The Instacart Paradox can easily confuse brands and advertisers. Instacart is part marketplace, part last-mile delivery, part advertising space, and yet not fully any of these all at the same time. Kiri Masters joins the pod to explain Instacart and how brands can leverage Instacart as a marketing strategy.

Instacart for CMOs

• Kiri just wrote a new book called “Instacart for CMOs.”
• “There wasn’t as much written about Instacart as there was about other retail marketplaces and there’s a huge thirst for information from brands.” - Kiri Masters
• This book is a comprehensive guide on how to approach Instacart and how to understand it for your business.

Fulfillment and ROI

• “[Instacart] doesn’t quite fit the definition of a delivery app and it doesn't quite fit the definition of a marketplace.” - Kiri Masters
• Instacart isn’t a traditional two-party marketplace, but a four-sided marketplace—the retailer, the in-store shopper, the delivery gig-worker, and the brands that advertise via Instacart.
• Delivery is a complex issue for businesses in making them profitable. Kiri suggests that fulfillment as a service is a new business model and Amazon is way ahead. Other retailers need their own infrastructure, but are far behind.
• Instacart is better positioned for the long-term because grocers, for example, are in the grocery business—not the innovation, technology, logistics, and fulfillment business.
• 10 out of the 10 clients assessed for the book said that Instacart is their highest ROI on ad auctions.
• Repurchasing is 20-25 percent of shopping activity and Instacart helps drive this by setting up its UI to recommend previously ordered product to its customers again and again.

The Instacart Paradox and the Complexity of Ad Networks

• Instacart offers great ROI for an advertiser and the demand is there. However, there’s a lack of control over the availability, the content, and the pricing.
• For example, if a certain geography is out of a certain product because of a retailer’s inventory, a competitor could win those advertising bids.
• Ad investments are fractionalized across many platforms, so in order for brands to build their own infrastructure, a lot of work would have to be done to bring in-house skill and capabilities to the table.

Links

• Find Kiri’s new book Instacart for CMOs, written with Stefan Jordev.

 

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