Catching up with Instacart

Since its IPO last September, Instacart has stayed busy, and not just with getting consumers their groceries.

This year, the e-commerce company has been diversifying its offerings to consumers as well as retailers and CPG brands, unveiling a flurry of new partnerships from Uber Eats to YouTube in recent months as it pushes into new retail categories and grows its off-platform retail media presence.

Retail Brew caught up with Instacart CMO Laura Jones and chief business officer Chris Rogers to break down these recent initiatives and how they fit in with the platform’s evolving business strategy.

Watch the shop: Last month, during the Cannes Lions festival, Instacart announced a partnership with YouTube aimed at making the video platform’s ads shoppable, leveraging Instacart’s first-party retail media data to target “high-intent” customers and allow them to add on-screen products right to their Instacart carts, according to the company. Early partners on the effort include Clorox and Publicis Media. The announcement came less than a week after it rolled out a partnership with New York Times Cooking to make the publication’s recipes shoppable.

These partnerships, along with other collaborations like with Google Shopping, are part of Instacart’s focus on off-platform retail media, intended to make “more of the surfaces available to be shoppable,” Rogers said.

Converting consumer purchases via shoppable videos isn’t easy, Jones noted, but new partnerships that allow consumers to quickly add advertised products to their carts has removed some of that friction. Now, Jones believes video advertising is reaching a “tipping point of moving from a theory of shoppable to this actually becoming a widely used behavior.”

Cart blanche: Instacart is also spreading into new retail categories. In May, the company made its entry into the restaurant delivery space through a partnership with Uber Eats, adding a “Restaurants” tab to its app allowing customers to order delivery through the Instacart app. Jones, who spent six years at Uber across several marketing roles, said the move is an effort to provide a broadened selection and more convenience to consumers. Meanwhile, its retail partners are “extremely excited” that Instacart is “keeping the entire food ecosystem on our platform,” Rogers added.

In addition to restaurant delivery, Instacart has also been expanding into other retail categories, growing its collaboration with The Home Depot and introducing same-day delivery through Sally Beauty last month. Rogers said this push is intended not only to give consumers more options, but to also meet retailer demand.

“It’s not easy to solve things like same-day delivery for large, complex retailers, and a big part of what we do is we provide white-label services to our retail partners,” he said. “It was an opportunity for us to expand our platform with a bigger set of retailers.”

Still, Jones noted that grocery continues to be Instacart’s leading value proposition, while it works to introduce consumers to its other offerings on their second or third shop via email or through banners on the app.

“Over time, I could see also going to mass media with other messages,” Jones said. “But we’re still pretty early in the penetration of online grocery. I really think of us as going in grocery first, but not grocery only, and really building that relationship with the customer over time.”

Smart cookie: It’s also still early days for the penetration of smart carts in grocery, but Instacart has been continuing to push the tech with its Caper Carts since the company acquired Caper AI in late 2021, adding several new retail partners in recent months. This year, it began rolling out the third iteration of the carts, which are lighter and feature enhanced computer vision and improved interface functionality. The carts, too, offer advertising opportunities for brands, with the location-aware carts even able to advertise to consumers based on their location in the store.

And Instacart’s consumer shopping data has allowed it to get even more specific with its advertising on Caper Cart screens. While serving a pasta sauce ad to a consumer putting pasta in their cart may be a no brainer, the company has also found a few more unexpected correlations, like dog food buyers are 1.4 times more likely to buy donuts, or those who purchase diapers are then more likely to buy jerky and trail mix.

“Brands spend millions of dollars trying to understand the basket composition; we’re going to know in real time what’s in the basket,” Rogers said. “You can learn about the consumer as they shop and then you can make those connections.”