Amazon’s latest push into fast grocery delivery had a surprising beneficiary: Instacart.
Both Amazon and Instacart are competing to deliver your weekly supermarket haul — or maybe a fill-in trip for milk. Last month, Amazon said it had expanded same-day delivery on perishable groceries, such as meat and frozen foods, to 1,000 cities and towns, with plans to reach more than double that many by year’s end.
That’s a threat to Instacart, which offers delivery and other services to grocers like Aldi and Costco.
However, Instacart’s interim CEO, Chris Rogers, said the company benefited from Amazon’s move: It saw more interest in its services from the stores it works with.
“I think with a lot of our retail partners, I was their first call when that announcement happened,” Rogers said at the Goldman Sachs Communacopia & Technology Conference on Wednesday. “They were trying to understand, okay, how do we react competitively?”
Rogers said Instacart is using the “opportunity to get deeper, to use our technology in more ways to help retailers compete.”
In addition to delivery, Instacart is growing its ads business and other technology, such as electronic shelf tags.
Rogers said Amazon’s new delivery efforts haven’t eaten into its business either. In three markets where Amazon has tested its new delivery offerings, Instacart’s gross transaction value has stayed in line with its results in the rest of the US, Rogers said.
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Retailers have increased the speed of their delivery services over the last several months.
Besides Amazon, there’s Walmart. CFO John Rainey said last month that about a third of the orders that Walmart ships from stores, many of which include food, reach customers’ doors within three hours. One-fifth reach customers in 30 minutes or less.
Dollar General has struck delivery partnerships with Uber Eats and DoorDash and said its customers use same-day delivery to stock up on groceries.
Rogers said Instacart got an Amazon-inspired boost in demand for its services before, when retailers turned to the startup after Amazon acquired Whole Foods in 2017. Instacart lost its delivery contract with Whole Foods as a result of that deal, but said it grew its client roster as other supermarkets and retailers decided to start offering delivery and gig-worker shoppers.
“That was an accelerant for the overall industry, but also, our technology on both the marketplace side and on the enterprise side,” Rogers said of Amazon’s acquisition of Whole Foods.
Rogers is set to become Instacart’s CEO after OpenAI said in May that it hired Fidji Simo, who would transition out of the top job at Instacart.
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