The Parallels of Instacart & Netflix

Despite its high margin ad business, I think of all the players in grocery, Instacart has a difficult road ahead of it - essentially a Netflix problem.

Stuck between the end of Blockbuster and the rise of digital, Netflix needed to do something difficult - maintain its advantage as its business model completely changed. It worked despite a few missteps along the way.

Instacart is faced with a similar challenge now. It's a grocery model is built for an older era. Despite the pandemic turbocharge, other more up-and-coming models are more suited to the next wave of the digital revolution.

Bloomberg reports that Instacart is investing in robotics and automation which may be independent locations (like dark stores/Ocado) or attached to stores (like what Walmart is testing) - essentially "Walmart for everyone else."

After trying a few other options, I expect Instacart to abandon its partner-based strategy and go direct. It will either go direct with its own brand, or because these mid-market legacy grocers don't have the capital to pick up, they could be forced to take investment positions in these firms.

Either way, success 5 years from now could involve moving on from its current model. Just like Netflix.

Rick Watson

Rick Watson founded RMW Commerce Consulting after spending 20+ years as a technology entrepreneur and operator exclusively in the eCommerce industry with companies like ChannelAdvisor, BarnesandNoble.com, Merchantry, and Pitney Bowes.

Watson’s work today is centered on supporting investors and management teams incubating and growing direct-to-consumer businesses. Most recently, in partnership with WHP Global, Rick was a critical resource in architecting the WHP+ platform, a new turnkey direct to consumer digital e-commerce platform that powers AnneKlein.com and JosephAbboud.com.

Watson also hosts a weekly podcast, Watson Weekly, where he shares an unbiased, unfiltered expert take on the retail sector’s biggest players.

In the past year alone, Rick has spoken at many in-person and virtual events as well as podcasts on topics ranging from retail/ecom to supply chain/logistics and even digital grocery including CommerceNext IRL, ASCM Connect, and Retail Innovation Conference.

https://www.rmwcommerce.com/
Previous
Previous

Buy The Runway - Rent the Runway’s Last Stand?

Next
Next

My Dad’s 10-3-1 Sales Rule