Merchant Innovation

How Instacart And Google Are Taking On Grocery

A long time ago in a galaxy far, far away, consumers used to spend hours trawling up and down grocery store aisles for their week’s worth of food. However, with the advent of online shopping, consumers are now spending more time away from grocery stores and with other brands instead.

In a column for Forbes, Barb Stuckey, CIO at retail analytics firm Mattson, explained how the entrance of Google and Instacart into the online grocery shopping scene could have ripple effects for years to come. Stuckey noted that while there’s nothing groundbreaking about the fact that customers can now buy apples and oranges through their Chrome browsers, it’s vitally important to note how this could change the nature of the merchant-shopper relationship in grocery.

Stuckey explained that when grocery stores first realized the need to move at least some of their operations online, they used subpar Web design experience to make sites that were functional but not quite as easy to operate as just going to stores in person. However, Google’s Shopping Express platform now solves that user interface problem, and Instacart’s on-demand courier service reduces any variables in actually picking and delivering orders straight to customers’ homes.

What’s hidden to consumers — and possibly to grocery stores themselves — is that their interaction with grocery brands is limited, if not cut off outright. Given that Google Shopping Express allows consumers to select items from multiple grocery stores, the veneer of technology effectively transforms grocers into warehouses, while Google and Instacart become the new visible brands in the grocery path to purchase.

This shift in power has massive implications on grocery stores’ business models, including how much they charge vendors to place products in particular high-traffic areas. After all, if customers are staying home and using Google and Instacart for their grocery needs, why bother walking into an actual grocery store?


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