Online Grocery — The Big Picture

In our Beyond the Basics series, we dive a little deeper into some of the recurring themes that have surfaced in our conversations with brands and advertisers. Each article in the series examines a particular discussion point our brand partners have found interesting.

In this article we step back from the low-level, detailed view of bids and metrics to take a look at the big picture of online grocery shopping, where it’s projected to go, and what that means for brands and advertisers today.

This is not to say that conversations around unit economics, sales incrementality, ROAS, and other metrics do not have their place. Brands have concerns rooted in the day-to-day of their business, growing category share, and retaining consumers, so conversations around them are operationally important.

But when we keep our attention focused on the bottom-line, we can get distracted with low-altitude concerns.At this stage in the life of both Instacart Ads and the transition to online grocery shopping, brands need to look upwards to the top of the balance sheet and the big picture.

So what is the big picture?
To see the big picture we need the right context. Brands need to see their performance on Instacart not just in today’s dollars but also as a stake in the ground — claiming an early movers advantage in a fast growing market. Because what has value today, and how you measure that value, differs drastically when you factor in the potential — and likelihood — of future growth.

So for advertisers looking to grow their brands, their advertising investments should be placed in context with the project growth of online grocery, Instacart’s recent and continued rise in usage, and shifting consumer norms and sentiment.

On the growth of online grocery shopping, recent projections point to over $100 billion in sales in 2021, making up 12.4% of US ecommerce. Other projections see online grocery making up 21.5% of US grocery sales in less than 5 years.

And Instacart is well positioned to capture this growth. Progressive Grocer recently wrote,“Instacart is positioning itself to dominate the $1 trillion online grocery market” while surveys of Instacart users show most see us as an essential service and are likely to keep using Instacart in the future.

This is the big picture, then. A large wave of consumer behavior is swelling and breaking over grocery. At Instacart we see this trend quite clearly. Which is why we advocate that brands look to their top-line sales and avoid a narrow focus on specific, tactical cost calculations.

Brands cannot predict the future, but need to leverage the right information to stay ahead of the curve. There’s a push/pull of risk tolerance. In an industry where high single-digit growth is a win, the prospect of much larger growth in online grocery and shifting currents of consumer behavior changes the way brands need to think.

We believe leaning into consumer obsession is the key to success. Businesses that obsess over delighting consumers will win. And when they do, all of the trailing economic questions about share and profitability will fall into place over time.

The undeniable truth is that consumers are more comfortable than they have ever been shopping for groceries online. Every day thousands of consumers are shopping for groceries online for the first time — and more of them do it on Instacart than anywhere else.

Brands need to focus on this growth above driving decisions based on answers to their low altitude questions. Imagine what the future looks like a year or two from now. What does it look like for the brands who embraced this change?

Win on Instacart and you’re winning online grocery. If you’re winning online grocery, you’re winning the fastest growing space and biggest paradigm shift the grocery industry has experienced since the advent of the supermarket.

Give us a call to get started.

Advertise with us to get in front of consumers when they’re searching for products like yours on the Instacart Marketplace. For more information and to get started, visit ads.instacart.com.

Instacart

Instacart is the leading grocery technology company in North America, partnering with more than 1,400 national, regional, and local retail banners to deliver from more than 80,000 stores across more than 14,000 cities in North America. To read more Instacart posts, you can browse the company blog or search by keyword using the search bar at the top of the page.