Instacart Retailers Cut Fees to Woo Cash-Strapped Shoppers

Affordability is one of the biggest opportunities to accelerate online grocery adoption, Instacart CEO and Chairperson Chris Rogers said in prepared remarks for a Thursday (Aug. 6) earnings call.

A growing number of retailers are meeting the demand for affordability by offering online grocery delivery via Instacart’s platform with no markups on item prices. Rogers said Grocery Outlet, Strack & Van Til and Super King Markets are eliminating markups nationwide on Instacart, while Ace Hardware, Calgary Co-op, Tractor Supply Company and World Market recently joined the platform and launched with no markups.

“Retailers that offer no markups on item prices continue to drive faster growth and stronger customer retention,” Rogers said.

The PYMNTS Intelligence report “The New Checkout: Crimped Consumers Lean Into Online Retail and Digital Wallets” found that financially pressured consumers are more likely than others to purchase groceries online, in part because they are seeking greater control over their budgets and easy access to digital discounts.

Rogers highlighted retailers’ shift to no markups as one of the trends Instacart saw during the second quarter. In that quarter, both the company’s gross transaction value (GTV) and its total revenue increased by 14% year over year, according to a Thursday press release.

Instacart’s technology is designed to solve the complexities of online grocery, which include high inventory turnover that makes it hard to predict what is on the shelf, vast store scale that makes it hard to find items, perishables that require getting freshness and ripeness right, and customers’ dietary preferences that must be understood to provide relevant replacements, according to a presentation released Thursday.

Data drove the success of Instacart’s online grocery marketplace, while new artificial intelligence (AI) capabilities contributed to the gains of its enterprise technologies business, Rogers said.

In Instacart’s marketplace business, data is “one of our biggest advantages” in the company’s efforts to deliver the best end-to-end grocery experience, Rogers said.

Data helps Instacart continuously improve order quality in terms of found rate and perfect-order fill rate, powers its AI assistant’s ability to assemble an order that is ready to be placed and delivered, and enables a new feature that, when a customer’s preferred product is out of stock, recommends replacements that meet the customer’s dietary preference, Rogers said.

“[Data] gives us a structural advantage that’s incredibly difficult to replicate, and it allows us to build better grocery experiences with every order,” Rogers said.

On the enterprise technologies side of its business, Instacart continues to see retailers adopt its omnichannel commerce platform, Storefront Pro; its AI-powered smart carts, Caper Carts; its AI solution that turns a retailer’s data into insights, Agentic Analytics; and its white-label AI Assistant, Rogers said.

“Retailers increasingly choose Instacart because we’ve already solved the hardest problems in online grocery,” Rogers said. “We bring those capabilities together in one connected platform spanning eCommerce, fulfillment, in-store, retail media and AI, while keeping retailers’ brand, customer relationships and data their own.”