A disproportionate amount of this growth has been with small businesses, including independent grocers with fewer than 50 employees and small or emerging brands, according to Instacart’s Economic Impact Report published Dec. 14.
The findings draw on analysis by Robert Kulick of National Economic Research Associates, who examined internal sales, ads and shopper data as well as consumer and retailer surveys and testimonials and outside data from the US Census Bureau and elsewhere.
Increased access through Instacart to ‘hard-to-reach areas’ boosts grocers’ revenues
Through partnerships with more than 80,000 retail stores and more than 1,400 national, regional and local banners in the US and Canada, Instacart reports it has helped brick-and-mortar grocers in the US boost their revenue by $7.96bn.
Of this, more than $2bn in increased revenue has gone to small grocers with fewer than 50 employees by bringing their businesses online to reach new customers, many of whom live in “hard-to-reach areas” or who face transportation barriers and other challenges, according to the report.
Instacart reports it has 7.7m customers who actively order monthly, and it can now reach 93% of households in low income, low access areas in the US. Through partnerships with the US Department of Agriculture it says it can also now reach 95% of households that rely on the US Supplemental Nutrition Assistance Program – an important consumer base for many retailers.
To better serve these consumers, Instacart says it has helped grocers create more than 231,000 jobs in the past decade – three in ten of which have been at small businesses, which the tech and delivery company notes is more than double the industry average.
Advertising tools drive double-digit revenue gains on average
Instacart similarly has disproportionately helped small and emerging food and CPG brands build their businesses by helping them reach new customers and boost sales in part through its advertising, tools and insights.
For example, Instacart reports, on average brands that advertised on Instacart saw more than a 15% increase in sales, while produce advertisers saw an even higher increase of 30% on average.
This finding aligns with what Instacart consumers are placing in their carts. According to the report, about one in four products sold on Instacart is fresh produce, including more than 13% fresh fruit and more than 11% fresh vegetables.
In addition, a separate study found low-income consumers who buy groceries online spend on average $5.24 more on fruits and vegetables compared to those who shop in-store without increasing their total grocery bill.