Business > E-commerce

Downfall of Instacart Marketplace

In the grocery industry some customers prefer the marketplace platforms and shop through the delivery and shopping apps, and at times prefer to shop directly with the retailer. Due to the Covid-19 pandemic industries like grocery retail and food and beverages noticed growth in demand and have increased the shift towards online shopping practices that are likely to have long-term effects. The demand and popularity of the Instacart marketplace also escalated as it offers more than 300 retailers and trusted local grocers that customers love. Instacart is an online platform where you can shop from your favorite national and regional grocers with your computer or mobile device.

Big grocery chains depended on app-based delivery companies at the start of the pandemic. As there was a huge Covid-fueled boost Instacart was not able to keep up with its momentum. Due to striking shoppers, inventory shortages, challenges of meeting extreme demand, and various other reasons Instacart could not maintain its reputation and had to face downfall in the marketplace.

Reasons for Instacart Downfall

  • Failure in managing its workforce.
  • Some customer reviews knock Instacart for poor substitutions
  • Instacart associates struggle to fulfill orders at several retailers.
  • Instacart should not only focus on enabling online grocery fulfillment but create an innovative grocery retail model.
  • Instacart's business model is not suitable to meet the demands of all its customers.
  • When it comes to fulfilling large bulk orders Instacart is an inefficient choice.
  • Instacart has no motive to help retailers keep their customers loyal to its brand.
  • Inability to provide leadership and create a company with a flawless reputation.

Considering the reasons for the downfall of Instacart below are some of the solutions:

Possible Solutions

  • Instacart can become a distributor, open its stores, acquire a grocery chain, and move into private label manufacturing. 
  • Create an Instacart Business division that specializes in fulfilling bulk orders and more efficient deliveries.
  • Partner with companies for fulfilling orders and deliveries support and utilizing their excess capacity.
  • Hire types of equipment and contract workers to manage bulk pickup and delivery precisely to several stores or regions.
  • Instacart needs to consider leveraging its ability to raise capital.
  • Hire an independent firm to identify risks to customers, improve the operations of the company and increase the morale of the men and women who work hard every day.
  • Be responsible to ensure the safety of customers and ensure all potential risks are identified and eliminated.

Analyzing the data for the “Food and Beverage” category in google shopping for top 5 advertisers when the covid cases started from Jan 21, 2020, and reached the peak towards Jan 8, 2021, we found Instacart used to be one of the very top competitors. But as the cases started to decrease towards March 2021, we found the decreasing visibility of Instacart with it gradually moving downwards on the top 5 list of advertisers.

GrowByData analyzed the trend of Instacart on a regional basis from November 2020 to October 2021 on the category Food and Beverage. In the trend graph below we found that Instacart was on top as a leader. Instacart was doing well with good SOV (Share of Voice) and was a top competitor among the top 5 advertisers in the California region. Instacart was beating Amazon, Goldbelly, Target, and Wild Fork Foods by more than 50% SOV in the US West – California Region from Q4 2020 to Q2 2021 when covid was at a peak. After Q2 2021, Instacart was found to be gradually declining and losing its visibility in this region.

We found that Instacart was more active from Q4 2020 to Q2 2021 during the covid time and was winning over other advertisers seeing the overall regional trend graph. But with time around Q3 2021 and Q4 2021, the performance of Instacart was gradually degrading due to to which Instacart has not listed on the Top 5 advertisers for Food & Beverage category in google shopping in Virginia, Ohio, and Oregon region.

In the Virginia region, Amazon followed by Goldbelly, Target, Walmart, and Wild Fork Foods are listed on the top 5 advertisers SOV in google shopping for Food & Beverage category. Instacart gradually declined from Q1 2021 to Q2 2021 with 25% and Q1 2021 to Q4 2021 with more than 30% in the Virginia region.

In the Ohio region, Amazon, Goldbelly, Target, Walmart, and Wild Fork Foods are the top 5 advertisers. Instacart is losing its visibility gradually from Q1 2021 to Q4 2021 with about 25% SOV.

The Top 5 advertisers for the food & beverage category in the Oregon region are Amazon, Goldbelly, Grinds Coffee Pouches, Target, and Walmart. Instacart was not able to have any impact on other advertisers in the Oregon region.

The above article provides insights on the downfall and regional trends of the Instacart marketplace in the Food & Beverage category on Google Shopping.

You can follow our Search Intelligence Blogs for more interesting data insights and trends across marketplaces.

Devik Balami


Devik Balami is a SEO Analyst and Content Creator at GrowByData, an enterprise retail data platform that provides Marketing Intelligence to boost Total ecommerce Performance for Retailers, Brands and Agencies.

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