Is Instacart dead?
2020 was incredible for Instacart, proving itself to be an essential grocery delivery service. Unfortunately, it didn't build on that success but regressed back into making decisions like a struggling startup.
Many people chose Instacart in 2020 because it was the perfect choice for the times. People were able to stay at home and follow guidelines while still being supplied with essential grocery items and beyond.
As an Instacart Shopper, I felt like I was part of something special. I met many incredible customers who would have otherwise struggled to get their groceries as they were homebound during that time. Instacart experienced an incredible surge in customers in March/April of 2020 and while there were some growing pains, overall the company managed to respond to the surge by improving the app and Shopper support.
However as the year progressed, Instacart failed to build on its success by developing a long-term strategy that would take into account the lessons learned and input from its loyal customers and Shoppers.
Instead of becoming a trusted household company, many customers breathed a sigh of relief once restrictions lifted and they were able to go back to the store themselves.
Customers no longer had to rely on revolving untrained shoppers to do their shopping for them. That's unfortunate feedback for a company that like many companies, depends on their customers ordering groceries.
Instacart doesn't seem to mind though, it seems to have changed its course from delivery service to market influencer. Instead of perfecting food delivery by investing in training for its shoppers and offering decent base pay, it's dabbling in more lucrative ventures while still dominating the grocery delivery industry.
The company is hiring policy marketing specialists left and right while the bottom remains the same mess of untrained shoppers and unhappy customers.
Don't get me wrong, I love Instacart as a concept but as a former process improvement specialist in corporate America, Instacart's business practices leave much to be desired.
The company recently acquired Caper AI, a smart cart and instant checkout startup, which you can read about here.
Let's look at some of the issues that keep Instacart from becoming the uncontested grocery delivery service.
Groceries are not its thing
Yes that one is a bit of a shocker but Instacart has no interest in being the #1 grocery delivery service. Well, maybe it's interested in being the #1 grocery delivery service but it's certainly not interested in being the best.
Instead of providing even a minimal amount of training to Shoppers, the company aims to get into as many retailers as possible including Bed Bath and Beyond and H&M (umm, really guys?) rather than spending any effort in training or retaining shoppers. A daily turnover in workforce is not exactly the best business practice.
In other words, Instacart chooses short-term profit over long-term customer loyalty. As I said before, many customers were relieved to get back into the store rather than relying on Instacart. That's not exactly a company that delights its customers.
It thinks of itself as a food delivery service
Instacart has long been grouped with DoorDash, UberEats and Grubhub. Yes it’s a food delivery service but the shopping part requires skills. It’s really a whole different service but the company doesn’t act like it.
DoorDash, UberEats and Grubhub are also in retailers (I guess it's big money) but their main claim to fame (or perhaps infamy) is restaurant food delivery.
I know that's also not the smoothest experience for many delivery drivers and customers but for the most part, it works. I will say that UberEats seems like it started out as an afterthought to Uber but has really grabbed quite a bit of the market share. But that's for another time.
Instacart's main game is grocery shopping and delivery, therefore retailers that already offer curbside pickup and shipping should be an afterthought at best and the company's main focus should again, be grocery delivery.
Customers get different shoppers all the time
Again, not only does Instacart's shopper-base essentially turn over daily, there is also no consistency with how customers and shoppers are matched.
With all the tracking capabilities and overall, a very solid app, you’d think Instacart would have listened to its customers and actually created an algorithm to match an established five-star shopper who is looking for an order with an established long-term customer instead of it being a gamble each and every time.
Perhaps standardizing the process of how shoppers access orders could also be improved.
Every day is a random gamble and sometimes I have to wait an hour just to get an order. I know they're out there but Instacart doesn't care that I've shopped over 1,000 orders with an average 5-star rating consistently. It also doesn't care about its loyal customers who have ordered hundreds of times and tip $20+ on average.
Nope, no loyalty whatsoever. On Instacart, you get what you get, which in today's world where everything is based on algorithms, that's kind of nutty.
I can't tell you how many customers have asked me if there is something they could do to have me shop every time. There isn't. It's random each time. You could get an experience shopper or someone on their first order. It's crazy. The amount you tip doesn't matter nor does the amount of orders you've placed.
I had customers who said they wished there were a more premium service that allowed them to choose shoppers like me. I think that’s a great idea. I also think this is the main reason why Instacart will become obsolete unless it gets serious about improving its grocery game.
Why wouldn’t customers be rewarded for being loyal to Instacart and why would established 5-star shoppers have to compete with shoppers on their first day every time they go out? It doesn't work for the customer or the shopper.
Instacart's pay is atrocious
We've established that Instacart's only two reason for existing (customers and shoppers) are not even near the top of its priority, even more on that later.
Shoppers' base pay is also atrocious and customers are not required to tip.
Yep, Instacart will allow a person to order 100+ items without tipping. And no, the company does not make up for the lack of tip by offering higher base pay.
See my guide to tipping your Instacart Shopper, here.
A Shopper might get $18 in base pay for such an order, which would take about 2+ hours to complete so you do the math. Unfortunately, Shoppers take orders like that, which allows Instacart and its customers to get away with such low pay.
I've had higher tipping orders on DoorDash, UberEats and Grubhub, which only require me to pop into a restaurant and deliver the order to the customer. Why would I do Instacart when I can get $20 for DoorDash order that will take me 15 minutes to complete?
Many orders on Instacart are only around $15-20 on average but take over an hour to complete. Even for a fast shopper like me, there is no reason to go through the grocery shopping process when I can make twice as much money on DoorDash, etc.
As discuss, Instacart does not reward its high-tipping, long-term customers with good Shoppers but instead might send a $100 order to someone completely inexperienced. How frustrating is that?
Instacart prefers to refund a customer for damaged items rather than investing some time and effort in training its shoppers on what good produce and packaging looks like.
Customer and shopper feedback is not taken into consideration
In 2020, I met countless customers who provided feedback to Instacart on what could be improved. I met fellow five-star Shoppers who provided feedback for improvement. Instead of listening to the ground crew, Instacart's Silicon Valley crew decided to disregard that helpful and free info in favor of making some quick money by getting into as many random non-grocery retailers as possible and getting more and more into policy and technology.
Yes, instead of taking all the lessons learned from 2020, countless free feedback from grocery customers and Shoppers and striving to become the uncontested grocery delivery service, the company has other priorities.
If there’s anything we learned from 2020, it is that groceries are essential, shirts made oversees in questionable conditions are not. Yea, I said it.
Many people still rely on Instacart for their groceries and many of those customers are willing to put up with Instacart's shenanigans because they value the time it frees up for them or they need the service if they're homebound.
I've met a few homebound people during my time as Shopper who weren't happy with Instacart but relied on it and would not be able to get groceries as reliably otherwise.
That's my whole point, Instacart is a great concept with great technology but it has lost sight of its most important assets and we may soon see newcomers cover what Instacart can't. Only time will tell.
I want to make it clear that I too love the concept of Instacart. However, as a long-term five-star Shopper on Instacart with a background in corporate American, it pains me to see the obvious decline of the company because of bad decision making, but unless the company reinvents itself, it cannot possibly sustain itself.
At least not as the most valued grocery delivery service.
What are your thoughts on Instacart as a long-term customer or Shopper?