The opportunity: Instacart noted in its release that customers who buy prepared foods and catering items “have significantly larger baskets and shop more frequently than those who do not.” Retailers also generally get more profit from selling these items than “traditional groceries.”
- As a result, Instacart’s “Ready Meals” service not only enables the company to appeal to a highly lucrative audience, but it also gives retailers the opportunity to upsell existing consumers, thus making it advantageous for grocers to remain on the platform.
The big takeaway: While the company has not yet made definite plans for an IPO date, its recent actions reveal a company attempting to prove long-term worth to investors by finding new revenue streams and thwarting would-be competitors.
- By taking a first step into prepared food delivery, Instacart is signaling that while its loyalty remains to grocery for now, it can easily move into restaurant delivery—and perhaps beyond.