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Case Code: LDEN128
Case Length: 14 Pages 
Period: 2012-2017    
Pub Date: 2018
Teaching Note: Available
Price: Rs.400
Organization : Instacart
Industry : Grocery
Countries : US
Themes: Business Strategy/Entrepreneurship
Case Studies  
Business Strategy
Human Resource Management
IT and Systems
Leadership & Entrepreneurship

Instacart: Breaking New Ground in Online Grocery Delivery

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According to Michael Moritz, Chairman of Sequoia Capital, the Instacart business model was similar to that of many other tech start-ups. He said, “Think of it in a sort of similar manner to the way that you might think about a company like Uber, where you have a lot of independent contractors who, in this case, instead of driving cars, will attend to your grocery shopping needs.” For others, Instacart’s business looked similar to another online grocer, Webvan, which had grown rapidly during its initial days but had gone bust due to the dotcom crisis – in just 18 months. Webvan provided its users a web portal through which grocery orders could be placed. It then delivered the grocery to the doorstep of the shoppers. ...

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Instacart’s marketing strategy combined both the online and offline solutions. The main offline medium for marketing itself was word of mouth. The company depended on its users’ experience with its services and the way they spread the word about it.

Apart from Instacart’s workers, its grocery partners promoted their relationship with Instacart through social networking sites like Pinterest, Twitter, and many others. Instacart’s grocery partner Whole Foods Market, Inc ..


At Instacart, Mehta believed that conventional wisdom and strategies that had worked for successful companies could be skipped, and wanted his entire team to be innovative and respond to challenges creatively. With this vision, the company attracted many investors ready to invest in the startup. As a result, it received funding from a number of investors.


Despite Instacart experiencing initial years of rapid growth and investment, many analysts were skeptical about its future prospects. Many believed that the grocery delivery service might be headed for rough times due to the numerous challenges it was facing...


The increasing number of players and competition pointed to the fact that the online grocery industry had vast potential to be captured. According to a report released by the Food Marketing Institute and Nielsen, online grocery shopping was expected to grow five-fold in a span of 10 years from 2017 (See Exhibit X). Further, American consumers spending could grow US$100 billion on food-at-home items by 2025. ..


Exhibit I: How Instacart Works?
Exhibit II: Revenue Streams of Instacart
Exhibit III: Instacart Twitter Page
Exhibit IV: Funding Rounds at Instacart
Exhibit V: The New Check out Option on Instacart app
Exhibit VI: Online Grocery Delivery Price Comparison
Exhibit VII: Share of Grocery Delivery Sales (Jan 2016-October 2016)
Exhibit VIII: Top Cities by Revenue for Select Grocery Delivery Services
Exhibit IX: Percentage of Americans Purchasing Different Goods Online
Exhibit X: US Digital Grocery Sales, 2013-2022