How to build on and running grocery delivery app like Instacart

Instacart grocery delivery app: As the pandemic broke out, governments were forced to impose lockdowns. With nowhere to go, online stores became the essential service providers overnight. They have experienced an unprecedented surge in customer demand in various sectors but mainly for grocery delivery services.

Most of the consumers are opting for online shopping considering the situation we are dealing with these days.

And this has opened new opportunities for online retailers to expand their businesses. While the traditional brick-and-mortar owners are being victims of huge losses in their businesses.

The pandemic has resulted in an unexpected rise in demand for contactless deliveries. In an attempt to follow the new protocols, millions of consumers are relying on grocery delivery services.

Online grocery shopping fueled its e-commerce growth during and post-pandemic. It is the primary example that has witnessed a drastic surge in its users during the pandemic.

Instacart- an Online Grocery Delivery Service Provider – Instacart grocery delivery app

It is the largest, most widely reached grocery delivery service provider across the US. Previously, it only offered same-day grocery delivery, but with the increase in demand, Instacart decided to roll out its ‘Leave at My Door Delivery’ option.

And this feature is applicable to all customers- bringing even more flexibility and optionality to their grocery delivery experience for their potential users.

You might be wondering about this new feature to their services. Well, let’s clear the air, shall we?

Customers who choose ‘Leave at My Door Delivery’ during the checkout process online. They’ll not hear a doorbell or get a knock on their door. Instead, they will receive a real-time photo of their placed purchase on their doorstep.

  • According to the sources, the profit margins of the company rose at an unusual rate when the deadly virus broke out and the online demand for groceries surged.
  • This grocery giant hired 3,00,000 additional employees and plans to hire 2,50,000 more as it sees strong sales and copes with workforce challenges.

Instacart is setting a high standard for budding businesses to ace in this field. And most Entrepreneurs are looking forward to launching an astounding business or a delivery app like Instacart.

To get a better picture, let’s take a deeper look at Instacart’s customer retention strategies by an overview of its business model and revenue model.

Let’s learn more about how Instacart has succeeded in planning the right business model.

The Unique Selling Point (USP) of Instacart is to deliver grocery products to the consumers’ doorstep as soon as possible.

The business model Instacart follows is a 3 tier customer strategy. Basically, the company acts as a host and the contractors are responsible for managing inventory and making goods ready for delivery.

This unique “no-inventory” strategy was a result of the lessons that the company learned from the downfall of its competitors. This 3 tier plan focuses on bridging the gap between consumers and contractors who are responsible for delivering goods on time.

Now that we have discussed the business model that Insatcart follows.

Let us give a glance at the order economics of the giant by enlisting the revenue streams.

Delivery Fee

Apart from the first order, Instacart charges a delivery price from customers for every order placed. The starting amount can be $5.99 if the order is to be delivered within 2 hours of time.

The delivery fee for requesting in an hour is $7.99. This usually varies depending on how swift the consumer wants the goods to be delivered.

Partner Payments 

Many small and medium-sized enterprises have partnered with Instacart to collaborate its services on the grocery delivery platform for better customer reach. Instacart gains profits by charging fees per order and partnership commissions.

Markup Fee

Instacart earns a markup fee of 20% of the net cost of the item. The prices listed by some wholesalers on Instacart are the same as their in-store prices which almost leaves less to no room for profits.

Service Fee

Instacart charges a mandatory service fee of 5% on every order placed. Also, the customers have to make a compulsory  5% tip for every delivery.

Membership Fee

Instacart provides an annual membership priced at $149, also called Instacart Express. The customers can enjoy free deliveries for orders valued above $35 all year round with the membership.

How to build on and running Instacart Grocery Delivery App

Designing and developing an Instacart grocery delivery app from scratch requires a lot of investment in terms of both time and money.

An entrepreneur has to consider key factors such as addressing the customers’ needs, analyzing the strengths and weaknesses of competitors, choosing the right technology stack, and necessary app features. And also should be able to make decisions in the hour of need.

Conclusion

In this blog, we have talked about the unique features that are empowered by Instacart. And the importance of results-driven strategies. If you ever want to take your business to the digital platform, you can always get connected with Yugasa Software Labs, which will provide you services and products with impeccable features.

Read More: DID YOU KNOW THESE AMAZING FACTS ABOUT THE HYPERLOCAL APPS?

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