I think it's pretty obvious that Instacart's exit strategy is to make some great technology that either Amazon or Google will buy-out.
There is no way they will survive as a company long-term trying to compete against either of those two. It's a low-margin business with expensive, labor-intensive components that won't scale efficiently over time. They just need enough money to last long enough to convince Amazon or Google to buy them at a premium so that the investors make their 10x.
"I think it's pretty obvious that Instacart's exit strategy is to make some great technology that either Amazon or Google will buy-out."
I think they will make a play to open up their shop and delivery service via API to eventually allow stores to use them as a full end-to-end delivery service and sales channel.
The other play is to do what DoorDash is doing with focusing on the core logistics/driver infrastructure and route/scheduling optimization software. Doordash is generic enough to go beyond restaurant delivery and become an open alternative to last-mile courier services in the market today. It's basically Uber cargo but I think they could do so much more by making it an open service that any business could use to handle on-demand delivery to their end users. If Trader Joes wants to provide delivery, they just need to be able to ping DoorDash with an address and have a box ready when a driver arrives. This offloads the liability and capital costs associated with having your own drivers and delivery trucks, etc.
My reason is simple. I use Instacart frequently. When I first evaluated Google Shopping Express, it didn't seem possible to buy basic perishables such as milk and orange juice (and I don't mean the canned kind that sits on shelves at room temperature). That's pretty much a killer if I can't buy fresh milk and orange juice.
Not everyone is driven by price. Sometimes convenience trumps price. I use the delivery services so I don't have to waste an hour at Staples to buy one item.
The only way I can see this as profitable is at a huge markup or they start stocking items themselves just like a grocery store does. I think people care less about what grocery stores the shopper goes to than getting the correct items. They should just have a food warehouse and stock stuff.
Comments
Why Instacart over Amazon Fresh or Google Shopping Express?
I saw their product when it first launched but I didn't see a distinct advantage.
I think it's pretty obvious that Instacart's exit strategy is to make some great technology that either Amazon or Google will buy-out.
There is no way they will survive as a company long-term trying to compete against either of those two. It's a low-margin business with expensive, labor-intensive components that won't scale efficiently over time. They just need enough money to last long enough to convince Amazon or Google to buy them at a premium so that the investors make their 10x.
"I think it's pretty obvious that Instacart's exit strategy is to make some great technology that either Amazon or Google will buy-out."
I think they will make a play to open up their shop and delivery service via API to eventually allow stores to use them as a full end-to-end delivery service and sales channel.
The other play is to do what DoorDash is doing with focusing on the core logistics/driver infrastructure and route/scheduling optimization software. Doordash is generic enough to go beyond restaurant delivery and become an open alternative to last-mile courier services in the market today. It's basically Uber cargo but I think they could do so much more by making it an open service that any business could use to handle on-demand delivery to their end users. If Trader Joes wants to provide delivery, they just need to be able to ping DoorDash with an address and have a box ready when a driver arrives. This offloads the liability and capital costs associated with having your own drivers and delivery trucks, etc.
That's not our exit strategy. We're building a long term business here.
Not the best strategy in my opinion.
My reason is simple. I use Instacart frequently. When I first evaluated Google Shopping Express, it didn't seem possible to buy basic perishables such as milk and orange juice (and I don't mean the canned kind that sits on shelves at room temperature). That's pretty much a killer if I can't buy fresh milk and orange juice.
And then when they offer those products at lower prices?...lol
Not everyone is driven by price. Sometimes convenience trumps price. I use the delivery services so I don't have to waste an hour at Staples to buy one item.
Faster delivery
Bigger selection
Speak directly with your shopper
The only way I can see this as profitable is at a huge markup or they start stocking items themselves just like a grocery store does. I think people care less about what grocery stores the shopper goes to than getting the correct items. They should just have a food warehouse and stock stuff.