The business of grocery home delivery and buy online/pick up in store (BOPIS) has exploded over the past 17 months.
While most major U.S. supermarkets had some demand for — and were beginning to offer — delivery and BOPIS services prior to 2020, they have had to quickly and robustly increase their investment in these services due to the influx of pandemic-related demand. And that demand isn’t slowing down anytime soon.
As a quick way to solve their delivery and curbside challenges, many grocers partnered with gig-worker-powered delivery apps like Instacart.
These apps solved the immediate need to provide quick, easy setup and implementation for grocery delivery and pickup services. But now, the cracks are beginning to show, and grocers realize that Instacart (and similar platforms) may be more of a threat than an ally.
The Problem With Entrusting Your Grocery Delivery and Pickup Services to Apps Like Instacart
As a temporary solution, Instacart and similar gig apps are a great fit. They get you set up quickly and easily so you can give your customers the service they want without spending the time, energy, and money to develop your own internal infrastructure.
While this type of platform may help you get your home delivery and BOPIS services up and running, in the long run, it could hurt your business. Here’s how.
Loss of Profits
Depending on the way your relationship with Instacart is structured, you could be losing money on every transaction.
In most cases, you would either pay Instacart for their services through an added markup to your products or a fee on each transaction (which can be as much as 5-9% of the transaction price). Most companies choose the latter in an effort to keep their prices the same online as they are in the store.
Larger supermarkets may be able to absorb these losses in an effort to hang onto customer loyalty, but smaller chains and independent grocers can’t afford to do so — at least, not for long.
Damaged Brand Reputation
Your brand reputation is a fragile thing. Despite the hard work you’ve put into building it up, a few bad reviews or customer experiences can quickly put a damper on all of that hard work and cause long-term damage to your reputation.
Instacart and similar platforms have no vested interest in ensuring your customers have a positive experience with your store. And when customers have a negative experience due to Instacart’s service, it shows up in your customer reviews and consequently affects your reputation.
Here’s the dilemma with using Instacart: when customers have a good experience with their delivery or pickup, they associate the speed and ease of service with Instacart, not you; but when they have a bad experience, they associate the poor service with you, not Instacart.
When it comes to your company’s reputation for customer service, working with Instacart is a lose-lose situation.
Lack of Control
The bigger Instacart gets, the less control you have. Not only do you lose control over the customer’s shopping experience, but you also lose control of the customer’s data.
This begs the question, “Who owns your customers’ data — Instacart or you?”
The truth is, when you use a platform like Instacart, the customer contact information, preferences, and other data they collect belongs to them, not you. And the customer interface and branding that the customer experiences is Instacart’s as well.
The products consumers are buying may be from you, but ultimately the bulk of their experience is with Instacart, not your company. In some very real ways, they are Instacart’s customers, not yours.
Lost Customer Loyalty
Not only does Instacart have control over your customer data, but they have a lot of control over your relationship with your customers as well.
In truth, platforms like Instacart offer no incentive for a customer to be loyal to you. In fact, when they use the Instacart app, your customers are given the choice to shop with you OR several of your competitors. Instacart isn’t concerned about which grocer the customer chooses to buy from — as long as consumers are using their app, they win.
As the customer uses the platform, they develop a relationship with Instacart, not you. As a result, they begin to see Instacart as their provider. This is perhaps the biggest issue with using platforms like Instacart: your customers become loyal to companies OTHER than you.
Research by Barclays Investment Bank has revealed an alarming trend in customer loyalty (or lack of loyalty, in this case). According to their findings, a staggering 43% of Instacart users stated that if their preferred grocer was unavailable on the platform, they’d simply switch to another Instacart grocery store. It’s evident that consumers are becoming increasingly loyal to Instacart instead of the grocers they buy from.
The key to retaining control of your branding, data, and customer relationships is to run your own grocery delivery and pickup service. That’s where Glympse comes in.
A Better Long-Term Solution: Partner With Glympse
Because platforms like Instacart provide the interface needed to give your customers the kind of delivery and BOPIS experience they now expect, moving away from them can feel daunting. That’s why you need a strategic partner like Glympse.
You need a partner that ultimately represents you and the equity you’ve invested in your brand and is able to scale as your needs change.
Start thinking and planning today with Glympse. We are the partner you need to deliver the experience your customers want while maintaining control over your data, customer relationships, brand reputation, and profits.
Contact us today to learn more about how Glympse can partner with you for better grocery delivery and pickup experience.
Author: Cami Zimmer
Chief Business Officer at Glympse
As Chief Business Officer, Cami is responsible for creating and implementing strategies to enhance new business opportunities and elevate the company’s corporate brand through marketing, communications, and public relations. Working directly with Fortune 1000 partners and customers, she supports revenue growth objectives centered around Glympse’s proven location services technology.