Today, for almost every process that has been in practice for decades or even centuries, that is a technological dimension. It is quite likely that the manifestation of this technology is a mobile app. It might not be an exaggeration to say that there is an app for almost everything today. It all started with Uber in 2009 which revolutionized taxi booking. The same business model has spread its tentacles into every possible spirit of our lives. Ordering food from a restaurant, or junk grocery, requesting handyman services and babysitters, delivery of medicines, and even dating has come into the folds of this business model.
In all of these, grocery delivery deserves some very special mention. Upon closer inspection, it would be quite obvious that almost every other business model transformed by the on-demand revolution caters only to a specific set of audience. Unlike anything else, grocery is likely to be consumed by every household. This makes every home on the planet with at least one active spot phone connection a potential customer for grocery delivery apps.
One of the biggest concerns when it comes to facilitating grocery delivery on demand is the jeopardy that local businesses face. For a long time throughout history, grocery has always been a local business. Maybe a lot of supermarkets made their entry in some of the most impossible geographies like India. However, none of these have been able to completely replace the relevance and profitability of local grocers.
In all of this, it cannot be denied that the market for online grocery is steadily growing. It is expected that online grocery will grow by 300% and reach a value of about $74 billion in 2023. More than a third of people prefer to shop for groceries online. This shift has to be credited to the movement of power from boomers to millennials.
The COVID-19 pandemic, however, changed the equation for the consumption of essentials. The imposition on social distancing and the restrictions I’m going out meant that grocery shopping would not be the same again. At the same time, there was also a need for safeguarding the interest of local businesses. How was this possible?
Turns out that the answer has already been found, not in 2020, but way back in 2012. The credit for this answer has to be given to a revolutionary grocery delivery service called Instacart.
Instacart was founded in 2012 by the serial entrepreneur Apoorva Mehta. Just like many other technical innovations, it started in San Francisco. Slowly it spread to Illinois in 2016, and came home to Canada in 2018, and it continues to grow steadily. Instacart also stepped into alcohol delivery in 2019. The COVID-19 pandemic served as a silver bullet for the company, and it resulted in the hiring of more than 300,000 staff between March and May 2020.
What made Instacart special is its business model which is a combination of Uber and Airbnb. Instead of depending on the houses like Amazon, Instacart decided to tie up with local grocers, so it creates a symbiotic relationship for the business, the local grocery, and the users. Its business model paved the way for massive expansions. Today, Instacart operates in over 5500 cities spread across all the 50 states of the US. It has tied up with 350 retailers and 25,000 grocery stores in Canadian provinces.
How does Instacart work?
The way in which Instacart works is not much different from all the other on-demand apps. The user can download the app and create a profile. The app takes into consideration the location of the user. Based on this data, the app gives all the possible options of groceries that the user can add to the cart. The user can make a payment using digital payment methods.
Parallel to this, a push notification is sent to delivery partners referred to as InstaCart shoppers. InstaCart shoppers are of two types. The first kind of them stay in big grocery stores, and as soon as the order is sent, they start filling the shopping bags. Another independent delivery executive picks up the shopping bag and delivers it to the customer. The second kind of Instacart shoppers takes care of both the delivery and the shopping. Based on their experience with the grocery store and the delivery executive, the user can review and rate a particular purchase. The payment from the grocery is made through an exclusive digital card provided to the Instacart shoppers.
Instacart charges a flat delivery fee for all grocery delivery. The users can also opt to pay an upfront annual fee for unlimited free deliveries. In certain instances, depending on the demand and supply, and the need for expedited delivery, Instacart charges an additional delivery fee from the customers. These delivery charges contribute a large chunk of Instacart’s profits. There have also been instances of Instacart marking up the prices of grocery items and the difference is also accounted in the prophet made by the business.
The multifaceted benefits
The business model of Instacart is designed to provide benefits in every area it can possibly impact.
For the user, it presents a simple and straightforward way of ordering groceries. It also gives them the comfort and convenience of ordering food from their homes, which is a welcome mom during the COVID-19 pandemic. The service is available across all platforms including but not limited to desktops, laptops, tablets, and mobile phones. The user is also provided with the flexibility to schedule their delivery, so they do not miss out on receiving their groceries.
The Instacart shoppers form an important segment of the Instacart grocery shopping ecosystem. They are, in essence, gig workers who look for an additional source of income. Therefore, an app like Instacart also generates new employment opportunities. They can also possibly earn a tip from customers.
For the grocery stores, it means an additional channel of revenue. The on-demand grocery delivery app is extremely relevant during the time of the pandemic, and the lifestyle is expected to be retained even after the pandemic is over. Instacart has created a fine point where the grocery store can embrace technology but at the same time, does not have to compromise on the local business. Instacart is a perfect example of how the introduction of technology does not destroy but rather augment existing local businesses.
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Building an app like Instacart
Instacart has shown the world how a business can be built by connecting local businesses with local consumers by using a global technology. Given the fact that smartphone penetration and Internet access is steadily rising across the globe, it presents an interesting and lucrative business model for any aspiring entrepreneur.
It is true that the business, the legal, and the recruitment aspects need to be taken care of. However, one of the most inevitable parts of building a business like Instacart is to engage in an Instacart like app development.
Building an app like Instacart from scratch, however, might be a cumbersome and tedious process. Alternatively, you can go for an Instacart clone app. The process of Instacart clone app development is a lot easier, and more often than not, it is all about customizing a white label Instacart clone script.
All you need to do is get in touch with a company that specializes in Instacart clone app development and customization. They will take care to not only build the app but also customize it according to your business requirements, so you can launch your Instacart like grocery delivery app in the shortest possible time.