Today Instacart, a popular Bay Area grocery delivery service, released its “Express” service option to the general public. Express, which is akin to Amazon’s Prime, charges a flat yearly fee of $99, which gives customers free deliveries with minor restrictions. Express had been in a lengthy beta to ensure that its economics worked for Instacart itself.
According to Apoorva Mehta, Instacart’s CEO, members of Amazon Prime, which also offers free delivery for an annual price, order 150 percent more than Amazon members who are not Prime participants. Instacart, obviously, wishes to replicate that uptick in its per-user purchase rate.
In testing, Express members ordered from Instacart, again according to Mehta, two or three times weekly. The caveat to the Express deal is that delivery is only free on orders over $35. Below that price threshold, Express customers will pay the normal price for delivery: $7.99.
Non-Express members pay a reduced cost after their order nears the $35 mark. Express has a two-week free trial if you want to give it a spin.
Instacart is a company that has experienced quick growth in its selected markets, but slow geographic expansion. Mehta, in a call with TechCrunch, stated that simply tacking on new cities to his company’s service doesn’t, in a sense, prove much; that’s just hiring. Instead, the company appears heads down on honing its business model and, perhaps most importantly, unit economics.
Grocery delivery companies have a brilliant track record of very public failure. Instacart appears cognizant of that fact. However, its period of incubation is coming to something of a close. In a press release today, the company claims that it will expand to “10 major cities” in 2014.
It is an open question whether Instacart’s model, so popular here in the Bay Area, will translate to other, perhaps less ridiculous markets. The recent explosion of Do It For You companies has prompted some ridicule, as we increasingly farm out everything from love, to cleanliness, and now trips to Trader Joe’s. There is perhaps a coming Peak Lazy, but we haven’t reached it yet. Instacart told TechCrunch that its revenue is currently growing 35 percent monthly.
Ironically, I have begun using Instacart in certain situations where before I would have used Prime. If I’m having people over for dinner, say, and need certain ingredients, I might also toss mouthwash and paper towels into the order as well if I am low. I’m not sure if this makes me a burning cliche or simply banal. Perhaps both.
Top Image Credit: lord enfield