- Although it will likely lose Whole Foods, one of its largest clients and investors, ecommerce provider Instacart has gained significant business in recent months, according to Geekwire. The company operates in 105 markets after adding 80 this year — more than double the growth projected by the company .
- In fact, Geekwire notes, it appears Amazon's acquisition of Whole Foods boosted Instacart's business as grocery retailers scramble to update their online shopping services in the wake of the deal.
- Instacart has set a goal of reaching 80% of US households by 2018. An Instacart spokeswoman told Geekwire the company is well on its way towards meeting that goal.
Shortly after Amazon announced its $13.7 billion bid for Whole Foods, Instacart CEO Apoorva Mehta put out a statement.
"From the beginning, we’ve been committed to helping grocers compete online. That’s more important than ever given Amazon just declared war on every supermarket and corner store in America," he wrote. "We already work with over 160 retailers across the country and look forward to partnering with many more."
At the time, industry observers wrote off Mehta’s defense, noting that the assumed loss of one of its largest investors and retailer clients coupled with Amazon’s future growth would deal a devastating blow to the popular service provider.
This could still happen, of course, but for now Mehta’s comment is looking eerily on target. Since Amazon’s announcement, numerous grocers, including leading names like Publix, Wegmans and Aldi, have signed on with Instacart. Spooked by the competitive threat Amazon poses with an arsenal of 460 stores at its disposal, they're racing into the online shopping space.
Retailers have numerous options when it comes to expanding online shopping capabilities, including building out their own ecommerce platforms. But grocers are increasingly showing their willingness to outsource online shopping and delivery to third-party sources. Amazon’s impending acquisition may work in Instacart’s favor, as retailers may feel they don't have time to develop their own systems. Instacart’s market-leading scale and experience may also be proving attractive to grocery operators.
Despite its recent growth, though, Instacart will need to continue to grow and innovate. Many grocers are still in the early stages of partnering with the company, and long-term viability remains a question mark. And while it hasn't had much of an impact yet, Amazon may yet disrupt Instacart’s operations once the e-commerce company takes the reins at Whole Foods.
Instacart's will also need to address lingering issues, like finding and holding on to shift workers. As grocery e-commerce grows, there are also questions surrounding retailers' use of their stores as fulfillment centers.