26 JANUARY 2019 WINSIGHT GROCERY BUSINESS
service nationwide, touting that as “rush delivery.” These orders
are typically fulfilled in less than two hours by Instacart’s contracted shoppers and drivers. Just 4 U discounts aren’t available,
and the delivery ends at the doorstep.
Assuring the company can differentiate on this service is trickier,
Hunt says, although she monitors metrics such as shopper ratings.
Grand Rapids, Mich.-based SpartanNash debuted compa-
ny-controlled fleet delivery services associated with its Fast-
Lane click-and-collect site a year ago, but it contracted a local
delivery partner called The Grocery Runners when it sought to
expand the test. Today, the company offers employee delivery
only in stores where the volume of orders is too low for its part-
ner to efficiently serve, says Matt Van Gilder, SpartanNash’s
manager of e-commerce operations. SpartanNash also offers
“Instacart is a great solution for retailers and customers, quite
frankly because it’s much more turnkey to work with Instacart
than to build out the program ourselves,” Van Gilder says. “But
we pride ourselves on our FastLane program and being able to
provide our customers a personal experience—really owning
that relationship, having the same pickers at the same store week
after week, so customers can come to rely on them. We can also
leverage quite a bit from our loyalty data that we collect from
our customers, providing them a unique personal experience.”
The Grocery Runners was founded in 2015 with the goal of
partnering with retailers such as SpartanNash that are looking to
build on click-and-collect. Unlike Instacart, Grocery Runners is
strictly a last-mile delivery company that is not in on the order-
ing or picking of grocery orders. In published materials seeking
investors, the company said it is aiming for revenues of $4.7 mil-
lion by 2020 by completing a half-million deliveries at an average
price of $8.99 a delivery.
Although the program is still in its early days, Van Gilder says
SpartanNash sees potential as virtual demand grows, pointing
out that more than half of its online sales are incremental through
both new customers and existing shoppers, with whom online
ties are driving greater frequency and higher baskets.
“What we see is a trend of customers looking for convenience
in their shopping, and delivery is a big part of that, and that’s why
we’re doing all these experiments on what works best,” he says.
“Delivery is not a huge majority of e-commerce right now for us.
It’s not as big as click-and-collect. But it’s growing, and as the
consumer gets more and more attached to not having to leave
their house, we have to be ready and able to provide that to the
customer, hopefully in a profitable way.”
Taking It In-House
Sources attribute Instacart’s booming business to the relative ease and speed at which it can get grocers into the e-commerce arena—as well as the join-or- perish proposition its expansion ultimately poses for them. But it shouldn’t be overlooked that Instacart
also creatively tapped into a demand for convenience that gro-
cers may have underestimated. Instacart appears determined to
leverage its crowdsourced hooks in the industry through expan-
sion to new services and offerings such as taking on click-and-
collect and making its own ties with partners by leveraging traffic
to its properties—while warming to the challenge of price com-
petition from giants such as Amazon and Walmart.
Instacart’s latest funding places its value at $7.6 billion, indicat-
ing that despite some grocery industry uneasiness over the bar-
gain with customer relationships and data, it’s likely here to stay.
One of the industry’s last Instacart holdouts is a scrappy com-
pany in Bentonville, Ark.
Walmart—whose Sam’s Club warehouse division is an Insta-
cart client—appears determined to own its online grocery busi-
ness end to end, and it’s now testing one possible solution for that.
Dubbed Spark Delivery, it marries a crowdsourced delivery solution to its booming click-and-collect business. Launched in New
Orleans and Nashville in September, Spark has since expanded
to additional cities in Tennessee; in Virginia, including Williamsburg, Newport News and Virginia Beach; and the metro Washington, D.C., communities of Alexandria, Manassas and Fairfax.
The appetite for home delivery
has been awoken for consumers
and retailers.” —Tamir Gotfried, Bringg
from its fleet.