45: Grocery delivery marketplace dominance with Rick Watson

Mark and Sylvain start by covering the latest news in grocery. Canadian grocer Sobeys’ acquired regional grocer Longo’s in another move by this fast-growing retailer. And in the US, the NGA urges investigation of large US grocers for “illegal and anticompetitive business practices.”

As we consider how the market continues to evolve each month, Mark quotes David Bishop from Brick Meets Click who noted the two key success factors for regional grocers.

"Why is it that a shopper goes to a local regional grocery as opposed to a large mass merchant chain?...It's two things. It's their product assortment, and their customer experience. If you can't deliver on your product promise, you're going to have a challenge. And it's just, your shoppers are going to bleed to those chains that can deliver."

So what does that mean for regional grocers on the Instacart grocery delivery marketplace?

Rick explains the value for grocers in balancing their own website with other channels like Instacart, instead of offering only their website or outsourcing completely to the marketplace.

“Walmart, maybe Kroger can shut off Instacart, everyone else, I'm not sure you want to shut off Instacart. I think for the optimized retailer that really understands their customer, that has great product, if you can, long-term, get Instacart to 30% of your online volume, to me, that's your target. Any more than that, you're too beholden, any less than that, I think you're missing opportunity.”

And for regional grocers looking to balance and grow both channels, Sylvain notes the success one of our grocery retail clients Smart & Final has had with this strategy.

“I find this really smart, is the product that they're seating on those marketplaces is also a little bit different than what they're selling online in their own website. So they're getting people hooked, there's the convenience and they're using it to drive more traffic to their own .com as well.”

As the discussion continues around Instacart’s advertising capabilities, Rick estimates that Instacart will become the fourth largest advertising platform in North America. As CPGs continue to move advertising spend online, how can grocers capture that spend? How will Instacart’s dominance in the advertising space impact grocery retailer trade dollars, and in turn their business overall? 

Tune in to the full podcast to dig into what impact Instacart will have in the grocery advertising space, and how the industry might shift and evolve with it.

Did you like this podcast? Check out these other great shows and subscribe for notification on upcoming shows!

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3. Rick Watson on why Walmart joined the Instacart Marketplace

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