A recent joint report from Grocery Doppio, Incisiv, and Wynshop reveals that the majority of grocers believe Instacart’s decision to go public is the right strategy. The report, based on data analysis of 1.9 million shopper orders and surveys from over 35,000 shoppers and 3,000 grocery executives, highlights grocers’ opinions about Instacart’s impending IPO and their relationships with third-party grocery apps.
While 59% of all grocers and 72% of grocers that use Instacart support the company’s decision to go public, the report also shows that 84% of grocers believe their own digital strategies are capable of competing with third-party apps. This sense of confidence among grocers is driven their increased market share in the digital space, as they have been able to rely less on third-party apps to scale.
The report also sheds light on the concerns of grocers regarding third-party apps. As many as 87% of grocers fear losing touch with customers who use these apps, while 76% worry about media revenue competition and 61% compete with third-party apps for digital talent.
Despite these concerns, grocer executives have grown more confident in their digital grocery businesses, having claimed a 35% market share from third-party apps between August 2022 and August 2023. This growth in confidence is attributed to the competitive strengths grocers have developed in the digital space since 2021.
Additional findings from the report include the fact that third-party apps only gained a 0.1% increase in sales between July and August, while grocers increased their share of the digital market from 81.9% to 83.6% year-to-date. The average basket size of third-party apps exceeded that of grocers $26. Total grocery sales in August were $78 billion, with digital grocery sales reaching $10 billion.
Going forward, industry experts anticipate that Instacart’s IPO will benefit the digital grocery ecosystem as a whole. The expectation is that both grocers and third-party apps will invest more in personalization, inventory management, fulfillment efficiencies, and loyalty to bolster their profitable digital grocery businesses.
– Grocery Doppio, Incisiv, and Wynshop joint report