MultiBrief: Grocery shopping has joined the sharing economy with Instacart.
Millennials are causing change — everywhere. Millennials are changing the workplace, the home and everything in between. The sharing economy is one of the changes from this generation, and it doesn’t seem to be going anywhere.
What is the sharing economy?According to Benita Matofska, founder of The People Who Share, a U.K.-based nonprofit whose mission is to mainstream the sharing economy, it’s a “socioeconomic ecosystem built around the sharing of human and physical resources. It includes the shared creation, production, distribution, trade and consumption of goods and services by different people and organizations.”
From Uber to Kickstarter, the sharing economy is ubiquitous— even catching the nickname P2P, or peer to peer. These companies are connecting individuals whose wants and needs align. For example, a guy in Chicago has an apartment that he needs to be rented for a few months over the summer. He can use airbnb to find someone to fill this vacancy.
One of the newest additions to this sharing economy is P2P grocery shopping, specifically Instacart.
What is Instacart?
Instacart connects an individual with personal shoppers in the area who pick up and deliver groceries. Currently, the service is offered in many areas, including Boston, Chicago, Houston, Los Angeles, New York City and Washington, D.C. The service is constantly spreading and upgrading, so it could be coming to your city before you know it.
Not only should consumers be excited for the Instacart expansion, but so should grocery retailers. Instacart partners with local grocery stores to offer its customers the best options. One of the most well-known partnerships currently is with Whole Foods.
Whole Foods began its partnership with Instacart last fall. Through the arrangement, Instacart was able to offer better rates at Whole Foods than other stores who are not partnered with them. The statistics from the partnership show the success.
“Whole Foods Market is now providing fresh grocery delivery options to more homes in America than any other food retailer,” said Emily Wright, global media relations specialist at Whole Foods Market. That is all thanks to the partnership with Instacart.
“Since announcing our 15-market partnership with Instacart in September, our average weekly online delivery sales have already passed the $1 million mark,” Wright said. “With online delivery sales as high as 5 percent of total sales in some stores, we are very excited about the future potential as we expand our reach to more markets, provide richer content highlighting our quality standards and broaden our product offering.”
The Instacart-Whole Foods partnership is considered a success based on sales figures alone. But the attitude of the partners also shows success. Both sides of the partnership were pleased, and the partnership is pushing forward rather than staying stagnant.
“We ran an innovative promotion on Valentine’s Day where we offered floral delivery in as little as one hour, with prices starting around $25 for a dozen of our high-quality, ethically sourced Whole Trade roses,” Wright said. “Orders could be placed in advance, and combined with the ability to include chocolates or other special treats. It was very well received by our shoppers.”
By offering different angles, promotions, etc., the partnership is able to offer customers a better experience. And the customers are adapting to this quickly.
What should grocery stores know about Instacart?
The success from the Whole Foods partnership should catch the attention of grocers nationwide. It’s a way to increase your sales— just by forming a partnership. But, before you jump in head first, here are a few facts to help you understand Instacart better.
Instacart has a flat-rate delivery fee for customers. However, on top of that fee, retailers mark up the price of the items on Instacart. This does cause the price to be higher than what would be paid at the store, but for many the convenience is worth the extra money. It is predicted that the markups will be removed with time.
“It’s a matter of time until all grocers on Instacart have no markups. It just takes time to get there,”Instacart founder and CEO Apoorva Mehta told Forbes. “There’s a delivery fee that’s clear to you. That’s something we share with customers. We believe in the long term it’s best for customers to pay what they would be paying in the store plus delivery fee.”
Instacart customers place their order online. They select what they want, and the personal shopper goes shopping with the list.However, many stores offer unique products not available in other stores. Would these items be available on the Instacart site?
Instacart was ready for this. All you have to do is create a special request. Therefore, if you offer specialty products, your customers won’t have to sacrifice them for delivery.
Instacart does not offer deliveries for nongrocery items, though. You cannot purchase tobacco, gift cards, etc. You may purchase pet items, but not live animals.
Instacart does offer alcohol delivery. Even though Instacart has its own prices for food, it offers the in-store price of alcohol to customers. The customer must pay a delivery fee, but the item itself is the sale price at the store. The customer must also provide proof of age at time of delivery.
Will cancellations and returns hurt grocery stores?
There is little risk on the grocer with Instacart. Instacart takes the payment at the time of the order. Therefore, the grocery store will be paid when the shopper completes the shopping list. There is no chance of the groceries being delivered without payment.
If the customer decides there are certain items that were delivered that they don’t want, they can take them back to the store for the refund— following the store’s refund policy.
Instacart was named the No. 1 company on this year’s Forbes America’s Most Promising Companies list. It also recently announced a $220 million Series C funding round that valued the company at more than $2 billion.
Instacart is planning to revolutionize the grocery shopping experience. Grocery stores should all
But … Here’s What The People Delivering Your Instacart Groceries Really Think
source: Huffington Post
In today’s app economy, part-time work just isn’t what it used to be.
Once upon a time, a part-time job at a supermarket would have meant spending hours behind a cash register. These days, a part-time grocery job could mean spending hours in your car waiting for an order to come in — and not necessarily getting paid for that time.
As Instacart, a grocery delivery app that pairs customers with personal shoppers, continues to increase in popularity, some employees at the much-hyped startup are speaking out about what it’s really like to do their jobs. Their experiences raise a number of questions about what the future holds for increasingly popular apps that offer on-demand services, from car rides to vacation rentals to home cleaning.jump on board the bandwagon to see success in grocery delivery.
Instacart contracts with 4,000 independent personal shoppers, who work in 15 cities around the country. Shoppers receive a digital shopping list from customers and then pick out those items at a local grocery store, before showing up at the customer’s door with the goods. In return, the shoppers are “compensated based on a formula that factors in the number of orders per shift and the number of items per order,” according to a company spokeswoman. “During busy shifts, shoppers can earn $20 or more an hour depending on tips.” The company’s website says shoppers “make up to $25 an hour.”
When shifts aren’t busy, several employees said their minimum hourly base pay was $10, and that their typical hourly pay usually hovered around that figure. Instacart declined to confirm whether it offers base pay, and some Instacart workers told HuffPost they are not offered an hourly guaranteed wage.
“It’s a really strange job, and there are many weeks where you’re just sitting in the car waiting for orders and hoping something comes in, not being paid to be there,” one of Instacart’s personal shoppers, a 24-year-old college dropout based in Chicago, told The Huffington Post in an interview. “But it’s keeping gas in my car. I’m working a job that requires gas that is essentially just paying for my car. It feels like selling my hair to buy a hairbrush.”
The employee, who did not wish to be identified for fear of losing his job with the company, said that during his first week with Instacart, he made about $350 working just three days. At the end of the week, however, he made a mistake on an order and received a negative customer rating, which led to fewer and smaller orders to fill. Because he’d only been working for a few shifts, it took some time for his “shopper score” — and his pay — to bounce back. Meanwhile, his better-rated colleagues were getting more lucrative opportunities.
He would have quit months ago, he said, but he needs the money to keep his car, which he uses to get to his other two part-time jobs.
“It feels like I’m playing a video game, except in real life for real money,” he said.
Another shopper who worked with the company in Philadelphia for six months last year said the amount of driving required by the gig sometimes meant spending more money on gas than she earned over a five-hour shift making deliveries to neighborhoods and suburbs located more than a half-hour’s drive from her home near Center City. The 31-year-old entrepreneur is no longer with the company.
“For a part-time gig to earn some extra cash, sure, [the pay was fair],” the former shopper, who also did not want to be identified by name, told HuffPost. “Not really for a main source of income because it’s minimum wage and very physically and mentally taxing.”
Not all Instacart workers are disenchanted, of course. Another employee in Chicago, a 27-year-old film student and musician who started shopping for Instacart two months ago, told HuffPost he is “overall pretty grateful” for the work. He praised the experience as “kind of fun” — like being a contestant on the defunct game show “Supermarket Sweep.” He plans to stick around.
“There are days when I’m on point and can see the order, and it’ll be like ‘A Beautiful Mind’ and I can just map out the whole store in my head and know where everything will be,” he said. “Other days, I’m just staring [down an aisle] like, ‘Where is the molasses?’ Those moments to me are the worst because in my mind I feel the clock moving.”
Lace, a 28-year-old performance artist who started working as an Instacart shopper in Houston last year but has since transferred to Los Angeles, also said she “loves” working for the company.
“It’s really easy work that pays well,” Lace told HuffPost.
The worst part, she said, is dealing with “pushy and demanding” customers who don’t tip, even after she lugs heavy items — like cases of bottled water — into their homes. When Instacart shoppers order multiples of the same heavy item, like cases of water or bags of cat litter, the company formula still counts those as “one” item, shoppers explained. As a result, getting the order to the customer’s house doesn’t always come with a bulk-order bonus.
“Some complain about the price of produce, then you get to their place and they live in a giant mansion in the hills,” Lace added. “Catering to every whim of the upper crust, when you’re just trying to hustle through your shift, can be aggravating, but we do our best.”
Sunil Raman, a general manager at Instacart, told HuffPost that the company’s data on the continued activity of its shopper fleet indicates that most shoppers are happy with the gig.
“There are bound to be bumps in the road, but we’re really working hard to help our shoppers along the way,” Raman said.
Scrolling through dozens of Instacart worker reviews on Glassdoor.com, a site that lets people post anonymous reviews and salary information about companies, some common themes emerge: People posting on the site described being happy with the flexible scheduling, a high level of autonomy and a relatively relaxed work environment. Other posters complained about sometimes-unpredictable pay and the isolation of spending most of a work shift alone, as well as the financial stress of paying for a vehicle, gas, tolls and smartphone — the engine that powers it all.
Arun Sundararajan, a professor at New York University who has been dubbed the “go-to expert” on the so-called sharing economy, said the conditions are ripe for a company like Instacart to expand rapidly, as on-demand apps continue to grow in popularity. (The sharing economy, for the uninitiated, describes an emerging business category catering to individuals who rent or borrow goods, such as cars or apartments, instead of buying them.) Instacart also sees greater odds for success thanks to the availability of apps and smartphones that use GPS, technologies that weren’t in people’s pockets when dot-com flameouts like Kozmo and Webvanattempted grocery delivery and failed.
“It’s very easy for someone to get a GPS-enabled smartphone, so your labor pool is potentially huge, and the technology in the stores has also become far more amenable to this,” Sundararajan said. “The click-and-collect model of how we buy stuff has become increasingly possible because of all of this.”
Still, the success of a company like Instacart ultimately depends on the quality of service offered by its workers, the vast majority of whom are independent contractors who do not earn health insurance, vacation days or paid sick leave. Instacart’s full-time employees — developers, managers and sales reps, for example — do enjoy such benefits, but there are only about 100 of these positions at the company.
Sundararajan argued that this business model is risky for Instacart and other firms like it because it hands over so much control to workers who don’t feel particularly invested in the company’s overall health. Workers have detailed similar experiences at other rapidly growing apps, Uber and HomeJoy among them.
Sundararajan suggested that a company like Instacart consider, at minimum, pairing newbie shoppers with expert mentors when they are starting out.
“Eventually these companies’ brand comes from consistent high quality, and that rests almost entirely in the hands of freelance workers,” Sundararajan said. “It’s simply smart capitalism to have a healthy workforce of people motivated to work for you.”
Raman, the Instacart manager, told HuffPost the company does “try to incorporate feedback [from shoppers] into all the improvements we make in the business.”
He said the company formed a “shopper happiness” team late last year, which provides support to workers through a shopper hotline that’s available 18 hours a day. The team is also responsible for shopper roundtables to inform how the company’s software is designed, as well as shopper parties and other get-togethers.
Hunter Stuart contributed to this story from New York.
Clarification: A previous version of this story described Instacart’s shoppers as employees; they are independent contractors.