The future of food e-commerce looks very different and Instacart has positioned itself as an important catalyst for further transformation. The San Francisco-based company may have become known as a grocery delivery company, but in the past few months it has closed a series of deals marking the transition to what top executives have dubbed a “retailer enablement platformâ€.
Last October 19, Instacart acquired Caper, an artificial intelligence platform for shopping cart and checkout technology. On October 7, Instacart acquired FoodStorm, an order management system that enables grocers to integrate food service orders into their e-commerce offerings. Additionally, Instacart caused a stir in July when it announced a partnership with robotics company Fabric as part of a next-generation fulfillment initiative.
These steps come amid a major leadership change that puts the future of the company – and food e-commerce – in the hands of two former Facebook executives. On August 2, less than a year in her tenure as a board member of Instacart, Fidji Simo joined the company as CEO. Two days later, her former colleague on Facebook, Carolyn Everson, was named to the newly created role of president. Now the couple are eager to establish Instacart as a unit that has not existed before in the food world.
The deal with capers
“When we say we’re a retailer enablement platform, it means we’re giving grocers the technology they need to compete, be it online or even in-store like Caper,†says Simo . “We see ourselves in providing grocers with the best technology to sell to their consumers in the best possible way, regardless of how their consumers shop. That obviously started with online grocery delivery, but also with the sites of many of our grocery stores providing pickup and delivery on their own and operated properties. “
According to Simo, the caper deal is especially helpful for grocers who are afraid of competing with Amazon.
“Caper AI fits in with our strategic priority of being the technology partner grocers turn to,” explains they have the skills and financial strength to develop many of these new technologies, and we want our grocers to enjoy the same advantage. We see capers as a way to give them this advantage. “
Caper is reimagining the in-store shopping journey by developing AI-powered shopping carts and automated checkouts that merge online and offline purchases to give customers a new in-store shopping experience. With Caper’s object recognition system, customers can put fruit, vegetables and other items in their shopping cart without having to scan or weigh the products, and check out directly at the shopping cart. The company is also developing smart checkout counters that use cameras and a weight sensor to automatically detect items placed on a counter.
For retailers, Caper’s smart cart technology offers a plug-and-play solution that Instacart says requires little investment. Caper’s technology enables brick and mortar retailers of all sizes to use this technology in their stores to create compelling experiences for customers and fuel significant growth for their business by increasing average shopping cart sizes compared to traditional shopping carts. Over time, Instacart expects to integrate Caper’s technology with the Instacart app and its trading partners’ e-commerce websites and apps to enable customers to create online shopping lists and browse recipes in advance and check off their lists on the go.
“We hear from retailers that consumer habits are changing and that there is a new resting heart rate after the pandemic, both on the Instacart marketplace and on retailer websites where consumers expect a variety of options for online delivery, Pick-up, etc. â€, says Simo. “What retailers are really asking us to do is make sure we continue to help them stay competitive and help them meet a new range of consumer needs. For example, when you see the rise in fast selling and the fact that the convenience sector is growing rapidly, many retailers wondered, “What can we do together to meet these consumer needs?” That’s why we have the Kroger Partnership, a new offering for retailers, to capture this consumer trend. “
Conquer the world with FoodStorm
Instacart’s acquisition of FoodStorm offers retailers yet another solution, this time for digital food service orders. FoodStorm’s software-as-a-service includes multichannel orders – e-commerce, phone or in-store kiosk – order management; and payment and fulfillment. The technology also integrates with a wide variety of third-party systems, including point-of-service systems, and provides customer relationship management capabilities that help grocers collect feedback, market their offerings, and use advertising capabilities. With this acquisition, Instacart expands its enterprise technology portfolio to further support the digital food service operations of its retail partners and invests in more technology solutions to help retailers grow, become more competitive and better meet the changing needs of their customers.
“People eat, give or take 21 meals a week, and we want to help our retail partners give their customers more opportunities to get those meals out of the grocery store more often,” said Mark Schaaf, Instacart’s chief technology officer. “We believe this will help customers find a healthier, cheaper alternative than restaurant delivery and make it easier for people to order prepared food online directly from their preferred retailers where they are shopping today. That’s another really exciting aspect of this acquisition. “
Fabric by design
Instacart first began offering business technology to food partners in 2017. Since then, the company has continued to make significant investments in its corporate business, growing its engineering team and developing new technologies for grocers. Instacart’s multi-year deal with Fabric earlier this year aims to combine the speed of robotics with the human touch and attention to detail of Instacart shoppers for faster turnaround of customers’ entire grocery store, from packaged goods to over Household items and groceries to delicatessen items, frozen foods and alcohol. Once the orders are carefully packaged, buyers deliver the orders to customers’ doors or place them in staging areas for pickup on the side of the road.
Instacart plans to launch concept pilots in the coming year and beyond in collaboration with fabric and food retail partners. The new partnership seems to offer grocers some fascinating opportunities; However, Instacart and Fabric have stopped providing key details about the start of their next generation fulfillment collaboration. For example, the companies did not specify how many dedicated facilities they would like to open, what timeframe, roughly how big they are, or when a pilot site could be operational.
Rumor has it that Instacart, valued at $ 39 billion, is planning an IPO in the fourth quarter, but the company neither confirms nor denies such a move.
“We are very focused on building a company for the long term,” assures Simo. “Of course we want to be a public company someday, but right now we’re really focused on building the business. Our strategy is very different from other companies joining this space as we will never compete with our retailers. We really see Instacart as a business with growing grocery retailers, and that’s very different from others when it comes to online delivery. “
