Amazon’s recently reported plans to offer “ultrafast” grocery delivery may well have been a shot across the bow at Instacart, which has carved a lucrative niche in the space. The e-commerce giant’s plans to deliver groceries in 30 minutes or less sent Instacart’s stock tumbling 5% earlier this month.
But the grocery delivery company so far appears to be taking it all in stride, doubling down on plans for partnerships and enterprise-level services. Speaking at Nasdaq’s 53rd London Investor Conference on Tuesday, Instacart CFO Emily Reuter said that analysts can expect to see the company continue to “lean into” partnerships.
“We found that we’re actually quite good at them,” Reuter said of partnerships. She pointed to Instacart’s agreement to deliver restaurant orders with Uber Eats as one example. The company’s partnership with Grubhub is another.
The Uber partnership, Reuter said, emerged from an effort to “drive incremental engagement” in a way that ultimately brings consumers back to spending on groceries.
“That’s important framing for people to understand: We are a grocery technology company,” she said. “Grocery is our core business.”
Though Reuter didn’t mention Amazon by name during the 30-minute conversation, she noted that “competition is truly not new to our sector.”
“Our perspective would be that people have long understood that online grocery is an attractive market. It’s under-penetrated,” she said. “Many [competitors], if not all, have been at it for upwards of five-plus years, trying a lot of different things.”
Reuter said that Instacart’s focus on enterprise customers remains a “key component” of the company’s strategy, and a differentiator in the marketplace. Instacart’s enterprise services for retailers, marketed under the “Instacart Platform” moniker, allow retailers to use the company’s technology to set up their own digital storefronts. Customers can white-label Instacart’s offerings to match their own branding.
Reuter said the company is currently “white-labeled across over 350 of our retail partners’ sites.”
That’s made Instacart the “trusted tech partner” for many of its retailer customers, she said. Enterprise customers represent about 20% of Instacart’s total business, Reuter noted. Such customer relationships tend to be “much stickier,” she said. They also may give the company a competitive advantage.
“We think the enterprise side of the house also gives us access to a unique part of the market that really no one else that you would traditionally think of as our core competitors has access to,” she said.
Instacart, which was founded in 2012 and went public about a decade later, has turned a profit in recent years, recording net income of $144 million in its third quarter. That was up $118 million year over year. Reuter said the company has seen double-digit growth over the last seven quarters.
And at a time where affordability remains top of mind for many consumers, Reuter noted that there’s a broader consumer trend toward convenience.
“Even when customers are pinched in their wallets, they seem like they’re continuing to spend on convenience-oriented items,” she said. “I think that’s generally a positive for our industry and for Instacart.”
Reuter appeared at Nasdaq’s London conference a day after Instacart announced yet another partnership: This one with ChatGPT maker OpenAI. The grocery delivery company has launched its own app within ChatGPT that will enable customers to buy goods directly through the chatbot.
The partnership is part of a broader move toward so-called agentic shopping, where chatbots can offer up suggestions to users and ultimately make purchases on their own with little or no human intervention. Such commerce, which is regularly touted by tech giants as the future of shopping, also carries significant fraud risks.
