Instacart is betting it can replicate the experience of scrolling on Instagram to discover the latest clothing trends, but for online grocery shopping.
Customers on the Instacart app will now be able to see curated shopping carts from celebrities, retailers, and influencers like Lizzo and The Old Gays. For instance, users will be able to view a cart of Lizzo’s favorite vegan treats on the home feed of Instacart. The goal is to get users to discover products on the grocery delivery app.
“In a sense, it’s kind of broken that the web and the internet hasn’t already been more shoppable for things that you can get immediately,” said Daniel Danker, chief product officer at Instacart.
Creators and publishers like Delish and Hearst will also now be able to create recipes inside Instacart that allow readers to purchase items within the app. Creators will receive a 3% commission on qualifying purchases made from Instacart, said the company. In the past, influencers were only able to link their Instacart shopping to the content they were publishing on TikTok. Now, rather than discovering content outside the app, it will originate from Instacart’s homepage.
The curated carts and recipe lists from influencers will create more personalized content on Instacart feeds, and that experience will enable people to discover more products on the grocery delivery app, said Danker. He added that he now opens the app to find new items like “window shopping,” though also saying he is perhaps more motivated to do so than the typical shopper. “It’s a journey that will start happening over time as people start discovering and being inspired by what they see,” said Danker.
The discovery of new items often happens on social networks like TikTok or Instagram, said Blake Droesch, a senior analyst who covers grocery e-commerce at Insider Intelligence, a market research firm. “Most people, they have an idea of something they want and then they go on Amazon and Instacart to get it,” said Droesch. “It’s not a place where they go to learn about new products like they would on social media.”
Still, there’s an opportunity for marketing in the food and beverage space that relates to creators and influencers, said Droesch. Food videos are popular on TikTok, for instance, which highlights the demand for food influencer videos.
One challenge is being able to change user’s habits, and present Instacart as more than just a place to order groceries, said Danker. “It’s actually really hard to do online what we do automatically when we shop in the real world,” he said. Unlike online grocery shopping, shopping at physical stores is an experience. But, the advantage with online shopping is that the company can push something new each time a customer opens the app, and the feeds are more personalized to show plant-based foods or pet care items, for instance. “If we can bring that joy of discovery that happens in the real world, if you will, today, and join it with a personalized experience, we’re actually able to do something very different than what has been done so far,” he said.
Affiliated marketing, where influencers earn a commission for marketing another company’s product, is part of Instacart’s big push into the multibillion dollar online advertising business. Retailers like Walmart and Kroger are also pursuing online advertising. For instance, Walmart is reportedly looking to use social media influencers to promote its goods.
Retailers are betting that this new era of digital advertising will help boost the thin margins in the grocery business. For instance, businesses can pay for display ads or ads in search results on Instacart.“Advertising overall is going to be critical to not just delivery, but also what you’re seeing with retailers,” said Brad Jashinsky, director analyst at Gartner covering digital marketing in retail.“It makes sense because it’s a challenge where these industries are so competitive and margins are so low…that being able to tap into these other revenue streams is critical.”
Instacart, which plans to go public this year, has yet to turn a consistent profit, but advertising is a way to help the company make money. In 2020, Instacart’s ad business earned $300 million in revenue, reported the Wall Street Journal; the company aimed to increase that amount to $1 billion by 2022.