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11/10/2021

Instacart Is Launching Free Delivery, Other Deals

Company aims to make digital grocery more affordable during inflation crisis
Gina Acosta
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The new features from Instacart come at a time when 23% of grocery shoppers plan to shop for groceries online more within the next year.

Instacart is launching a diverse array of new features designed to meet the grocery shopper where they are at now: that is, stressing out over inflation, grocery prices and holiday planning.

Rolling out across the Instacart App are: a Deals Tab and exclusive savings for Express members, a new reduced cost and free delivery option, and a new “Dollar Store Hub” destination on the Instacart marketplace.

This new slate of features come at a time when grocery costs are continuing to rise across North America ahead of the holidays and amid increasing global supply chain challenges. 

The Labor Department reports that consumer inflation reached its highest point in more than 30 years. Overall, the consumer price index (CPI) is up 6.2% over last year, higher than the 5.9% Wall Street consensus projection. Prices continued to creep across several consumer product sectors last month, including food, which ticked up 0.9% in October, the same increase as in September. On a year-over-year basis, food prices are 5.3% more than in October 2020, with food-at-home prices up 5.4% and food away-from-home prices rising 5.3%.

Many consumers will feel these increases on items like corn, dinner rolls and cranberry sauce as they prepare for Thanksgiving, and even frozen turkey prices are already 25 cents more per pound than they were a year ago, according to the USDA’s Turkey Market News Report. 

“Giving people more access to food and more time to enjoy it together has always been core to our mission. For most families, when it comes to grocery shopping we know that every dollar matters. Outside of rent and transportation, groceries are one of the largest monthly budget expenditures for most households. Roughly 60% of offline grocery transactions in the U.S. include coupons, and across our own marketplace customers have already saved more than $400 million this year,” said Asha Sharma, chief operating officer of Instacart. “That’s why we’re proud to roll out these new features that help customers get exactly what they need, while also saving along the way. Online grocery shouldn’t be a luxury, and we’re committed to making Instacart the most affordable way for families across North America to get the food they need from the retailers they love.”

The new slate of features in the Instacart App include:

  • New Reduced Cost and Free Delivery: In select markets, Instacart is testing a new delivery option, which will reduce or waive the delivery fee on orders placed more than 24 hours in advance of the desired delivery date and time.  
  • A Deals Tab: Instacart is reimagining the grocery circular for the digital age, making it easier for people to quickly find the best deals from their favorite retailers and brands with a new Deals Tab. Instacart already runs hundreds of thousands of deals and coupons across its marketplace every day, and the Deals Tab will offer millions of dollars in savings with daily coupons from retailers and consumer packaged goods companies. Customers can visit the tab to browse sales in their area and save on weekly staples, bulk products or special occasion items, with discounts on everything from birthday cakes and steaks to seasonal decor and electronics. 
  • 5% Credit Back on Express Pickup Orders: Instacart is also bringing additional savings to Express members who use the company’s contactless curbside Pickup offering, one of the affordable ways to shop at Instacart. All Pickup customers already save on service fees and do not pay delivery fees. Over the next few months, Express members will get even more savings with 5% credit back on their eligible Pickup orders, usable on future orders placed via Instacart. The company has expanded Pickup to more than 4,500 stores nationwide across 120 grocery partners, including Aldi, Food Lion, Gelson’s, Publix, Price Chopper, Schnucks, Shop ’n Save, Sprouts, The Fresh Market, Wegmans and more giving customers the option to save time and money by ordering online and picking up their groceries when they’re on the go. 
  • A Dollar Store Hub: In addition to offering food and essentials from value grocers like Grocery Outlet, Aldi, Save Mart, Price Chopper and Food Lion, Instacart is also introducing a new Dollar Store Hub in the Instacart App. Customers can now browse dollar store deals and discover more savings from over 13,000 dollar stores including Dollar Tree, which now offers nationwide delivery from more than 7,000 stores as well as the 99 Cents Only Store, Five Below and Family Dollar.

The new features from Instacart come at a time when 23% of grocery shoppers plan to shop for groceries online more within the next year, with over half (64%) planning to continue shopping at their current level, according to new Acosta research.

Thirty-one percent of shoppers who are active online all or most of the time plan to increase their online grocery shopping within the next year. Fifty-seven percent plan to stay the same. Twenty-seven percent of shoppers who shop regularly online but visit the store more often plan to increase their online grocery shopping within the next year. Sixty-one percent plan to stay the same. Ten percent of shoppers who shop occasionally online plan to increase their online grocery shopping within the next year. Seventy-five percent plan to stay the same.

Over half of consumers (59%) stick with their usual in-store retailer when purchasing groceries online but major aspects of the traditional shopping experience have changed. Thirty-five percent of online grocery shoppers now use their smartphones more often for planning and shopping. Thirty-four percent of online shoppers are now buying a wider variety of items and trying new products. Twenty-nine percent of online shoppers are now spending less time shopping. 

In the past few months Instacart has made key acquisitions (CaperAI, FoodStorm) as it looks to solve more problems for grocery retailers and as it prepares to possibly go public this year.

Instacart delivers from 65,000 stores across more than 5,500 cities in North America. Instacart’s platform is available to over 85% of U.S. households and 90% of Canadian households.

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