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Why Instacart is Crucial for Grocery and CPG Brands

January 11, 2022
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  • Instacart accounts for 1 in 5 US grocery e-commerce sales
  • Understanding and adopting Instacart in your strategy will be crucial for grocery and CPG brands
  • Instacart has many advantages and long-term potential over competing options

The 2020 global pandemic permanently changed the game for grocery retailers and CPG brands. As consumers stayed at home, online grocery sales grew 54% in 2020, reaching $95.82 billion in total sales. Ultimately, online grocery earned a 12% share of total US e-commerce sales as a result.  In response, Instacart quickly became a popular delivery and pickup app among both brands and shoppers and has experienced huge growth since the pandemic began. According to eMarketer, Instacart accounts for 1 in 5 US grocery e-commerce sales. 

While the pandemic is ever-present two years later, many consumers are now all about convenience and safety more than ever. Curbside pickup, grocery delivery, and shopping for groceries online are now the norm for many, and these types of shifts in consumer behavior can’t be ignored by brands. Understanding and adopting Instacart in your strategy will be crucial for grocery and CPG brands, and we’re sharing strategic insight on how to succeed on the app. 

The Advantages of Instacart 

There are many online grocery options available, andInstacart has become a household name. Not only is it widely accessible to shoppers, but it also has many advantages and long-term potential over competing options for brands and advertisers. 

For example, many Code3 clients that planned to leverage Amazon Fresh have run into location limitations due to its fulfillment center network. Due to the limited Fresh distribution centers, the service is only available in select cities in the US. Walmart, on the other hand, uses its stores as fulfillment centers, but the product selection is limited to what’s sold in stores. 

These roadblocks are less likely and much less frequent for brands and advertisers on Instacart. The app taps into over 300 retailers and tens of thousands of local grocery stores across the country. Each store acts as a fulfillment center, which subsequently offers a nearly unlimited product selection. Instacart is able to reach most of the US, and meet consumers’ needs each shopping trip. 

The Value of an Instacart Shopping Cart 

For brands, it’s critical to understand how Instacart operates and what to consider before forming your strategy. What’s most important for brands to note is how Instacart helps shoppers build a virtual shopping cart. The app keeps their cart on record for their next visit, so when returning shoppers open the app, they’re given the option to automatically fill their new cart based on past orders. This is efficient for its users and helps brands keep their products top of mind encouraging repeat purchases. 

The sooner a brand can earn a spot in a user's shopping cart, the longer they can keep them as a customer and earn sales over competitors. On the other hand, brands who aren’t getting into carts are missing out on this opportunity. And the longer a brand waits to lean into Instcart, the harder it is to make it into the carts of already established consumers. 

Advertising on Instcart 

As the platform continues to grow, the best way for brands to make an impact is through advertising. New features have been added throughout 2021, and we’re anticipating even more opportunities for brands to control their presence within the app in 2022. If you’re new to Instcart, check out our guides on Advertising on Instcart: The Basics and Best Practices

As more brands realize the value in the app, advertising on the platform will become more crowded and competitive. Early adopters of the app and its advertising capabilities will have more opportunities for success, so it’s critical to not only establish your brand on the app, but also to begin advertising. 

Instacart, and the unique way it caters to shoppers, is something we will see more of in the future. Convenience commerce is something brands cannot delay any longer. If you could use the support of a strategic partner, contact us today. As always, we’re here to answer any questions about Instacart and other marketplaces. 

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