The Golden Knights Clarkson University Reh School

Transcript:The Golden Knights Clarkson University Reh School:
The Golden Knights Clarkson University Reh School of Business John Molson MBA International Case Competition 2021 Case 3 Christina Chapman Willem Kurdziel Patience Robinson Abhi Tripathi ‹#› Instacart, a digital grocery service, which helped shift shoppers from supermarket aisles to smartphones, is now making a push into selling online advertising but the question is, will this new evolved business model be sustainable? Grocery Delivery Service Only Grocery Delivery Service & Online Ad Inability to turn consistent profits given continued rise in transportation and labor costs Squeezed profit margins Food and consumer brands spend on digital advertising is projected to continue to grow (~32% growth YoY 2021, further expected growth 17% 2022) Established footprint Significant Market Value Growth YoY ($265M new investment in 2021 driving a market valuation of $39M) Diversified Portfolio- More retail partners = larger product footprint and offers non-CPG brands a place to market their goods (Over 500M products and expanded partnerships with new retailers beyond grocery) OPPORTUNITY! Europe is the most attractive market to penetrate next Similar demographic as North America Personal transport is common Expands grocer customer base Already well established in existing grocery stores and supermarkets: ALDI Walmart ‹#› Global Expansion ‹#› Instacart Shoppers as Business Owners Current State: Customer places product order in Instacart app- limited to separate orders per store Random shopper is assigned to shop order Random individual is assigned to deliver order (could be different individual from shopper) Forward Looking Strategy: Empower Instacart shoppers to become their own business owners! Every Instacart shopper sets their own fees, hours, and stores Ability to select the same shopper again and again Ability to receive multiple deliveries from different stores from one shopper Result Result Inconsistent delivery services Unsatisfied customers/Potential for customer loss Consistent delivery services Repeat customers/ Ability to build strong relationships between shoppers and customers ‹#› Smart Shopping Carts - Caper Acquistion More Efficient Shopping Avoid Check Out Lines In-Store Navigation Check-Off Shopping Lists Better Customer Experience More Trips per Day for Instacart Shoppers Data Acquisition Shopping Behavior Additional avenue of data for Instacart Better understanding of customers Leverage digital ad business Better lay out stores Cut Down Costs Reduce labor costs Better Manage Inventory Less front-end workers Efforts can be allocated to store maintenance and customer service Reduce carrying cost and waste from unused inventory Competition Amazon Brick-and-Mortar Stores with Similar Tech Smaller grocers will be able to compete in the