Instacart Sustainable Growth Strategy Overview
Instacart is evolving its business model to sustain growth by adapting to changing market dynamics and competitor landscape. With a focus on key objectives, economic growth analysis, and strategic partnerships, Instacart aims to solidify its position in the market. The company's innovative approach, including the introduction of an advertising platform and planned IPO, highlights its commitment to long-term success in the grocery delivery industry.
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Presentation Transcript
Instacart A Sustainable Growth Strategy January 2022
The process Implementation Plan & Financial Projections Risks & risk Mitigation Key Issues & Analysis Recommendations Alternatives
KEY OBJECTIVES I Business Model II Instacart s Evolving Business Model: A Sustainable Growth Strategy Challenge Partners III Platform IIII Workers Key Issues & Analysis
The economic growth of InstaCart Business Model Share Markets The Growth Partners Platform Sales in between 2013-2020 In Millions $ Workers 1600 1500 500% growth due to the outbreak of covid-19, an increase of 300% from year to year. 1400 1200 1000 735 800 40,000 retail stores in Canada and the US Now that the world is starting to go back to physical shopping in supermarkets, InstaCart needs to think of an up-to- date strategy to keep it growing. 525 600 Profit in 2019-2020 In Millions $ 10 400 300 185 3 120 200 75 10 0 0 2013 2014 2015 2016 2017 2018 2019 2020 Revanues between 2013-2020 in million $ 2019 2020 -2 During the Covid-19 food deliveries became a necessity -10 Profit per order Key Issues & Analysis
The business model of InstaCart Business Model Buy in $35 or more $9 per delivery annual $99 subscription-free delivery Partners Platform Additions to the business model Shoppers Workers InstaCart advertising platform The four-sided marketplace model During 2019 advertising revenue brought in nearly $ 300 consumers CPG Brands Target by 2022 revenue of $ 1 billion Retails 10% FEES Instacart have developed another layer on the business model - an advertising platform In addition there is a planned IPO with an evolution of 17.7 billion Key Issues & Analysis
Competitors arena Business Model Partners Partners Retails Platform Workers Delivery sales handeled by companies in % Instacart Door Dash 7% Attractive fees 48% Amazon 45% Supermarket chains Walmart Grocery Instract others There a market share to penetrate - the main competitor (Door Dash) There are more attractive fees Key Issues & Analysis
Competitors arena Partners Business Model Retails Delivery sales handeled by companies in % Partners Platform Instacart Workers Door Dash 7% 48% Attractive fees 45% Amazon Walmart Grocery Instract others Supermarket chains The concerns of our partners: * Taking over their data and thus taking over the customers * The high fees of each shipment Key Issues & Analysis
The problem of employees in Instcart Business Model The challenges Partners Platform GIG WOEKERS Workers Provided additional sick leave Raise wages by $ 5 association An approach that empowers women (70% are women) and creates an attractive place for employees Prop 22 Despite all the effort, cause the legal change InstaCart needs to make significant change in the form of its employment Key Issues & Analysis
Business Model Partners Platform workers Alternatives
Business Model E-Commerce Advertising What? Put an end-to-end e-commerce platform. What? Using the sales platform as advertising space. Alternatives
National Market Goals YES E-Commerce criteria Advertising NO Profitable sustainable Alternatives
Partners Customer retention Customer retention Sharing data Sharing data Reduce fees Reduce fees What? Help stores retain the customers they buy from other stores. What? Give the stores the data about customers who shops at their store. What? Help stores retain the customers they buy from other stores. Alternatives
Partners Sharing data Sharing data What? Give the stores the data about customers who shops at their store. Don t Share DATA Share DATA criteria sustainable Alternatives
Partners Customer retention Customer retention Take part in the effort Do not take part in the effort criteria What? Help stores retain the customers they buy from other stores. Profitable sustainable Alternatives
Partners Reduce fees Reduce fees Not Reducing fees Reducing fees criteria What? Help stores retain the customers they buy from other stores. Profitable sustainable Alternatives
Partners Sharing data Customer retention Sharing data Sharing data Help local stores. Reduce fees Reduce fees according to market. Help local stores. Share some of the data. Work under local law. Continue to build improvements for the stores. Alternatives
Platform Keep it simple Take it out Play it What? Keep at as it is right now. What? Make the platform relevant for in stores shoppers. What? Leave customers more time on the platform. Alternatives
Platform YES criteria Keep it simple Take it out Play it NO Profitable sustainable Alternatives
Workers Direct transaction Contractor Company What? Commencement of direct employment of workers in accordance with the laws of the various countries. What? Hiring employees under a contractor company. Alternatives
Workers YES Direct transaction Contractor Company criteria NO Profitable sustainable Alternatives
Recommendations Business Model Partners Platform workers Recommendation
Recommendations Business Model Partners Platform workers Recommendation
Recommendation Increase in advertising profits Reducing profits from fees Recommendation
Recommendations Business Model Partners Platform workers Recommendation
Recommendations Creating confidence-building steps A unique value proposition for partners Creating and managing a customer club Data analysis Increase in profitability Option to register as store customers Specials for store customers Custom Deals (IT) Contacting club customers via banners and email Digital wallet - accumulating and realizing in digital and in reality Decrease in fees Trending analysis of the store Analysis of products by periods Products that are "almost purchased" General trends Recommendation
Recommendations Business Model Partners Platform workers Recommendation
Recommendation Shoppertainment Recommendation
Recommendations Business Model Partners Platform workers Recommendation
Recommendation Establishment of a subsidiary Recommendation
Implementation 1styear 2ndyear 3rdyear Continue to recruit employees with experience in digital advertising Opening contracts with a partners Development of a customer club management interface Developing a data management interface for partners Development of data collection and analysis systems Continue to develop steps from two years earlier Beginning a gradual transaction through a subsidiary Development of the digital platform Market surveys Follow labor laws Implementation Plan
Implementation Financial Projections Income Revenues from advertising in the platform in 2019-2020 In Million $ Additional food companies advertising in the platform, and more advertisements while visiting the platform Estimated growth of 50% in the next 3 years 1,000 Thousands $ 2021 2022 2023 300 Advertising in Platform 1,000,000 1,500,000 2,250,000 2019 2020 Revenues from advertising in the platform Financial Projections
Implementation Financial Projections Income 1200M revenues from sales; Decreasing the fee per order , from 10% to 5% ( the average market fee) 700M delivery 500M fee of stores *0.1 = 50M 500M*0.05=25M Million $ 2021 2022 2023 Advertising in Platform 1,000 1,500 2,250 Fees from stores 25 27.5 30.25 total 1025 1527.5 2280.25 Financial Projections
Financial Analysis Investments Costs We estimate about a year of developing the platform and the digital wallet Thousands $ 2020 2021 R&D platform+ digital wallet - 4 experts 480 Building subsidiary to deliveries (+5 employees) 2,500 total 480 2,500 Financial Projections
Implementation Financial Projections - Expenses Thousand $ 2020 2021 2022 Recrewing customer relations employee to build and maintaining the customer club 120 120 120 Deliveries 70,000 70,500 71,200 total 70,120 70,620 71,320 Financial Projections
Implementation Financial Projections- NPV Millions $ 2020 2021 2022 2023 Investme nts costs 480 2500 Expenses 70.12 70.62 71.3 Income 1025 1527.5 2280.25 Total -480 -1545.12 1456.88 2208.95 NPV 211M$ - Positive cash flow Financial Projections
Risk & Risk Mitigation Impact Risk Mitigation Competition in the market will force you to change the way you work. Monitoring the market and preparing a lobbyist for decision-making centers. competition Probability Risk & Risk Mitigation
Risk & Risk Mitigation Impact Risk Mitigation Competition in the market will force you to change the way you work. Monitoring the market and preparing a lobbyist for decision-making centers. competition Restrictive laws will come into force in the context of collecting customer information. Monitoring international developments and building possible action plans for the use of the various data. legislation Probability Risk & Risk Mitigation
Risk & Risk Mitigation Impact Risk Mitigation Competition in the market will force you to change the way you work. Monitoring the market and preparing a lobbyist for decision-making centers. Decreased use competition Restrictive laws will come into force in the context of collecting customer information. Monitoring international developments and building possible action plans for the use of the various data. legislation The number of customers on the platform will decrease Building options for reading "time-consuming" information such as information on nutritional and health values Probability Risk & Risk Mitigation
Recommendations Business Model Partners Platform workers Recommendation
