turned to Instacart because it was well known, turnkey, simple and full service.
Considerations you had when you wanted to make “an investment” into your digital commerce then were also based on it being 1-3% of your total business so if you just had “someone do it” it made sense. Now that percentage is probably a lot higher (like 5-10%) of your total volume and growing rapidly. If it is not, that’s another discussion because it should be. Most grocers have seen online become one their top volume stores if you view it as a location.
Most grocers now realize this part of their business is never going to go away. In fact, it is a probably a bigger percentage of sales than you ever initially expected. This is in alignment with most grocery industry experts as well and who are now expecting this digital commerce part of your business to double in percentage again in the next few years, climbing to 20% of your total revenues by 2025. This combination of items definitely makes investing in a solution more plausible now but also has you crunching the numbers if you were to keep paying Instacart as an outsourced solution. Those facts also has you analyzing how what you could be missing and ways to be more efficient and effective with your digital transformation.
Allow us to point out some details about what Instacart is potentially costing you the longer you stay with them:
- Continued ownership of your customer relationship
- Continued ownership of all your purchase data, trends, and ability to capitalize on those
- Pretty hefty fees – or causing you to charge a good percentage more for items and/or processing to not lose money – making it especially hard if you are an independent or SME
- Limitations on what you can do to enhance your customer experience, especially with your brand with personalization or marketing automation
- Customer loyalty because they really become an Instacart customer and not your customer online. They can switch to a local competitor that does through their Instacart account – and surveys of their own shoppers say they would go elsewhere to get what they want if needed
- Instacart shoppers in your stores affecting your staff by chewing up their time and annoying your customers as they don’t care about you stores or the other customers as they are there to make money and now they are contactors versus instacart employees
- Quality control over the accuracy, timeliness and experience with your brand for eCommerce, pickup & delivery
Should we keep going? Bottom line, your customers and ecommerce is teaching Instacart your business and helping them help to your competition because they are increasing their own capabilities (as further evidenced by them now opening fulfillment centers). What else can you afford to risk by continuing to work with them not to mention the data you could be using to improve your customer experience and relationships? The time is now to have your internal team become experts in this and to own your digital marketplace to maximize your effectiveness as digital continues to grow.
The good news is you have options – affordable and better options that can be up and running in a matter of months. If you still don’t want to worry about the last mile (delivery) which is one of the biggest reasons why a lot of grocers chose Instacart or Shipt as their solution in the first place, there are options for just that piece of the digital landscape you can utilize.
By upgrading your solution, you can control the entire customer experience, involve personalization and marketing to increase basket size, and make your brand stand out while enabling your digital experience to be focused 100% about your customer, their buying habits and your brand. That is very powerful to have as digital continues to integrate and expand with your customer base.
We would love to show you what you could be missing and have you evaluate how stor.ai could partner with you do digital better and more customer friendly is it becomes a bigger part of your overall business. Contact us today to find out more.