Executive Briefing

Why Instacart matters

If Amazon is trying to build the iPhone of the grocery industry, Instacart is the Android.

Instacart grocery bag
Courtesy Instacart

This Wednesday marked the end of an era: Instacart, the online grocery shopping and delivery startup, officially stopped working with Whole Foods, almost two years after Amazon purchased the organic grocery chain. While both companies have moved on, their high-profile partnership, which launched in 2014, put Instacart on the map and led many people — including me! — to make their first online grocery purchases.

This as grocery e-commerce in the US is finally starting to pick up, representing “just 5% of the roughly $1 trillion US food and consumer-product market” — per Nielsen, via the WSJ — yet “online sales are growing 40% annually, while in-store sales have been flat for years.” Some 19% of Americans said they were online grocery shoppers last year, up from 5% in 2015, according to a survey by RBC Capital Markets.

Amazon and Walmart are aggressively building out their online grocery businesses, and racing to outdo each other with faster shipping speeds, eager to steal share from incumbents and each other. But right now, most Americans still buy most of their groceries from the grocery store. And that is where Instacart comes into play.

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Dan Frommer

Hi, I’m Dan Frommer and this is The New Consumer, a publication about how and why people spend their time and money.

I’m a longtime tech and business journalist, and I’m excited to focus my attention on how technology continues to profoundly change how things are created, experienced, bought, and sold. The New Consumer is supported entirely by your membership — join now to receive my reporting, analysis, and commentary directly in your inbox, via my twice-weekly, member-exclusive newsletter. Thanks in advance.

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