Instacart – Path to Sustainable Profitability for

Transcript:Instacart – Path to Sustainable Profitability for:
Instacart – Path to Sustainable Profitability for All Angus Cheung | Sunny Sun | Eden Sorrell | Raymond Franczuk Asper School of Business Presenting to: Fidji Simo of Instacart Niche to necessity Understanding the challenge Sustainable profitability Grocer Relationship Management Employee Satisfaction How can Instacart create sustainable profitability while improving their key stakeholders’ satisfaction? Challenges Problem Goals Leading the industry even after pandemic Healthy Grocer relationship Loyal and happy employees Enhance the value proposition for Instacart stakeholders by growing ad revenue and re-distributing value Our Recommendation $1b Ad Revenue 90% Grocer Satisfaction $7.3 billion profit over 5 years Empower Grocers/Retailers by Leveraging Market Data Improve InstaShopper Employee Benefits Grow Relationships with CPG Organizations 1 3 2 Online grocery market is picking up steam 10% of grocery industry COVID-19 acceleration Projected to reach 20.5% by 2026 in US https://www-statista-com.uml.idm.oclc.org/statistics/531189/online-grocery-market-share-united-states/ $1.5 trillion CPG industry Robust, mature industry ripe for transitioning & disruption Instacart must prioritize sustainable profitability and leverage the growth opportunities in the market Potential downturn post-COVID 300% YoY What is drives & holds back the stakeholders for Instacart? Consumers CPG Brands Investors InstaShoppers Motivations Reservations Income | Flexibility Benefits | Fair Treatment Convenience | Flexibility Costs Consumer Data Costs Profit Costs Grocers | Retailers Convenience | Data Control | Profitability Instacart must address and balance the key stakeholders’ concerns and reservations in its pathway to profitability The future will rely heavily on access to consumer data Uniquely position with its current core competencies & access to data to leverage Instacart can become a leader in data that benefits ALL of its stakeholders 3rd-party cookies phase-out by 2023 Data-driven ad industry AI & ML prediction trends Grocers & CPG brands will have limited access to data Where the money goes in online grocery order INSTACART EXPRESS $99 annual / $9.99 per month SERVICE FEES (alcohol) 5%-10% PICKUP FEES $1.99 for non-express IN-APP ADVERTISING $0.75-$1.25 CPC How can Instacart make the pie larger to benefit ALL stakeholders? Ad revenue presents an opportunity for Instacart & its partners $225 billion annual ad budget from CPG industry Projected $1 billion ad revenue in 2022 Undiluted revenue – new external source Higher margins than delivery service (80%) Instacart must leverage their existing data and advertisement position and redistribute value to all stakeholders New plentiful revenue stream that does not dilute profitability from our stakeholders Pathway to success for Instacart & its stakeholders Sustainable profitability Grocer