INSTACART
Instacart, a leading online grocery platform, faces challenges in sustaining a viable business model against competitors like Amazon and Walmart. The company's strategy involves addressing operational, customer relationship, and market trends while focusing on customer loyalty, technology, and operational costs. To succeed, Instacart aims to expand revenue streams through technology, data analysis, and consulting services for retailers and manufacturers.
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Presentation Transcript
INSTACART INSTACART FIA CONSULTING FIA CONSULTING
OUR TEAM NATHAN MENDES NATHAN MENDES Finance MARIANA PINTO MARIANA PINTO Operations NATASHA MUNHOES NATASHA MUNHOES Strategy EZEQUIAS RODRIGUES EZEQUIAS RODRIGUES Marketing
AGENDA KEY ISSUE KEY ISSUE AND AND CHALLENGES CHALLENGES RECOMMENDATION RECOMMENDATION MARKET MARKET ANALYSIS ANALYSIS EVALUATION OF ALTERNATIVES EVALUATION OF ALTERNATIVES RISKS RISKS AND MITIGATION AND MITIGATION STRATEGY & IMPLEMENTATION STRATEGY & IMPLEMENTATION PLAN PLAN FINANCIAL FINANCIAL ANALYSIS ANALYSIS
INSTACARTS MISSION STATEMENT: TO BUILD A WORLD WHERE EVERYONE HAS ACCESS TO THE FOOD THEY LOVE AND MORE TIME TO ENJOY IT TOGETHER
INSTACARTS CURRENT CHALLENGE HOW TO MAKE A SUSTAINABLE BUSINESS MODEL IN A LONG TERM COMPETITION OPERATION CUSTOMER RELATIONSHIP TRENDS Challenging economic environment Big online players (e.g.: Amazon and Walmart) Retailers perspective on business model (e.g.: Wegmans, Food Lion, Costco Canada, etc) Lower margins for retailers Delivery fees and time for delivery Employee relationship (shoppers) Gain trust from retailers Data collection through retailers Low margins for retailers Increase of grocery e- commerce in 2020 with Covid-19 pandemic Online grocery sales decreased by 24% in H1/2021 Distinct patterns of purchasing: delivery, presential, pick-up
HOW TO BE SUCCESSFUL IN THE ONLINE GROCERY MARKET 4 3 2 1 CUSTOMER CUSTOMER LOYALTY LOYALTY LOW LOW TECHNOLOGY TECHNOLOGY SCALE SCALE OPERATIONAL OPERATIONAL COSTS COSTS Barrier to new entrants Maintainance of growth Data usage Competitive advantage Low cost High volume Higher margins STRATEGIC PILLARS FOR SUCCESS
INSTACART SHOULD EXPAND ITS SOURCE OF REVENUE WITH TECHNOLOGY AND DATA ANALYSIS WITH CONSULTING SERVICES FOR RETAILERS AND MANUFACTURERS SOURCE OF REVENUE SOURCE OF REVENUE AS IS TO BE Delivery fee Delivery fee Fee from retailers Fee from retailers Advertising Advertising Data Analysis Consulting Services
WHAT IS AROUND INSTACART Grocery delivery became a necessity Grocery delivery became a necessity Decline of pandemic in world Decline of pandemic in world Online grocery increased to 10% of the grocery industry with the pandemic A large portion of customers could return to buying their own groceries Strong competition Strong competition Value given by retailers from good service Value given by retailers from good service Amazon, Walmart and other competitors Retailers are skeptical with huge companies, as Amazon and want proximity and facility
WHAT IS INSIDE INSTACART The world's largest online grocery service' The world's largest online grocery service' External External workforce workforce Nearly 500 million products in catalogue Face issues with rebelious workers and restless partners Huge presence Huge presence The business has small margins The business has small margins More than 5,500 cities in US The margins historically averaged 2% or less
INSTACART HAS IMPORTANT COMPETITIVE ADVANTAGES THAT SUPPORT THEIR NEW BUSINESS PLAN Hard Hard to to Immitate Immitate? ? Competitive Competitive Implication Implication Capability Capability Valuable Valuable? ? Rare Rare? ? Organized Organized? ? Technology Technology and and Data Data Competitive Advantage Yes Yes Yes Yes Client Client driven mindset mindset driven Temporary competitive parity Yes No No Yes Diversified Diversified portfolio portfolio Temporary competitive parity Yes No No Yes Qualified Qualified workforce workforce Competitive Advantage Yes Yes Yes Yes Deliveries Deliveries operational operational know know- -how Temporary competitive parity Yes No No Yes how
BASED ON INSTACARTS COMPETITIVE ADVANTAGE, WE DESIGNED SOME ALTERNATIVES Expand the source Expand the source of revenue of revenue Be sold to Amazon Be sold to Amazon Be a grocery Be a grocery warehouse warehouse Expand to other Expand to other countries countries Profitability MEDIUM MEDIUM MEDIUM MEDIUM HIGH HIGH HIGH HIGH Low facility to copy MEDIUM MEDIUM LOW LOW HIGH HIGH MEDIUM MEDIUM Operational difficulty MEDIUM MEDIUM MEDIUM MEDIUM MEDIUM MEDIUM HIGH HIGH Alignment with mission MEDIUM MEDIUM HIGH HIGH HIGH HIGH LOW LOW Sustainability in the long-term LOW LOW LOW LOW HIGH HIGH LOW LOW
GIVEN THE DYNAMIC SCENARIO, WHAT ARE THE RISKS AND HOW INSTACAR CAN MITIGATE THEM Potential risks Potential risks Risks mitigation Risks mitigation Recommendation Recommendation 1 1 1 1 Investment in marketing Public low acceptance Public low acceptance Expand the source of Expand the source of revenue revenue 2 2 2 2 Internal team focused on GDPR GDPR Law GDPR Law Instacart has a long-term relationship with retailers Other big companies have data Other big companies have data as well as well 3 3 3 3 12
OUR APPROACH WILL BE AN OPTIMIZATION OF THE CURRENT SERVICES AND A SPECIFIC STRATEGY FOR THE NEW SERVICES SOURCE OF REVENUE SOURCE OF REVENUE AS IS TO BE - Automation - Operations efficiency Delivery fee Delivery Fee from retailers Fee from retailers - Different packages availa ble for retailers & brands Advertising Advertising Data Analysis Consulting Services medmix CONFIDENTIAL
STRATEGY FOR THE BEST EXPERIENCE ACROSS INSTACART' S STAKEHOLDERS PERSONALIZED FEATURES FOR DATA ANALYSIS & CONSULTING SERVICES
TYPE OF PLANS FOR DATA ANALYSIS - FROM 2022 ONWARDS PAID PLANS FOR RETAILERS & BRANDS DATA INCA+ DATA INCA++ DATA INCA+++ Data Data for for own own business business X X X X X X Trends Trends of of popular popular items items X X X X Comparison Comparison with businesses businesses with other other X X X X Top Top of of the the search search list list X X Customer Customer profile ( data) data) profile (clustered clustered X X UNPAID PLAN FOR SHOPPERS & CONSUMERS Shoppers Shoppers Consumers Consumers # # of of deliveries, deliveries, area Previous Previous orders orders, , recommended area covered covered, , customer recommended items customer feedback items feedback
TYPE OF PLANS FOR CONSULTING SERVICES - FROM 2022 ONWARDS PAID PLANS FOR RETAILERS & BRANDS CON INCA+ CON INCA++ CON INCA+++ Call Call Center Center Support Analysis Analysis Support for Data for Data X X X X X X Support Support for Marketing for Marketing Plan Plan X X X X Quarterly Quarterly training & coaching training & coaching sessions sessions X X UNPAID PLAN FOR SHOPPERS & CONSUMERS Shoppers Shoppers Consumers Consumers Monthly training & Monthly training & quarterly Benefits Benefits from from a a trained quarterly coaching sessions coaching sessions trained staff staff and and a high a high- -quality quality service service
CONCLUSION INSTACART IS INSERTED INTO A VERY DYNAMIC AND COMPETITIVE ENVIRONMENT AND TO KEEP THE SUSTAINABILITY OF BUSINESS, IT SHOULD EXPAND TO MORE PROFITABLE STREAMS AND CREATE COMPETITIVE ADVANTAGE Thank You!
