How brands are reaching more customers through same-day delivery
Pandemic aside, the demand for online shopping is steadily growing thanks in part to the convenience and relatively quick speed between adding an item to your cart and getting a delivery notification.
Smaller businesses, in particular, are looking for ways to compete with stores like Amazon, Walmart, and Target (or insert any other mass retailer here).
Some might argue the only way to survive against these big retailers is to beat them at their own game.
What can you do to make the choice for customers even easier (and help them in the quest to shop smaller)?
Provide even more convenience.
How is this done? Enter: Instacart.
Incorporating same-day delivery services into a brand strategy might be worth looking into if you want to go a step further with the convenience factor.
Here’s the thing though: brands have access to the Instacart network only if products are being sold within a physical retail space.
Turning lemons into lemonade
It hasn’t always been sunshine and roses for Instacart. As recently as 2019, the platform was losing upwards of $25 million every month.
Then, the pandemic happened.
Fast forward to the spring of 2020 and the demand for Instacart was so high it allowed the platform to have its first profitable month.
The data looks good, too:
- Instacart has approximately 9.6 million users who actively use the platform. The company also employs half a million shoppers.
- In 2019, active users hit around the 5.5 million mark – almost doubling in growth from one year to the next.
- The same could be said for the number of brands who sell through Instacart. In 2019 there were 300 partners, in 2020 it doubled to 600.
If you’ve not used Instacart and are curious how it works, it’s a fairly simple concept. Basically users shop for what they want via the platform and a shopper, employed through Instacart, heads to the store to grab requested items and then delivers them within the same day (usually a two hours from ordering).
This differs from other delivery services, like Amazon Fresh for example, because Instacart shoppers are local to the user and shop area grocery stores, box retail stores, and warehouse clubs. If your product is on shelves, there’s an opportunity for Instacart shoppers to add it to their basket.
Traditionally, most customers have used Instacart to pick up forgotten items off the grocery list or just to make life easier. But with new partnerships ranging from Sephora to The Container Store, the possibilities are endless for what customers can shop for at any given time.
Why go out shopping when you can enlist the help of someone else (with a fee, of course) to do it for you?
Instacart – not just for groceries
This seems like a no-brainer: demand for Instacart and related grocery delivery services grew exponentially during the pandemic.
With more people working and staying at home, consumers want to stockpile snacks, beverages, and fresh goods. Thanks to the vast selection of products available through Instacart, shoppers aren’t just limited to grocery items.
One of the latest brands to partner with Instacart? The Container Store.
Brands featured inside local retailers have an advantage over purely ecomm or DTC brands because a customer will see and select brand products from the list of area stores and have it delivered within a couple of hours.
Even as the collective community gets back out there, ecomm brands – especially in the personal care space – are seeing the demand for products grow monthly. Plus, now that customers have gotten a taste for what it’s like to utilize time-saving services like Instacart, are they going to want to go back to doing things the old fashioned way? Doubtful.
Thanks to the ease of convenience of shopping online, customers are growing accustomed to getting what they want without heading out to stores or waiting days for a package to arrive.
Here’s something being talked about in the DTC and ecomm community: Once things go back to ‘normal’ will the demand for online shopping subside?
And while ecomm and DTC brands do have the ability to grow steadily, this is the perfect time for brands to figure out new ways to get products into the hands of customers. Even as more cities open up, the convenience for most customers is just too good to pass up.
Here’s what the trends show
According to the 2021 Grocery Trends Report posted by Instacart, certain categories have seen explosive growth and show no signs of slowing down. Brands specializing in food goods (and spices!) have a particularly bright future.
While most of us spent a good part of quarantine baking banana bread and enjoying all the comfort foods we could get our hands on, 2021 so far looks to serve as a balancing act. Aside from being stuck at home, it’s safe to say the art of home cooking also got a makeover.
Now, more home chefs are willing to splurge on deliciously unique species and flavor boosters, opting for indie brands over the age-old products down the spice aisle at a local Kroger’s.
So, what does that mean?
- 21% of Americans say they’ve ramped up home cooking thanks to new flavors and exotic spices. Following Instacart sales data, the demand for spices is continuing even as we start to open up and get out of the house.
Offering spices through smaller channels opens up the possibility for anyone to learn more about cuisines and ingredients. Chili crisp, in particular, has seen serious growth and demand – up to 227 percent compared to the previous year.
For brands like Fly by Jing, this has come with a variety of challenges thanks to the increased demand and attention. Between supply chain issues, funding woes, and curious brand perception as it regards to the niche markets, DTC brands have had to make a lot of changes in a short amount of time.
Snacks – especially in niche categories like keto/low carb goods – are growing in popularity, too.
On Instacart, brands selling low carb snacks saw a 72 percent increase over the previous year. Olipop, HighKey, and Magic Spoon are just some of the options that continue to attract new consumers.
Health and supplements are also moving advertising dollars over to platforms like Instacart. A supplement brand known for its assortment of gummy vitamins, Olly is one of many brands looking to shift budgets away from traditional marketing channels and more into the shopping platforms.
Takeaway: Regardless of what the world is doing around us, consumers have gotten used to ordering what they want and having it delivered straight to their doorstep.
For brands to remain competitive, incorporating platforms like Instacart into the marketing strategy is going to be key.
How Instacart + Sephora brings beauty on demand (and what it means for brands)
Taking advantage of the delivery convenience, Sephora launched a partnership with Instacart in October 2020. For customers who didn’t just shop for groceries, this new connection caught a lot of attention.
The beauty company shared the news and touted benefits for customers. A big one was the option to access same-day delivery on any of Sephora’s products – ranging from cosmetics to wellness, without paying a price difference between in-store or through online purchasing.
An advantage to Instacart is that it covers a few pain points that customers typically experience. Why would someone be interested in a Sephora partnership?
- Don’t want to leave the house? You don’t have to.
- Run out of a product? No worries. New products will arrive within one or two hours.
- Forget a gift for that last minute event? Crisis averted.
- Did a new product drop and you want it? Same-day delivery to the rescue.
How many of these pain points do your customers face through daily shopping habits? Probably all of them, which is why incorporating a same-day delivery service puts you above the competition.
Breaking barriers and boosting ROI
Moving forward, what does this type of setup mean for your brand and is it worth considering? Some questions to look at are things like this:
- What customers are buying online
- Customer journey – barriers and drivers they face
- Offline to online influences
Here’s the thing: your customers are already shopping online. As popular as ecomm and shopping online is (and continues to be), there’s still plenty of room to grow and disrupt the space.
With the disruption, brands have an opportunity to look for new ways to serve customers and create entry points.
Will people always like to shop in-store? Perhaps. But there are always those instances when one does NOT want to go out and that’s where you step in.
Here are some questions to consider when mapping out a brand strategy:
Would my customers use a same-day delivery service, such as Instacart?
Online shoppers aren’t just millennials or Gen Z, either. Most everyone has access to platforms like Instacart, so using them is becoming fairly common.
Shoppers span across countless demographics, from younger age groups to elders, parents to professionals, and beyond.
Regardless of what type of product you sell, chances are there’s plenty of customers who would be willing to bypass a trip to the store and order it for delivery.
What if my brand is sold in a smaller market?
That works, too!
Instacart, for example, is used in countless major cities and urban areas – but don’t disregard it if you’re in a limited region. Smaller cities have these services as well and as the demand grows, so too will the availability.
For now, shoppers in cities and towns like Austin, Boulder, even Millsboro, Delaware can take advantage of the convenience provided by delivery services like Instacart.
Take note: Danny Silverman, CMO at Clavis Insight, says that in the United States consumers are increasingly more accepting of pickup and delivery services. Creating the ability to get items into the hands of customers (while highlighting convenience) is one of the driving factors into the expansion of these types of programs.
The future of delivery
Using delivery services like Instacart has proven beneficial to grocers and retailers and, in some cases, even the largest retail stores are combining their own delivery services with that of Instacart in order to meet demand and accommodate buying behavior of their customers.
Because of the success Instacart had with grocery stores, partnerships have expanded with non-grocery stores, too. There’s the aforementioned Sephora, as well as Dick’s Sporting Goods, Family Dollar, and Best Buy.
Here are some of the benefits of partnering with platforms like Instacart:
- Instacart has helped elevate brands and retailers into the ecomm space. Increased product visibility and digital access for a growing online audience has the potential to help brands reach even more customers.
- Partnering allows brands to tap into Instacart’s large market. This broadens reach and potential sales for brands of all sizes. Using the platform’s advertising service also provides brands valuable sales and consumer data.
- Expansion of Instacart’s users and projected growth is a plus. Brands partnering with the platform can use the benefits already available and with the continued growth, it makes sense that even more features will be introduced to customers and brand over time.
Of course, there are a few challenges that come with partnering with Instacart.
Brands are mostly hands-off as it relates to the customer’s shopping experience. As it works now, shoppers head into stores and grab what the customer requests.
There’s little room for brands to make a connection with customers and at a time when shoppers say that personalization and experience are important, this could be a significant hurdle for certain brand categories.
Remember that sales data and valuable customer insight? Well, unless a brand signs up for the advertising service with Instacart, that information is not accessible. Another point to consider is the commission fee, which is taken out of each transaction.
For brands that do well with Instacart and sell larger quantities of goods, that commission fee adds up and chips away at the overall profits. If profit margins are already narrow, this could be a deal-breaker.
Are there pros and cons to weigh when it comes to partnering with Instacart? Of course.
Here’s something to consider: To stand out, visibility is KEY. Depending on the goals and growth of your brand, partnering with a delivery service like Instacart could prove to be a profitable addition to your growth strategy.