Instacart Gets Transparent With Online Grocery Costs

The online grocery shopping and delivery market has gained popularity in recent years, and many consumers may be willing to pay an extra price for the convenience of store-to-door service. But one online grocery delivery service, Instacart, has just launched new transparency initiatives that will make it clear to shoppers whether they are paying more for their goods, and why.

According to reports, Instacart is now displaying notifications next to products that specify whether the product is the same price as seen in stores, or is higher. If it is higher, the company is also specifying whether that price hike is coming from Instacart or one of its partners, like Whole Foods.

Experts say the latest transparency push is a sign of success for the company. When it first launched, it reportedly relied on item price markups for revenues. As it gains popularity, however, Instacart is turning away from this business model and instead depending on new deals with local grocers that give Instacart a cut of the sales made online. Instacart partners with an array of groceries in several cities.

“One of the reasons that people use Instacart is because a lot of the prices have been the same as the in store and they can jut pay a delivery fee,” said Instacart CEO Apoorva Mehta in a recent interview with Re/code. “What we’re doing is making sure that everyone is aware of which stores are like that so they can make more informed decisions themselves.”

The company is now reportedly worth $2 billion, but it is facing heavy competition from peers like Peapod and larger eCommerce corporations like Amazon, whose Amazon Fresh is touted to be cheaper than its rivals by more than $20 for a 30-item order, according to recent analysis.

Other competitors like Walmart have introduced a mobile ordering option, but for in-store pickup only, though some experts say the company may look into grocery delivery in the near future.