Instacart delivers pricing transparency
Instacart, the popular grocery delivery service, has partnered with more than half the retailers on its platform to guarantee its prices are the same as the ones a shopper gets in-store.
In a blog post, Instacart, available in 12 major cities, said it’s heard customers were seeking greater transparency around its prices. With Instacart’s "fully transparent model," a badge now appears on participating store sites explaining how prices compare.
In most cases, the badge will read, "Prices are same as in-store," meaning that the prices for that store’s items on Instacart are, on average, the same as the prices that retailer regularly charges in their physical stores. Instacart claims most prices are the same. For stores where the Instacart prices represent a markup, the badge reads, "May be higher than in-store." Clicking on the badge shows more detailed information, including an estimate of the average price difference.
In addition, a new Store Prices page explains who actually sets the prices that users will see on Instacart. In most cases, that is the retailer.
"One of the reasons that people use Instacart is because a lot of the prices have been the same as in the store and they can just pay a delivery fee," CEO Apoorva Mehta told Re/Code. "What we’re doing is making sure that everyone is aware of which stores are like that so they can make more informed decisions themselves."
Re/code noted the move comes as Instacart has shifted less on making money from markups to making deals with grocers to take a cut of sales.
Bill Bishop of the research firm, Brick Meets Click, said retailers will face some pressure to pay any fees involved to gain the extra online shopper business and also make sure their prices "are seen as competitive in the marketplace." But he added that competitive alternatives from Uber Essentials, Google Express, Amazon’s same-day delivery and others could soon arrive.
Among the majors, Whole Foods already had such a partnership with Instacart, while Costco hasn’t signed on. In Manhattan, for example, Costco’s prices are 15 percent higher using Instacart, according to a new disclosure on the site.
- Greater Pricing Transparency – Instacart
- Instacart Finally Tells You When It’s Charging You More Than Stores – Re/code
- Instacart brings transparency to prices – at a cost to retailers – San Francisco Chronicle
How important is a promise of “same price as in-store” for e-grocery services such as Instacart? Are retailers better off using third-party services for home delivery of groceries than doing it themselves?