Instacart announced Connected Stores Monday, a suite of new and existing in-store technology for retailers looking to make their supermarkets smart.
The features that US and Canadian retailers can implement à la carte are based on the idea of making the physical shopping experience seamless, faster and more personal. They include a new version of AI-powered Caper Carts, the ability to sync Instacart shopping lists with the smart carts, electronic shelf tabs (called Carrot Tags), scanning and payment, department-specific orders, and out-of-stock insights.
“These are technologies that solve real consumer problems that we all face,” said CEO Fidji Simo londonbusinessblog.com. “People don’t like to queue at the checkout. People like to have more information about the products they want. People want to find these products very quickly, as if all these things are solving real pain points that can be addressed with technology.”
The company is poised to open its first fully connected store with Good Food Holdings’ later this year. Bristol Farms store in Irvine, California. The Wakefern Food Corp. offices. and Schnucks will also be rolling out Caper Carts and Carrot Tags in the coming months, respectively.
Instacart executives say that because the technology can be purchased separately and the integrations support existing hardware solutions, retailers don’t have to spend millions of dollars customizing their stores. “The way we build all of these technologies is to avoid having to make a big investment for retailers,” Simo says. Nevertheless, she says that the investments in the pilots have paid off. “We see that when people use these technologies, they tend to spend more,” Simo adds.
Monday’s announcement builds on that of the company 2021 acquisition self-checkout shopping cart maker Caper AI for $350 million. The smart cart has been tested in a handful of stores in the US, but the latest version is lighter, slimmer and contains 65% more than the previous version.
The Caper Cart has the same shape as a regular shopping cart, but is equipped with a touchscreen, scale and sensors so that shoppers do not have to scan items manually. Users can easily place items in the shopping cart and pay directly from the connected tablet. Retailers can stack the carts and use a single plug to charge them all, rather than plugging in each individual unit.
Instacart is also introducing Lists, which allow users to connect their shopping list from the Instacart app or the grocer’s dedicated Instacart-powered app to a Caper Cart. The list will then appear on the cart tablet and shoppers can check them off as they place items in the cart.
For retailers who may not want to implement new carts, the company is enabling something called Scan & Pay. The offer lets users scan items as they shop and pay for them using their mobile phone, so they don’t have to wait in line. In addition, the company offers a tool which allows shoppers from multiple departments (such as deli, bakery, etc.) to order simultaneously, so that a person can request items from different stores in the store and have them ready at the same time.
The digital shelf tabs, called Carrot Tags, help users find items by flashing a light when a shopper needs help locating goods. The tags display information such as whether it’s gluten-free or kosher, and include QR codes so people can scan and learn more about the item. Retailers also have access to Instacart’s sold-out insights, which would mean stores miss out on fewer sales.
“[The technology] frees up labor to do the kinds of things that retailers really want to prioritize in-store, such as better customer service and stocking shelves so that products are always available to consumers, which is incredibly important in a very tight job market.” says Simon.
Simo makes it clear that the company’s intention is not to launch its own supermarket. “The goal of this strategy is rooted in empowering retailers, we will not be a retailer ourselves,” she says. “Our job is to build these technologies to make them stronger.”
Although it started as a gig platform for users to get groceries delivered to their homes, Instacart has since started offering software services to retailers. Below the Instacart Platform Umbrella (which now includes Connected Stores), the company provides software management for things like advertising, e-commerce, insights and other data for supermarkets. By moving beyond the gig-work model, which has traditionally been a tough place to make money, the company can likely create a greater revenue stream.
The latest offerings come as the company prepares for its market debut. Instacart confidentially submitted an initial public offering in May and is Reportedly is expected to hit the market before the end of the year. Instacart was one of the pandemic darlings, with the company seeing a sales boost when people stopped shopping in person and shopping online.
That momentum has apparently continued as restrictions eased. The company reached its highest-ever quarterly revenue in the second quarter of 2022, up 39% year-over-year to $621 million, according to the company. Wall Street Journal, who also reported that the number of orders placed through Instacart is up 25% from the same period a year ago to more than 60 million.