Instacart is an internet-based grocery delivery and curbside pickup service company that works in over 5,500 cities across the United States and Canada. It is a publicly traded company on the NASDAQ stock exchange, with its initial public offering (IPO) taking place in September 2023.
The company renders its services through a website and mobile application, through which customers order groceries from participating retailers. Retailers include more than 400 national, regional, and local retailers across more than 80,000 stores in the United States and Canada.
Instacart has various platform-as-a-service offerings for consumers, independent contractors, retailers, and advertisers. Two of the most popular uses of the Instacart platform are used by shoppers who want groceries delivered and by people wanting to earn money by delivering groceries.
Consumers can use the Instacart platform via a web browser or by downloading an app for Android or iOS devices. Groceries can be ordered for delivery or curbside pickup from participating retailers. Consumers can pick the items they want from a grocery store, and personal shoppers who are also using the app will take the order. While at the grocery store, the shoppers can communicate with the consumer on the Instacart app to give updates or ask questions. Then, the order is delivered at a time that is designated by the consumer.
The option for curbside pickup still utilizes a personal shopper, but the consumer can arrive at the retail location at a designated time to pick up their groceries. Depending on the retailer, the consumer can simply pick up their groceries, or an employee from the retailer can help to bring the groceries to the consumer's vehicle.
In May 2023, Instacart launched a new feature called Ask Instacart, which is an in-app generative artificial intelligence (AI) search tool that uses ChatGPT to help customers with finding the products they need and creating personalized recommendations.
The feature is designed with the intention of helping Instacart customers save time by answering questions related to recipe ideas, budget, and dietary recommendations. The technology used in Ask Instacart makes the feature more personalized the more a consumer uses it. Ask Instacart gives personalized question prompts, reminds the user of the need for specific products based on past shopping experiences, and matches the consumer with different products to try based on products that they have already purchased.
Instacart charges a $3.99 fee for same-day deliveries over $35 as of September 2023. There are different fees for transactions under $35 and for deliveries that need to be made in less than one hour.
A premium membership plan is called Instacart+. It is $99 per year or $9.99 per month. This plan has several benefits, such as lower service fees and free delivery for orders that are more than $35.
Consumers can pay for their groceries using several different methods. They can use a credit or debit card as well as an Instacart gift card. Instacart partnered with Mastercard to release a branded credit card that has special benefits linked to using the Instacart platform.
Instacart also supports payments through the Supplemental Nutrition Assistance Program (SNAP) in the United States. Consumers can use their electronic benefit transfer (EBT) card to pay for groceries from participating EBT SNAP retailers and states.
Independent contractors can also earn money using the Instacart platform by working as "shoppers" for the company. They can choose to work part-time or full-time; shoppers can also choose to be a full-service shopper who does both the shopping and delivery, or they can be an in-store shopper who picks out items for curbside pickup orders.
Shoppers need to download the app and get approved to be a shopper. Then, they can see grocery orders that are available in their area and choose which one they want to take. While the shoppers are picking out the groceries, it is expected that they communicate with the customer on the Instacart app. Shoppers can tell the customer when a retailer doesn't have an item on the shopping list and if they want it replaced. Finally, they can take the groceries to be picked up curbside or deliver the groceries.
Brands can use Instacart to advertise and distribute its products. Instacart Ads allows brands to show their products to customers through promotions on the platform and offers various advertising formats. It also has tools for brand management and business intelligence with ad management, insights, and A/B testing.
Instacart created solutions to expand access to healthy food options under the umbrella called Instacart Health. One offering is Care Carts, which is a grocery delivery option where organizations and individuals can send food and other supplies directly to clients in places such as hospitals. Instacart Health also has a feature where healthcare experts and dieticians can make detailed lists on the app for customized diet plans for their own clients and send the lists using the platform.
Instacart had its IPO on September 19, 2023. Instacart shares entered the market at $42 per share and closed that same day at $33.70 per share. At the end of the company's second day, the NASDAQ exchange, it was valued at approximately $11 billion. All three of Instacart's founders sold at least a portion of their shares, netting between $20 and $40 million dollars each.
Part of the IPO proceedings included one of the cofounders and former chief executive officer (CEO) of the company, Apoorva Mehta, stepping down from his board position and his position as executive chairman. Fidji Simo, the CEO of the company since 2021, took over those positions.