First, I hope both are able to compete with Amazon as we need to balance the power that they have, if that is even possible. A $200 million cash infusion for Instacart is a lot of money but compared to the bank that is Amazon, not so much. The fact that Instacart has been able to build a relationship with some of the top grocers in North America is a big step in protecting their turf and in building even more of a footprint from there. I have to believe that in the case of Shipt and their parent, Target, they will have their own channel so to speak and will allow Target to stay in the game although I suspect they are and will continue to broaden their universe outside of Target in order to compete with both Instacart and Amazon. I worry that obesity in America will increase with all this free shipping though.

I think both Instacart and Shipt must focus on the pickers’ skills and, if they do, they’ll do fine. I personally use Instacart a lot and I think they need to improve two things: 1.) their technology (it’s insane that I have to ask for “no substitutes” on every single item instead of a global setting that says so, allowing the exception to be “okay you can substitute as needed”) and 2.) the expertise of their shoppers. I get tiny little stalks of broccoli sometimes that wouldn’t even make for a meal for one.

I’m saying this here, and I’ve been intimating it for some time: I think Amazon is coming down to earth. Price parity is being achieved, delivery times are really not “all that” for many third-party “Prime” shippers but, hey, they’re making money. Like a “real” retailer.

I look forward to continued health in the retail industry. And I hope we don’t experience an economic shock that damages that health.

If a I had to pick a winner at this point, I’d still put my money on Amazon over both companies for a variety of reasons ranging from capitalization to customer engagement. And if I had to pick between them, I guess I like Instacart’s chances a little better.

But I think the question misses the point.

Isn’t the real issue here that delivery is rapidly transitioning from a differentiated service offering to table stakes? As more and more companies enter this space, more and more customers will come to expect real-time delivery on everything they buy from canned goods to computers.

If this hypothesis is correct what started off as a value-added service will quickly evolve into a commoditized service and the most efficient provider in the space — likely Amazon at this point, will win.

Amazon has been setting the pace for fast and efficient delivery. Other retailers have to compete with that reality, among others, if they want consumers to use their online shopping tools. However, the last mile of delivery is not the only issue; it is part of a process. So the question is not whether these companies can compete with Amazon. The real question is whether these companies can help other retailers compete with Amazon. The online interface has to work well, products the consumers want have to be available, prices need to be competitive, the checking out process has to work well and delivery has to be efficient. All the pieces have to work well. Of course, companies that can do last-mile delivery efficiently are necessary for success in this endeavor.

Like for the cat who tasted real tuna, the canned version no longer works. Amazon has set the bar on expectations. Now everyone else needs to meet or exceed those expectations. Despite the funding and acquisition announcements, Amazon has a clear lead over these other online offerings. The value of these other options is they allow lagging retailers to get into the game. However, getting into the game or waging the table stakes does not guarantee success.

I don’t believe any of these contenders have truly solved the last-mile delivery problem for most consumers. In my area, none of the delivery services are operating yet and this is a fairly typical suburban area. The competition will be good for consumers and it will be interesting to see how each of these manages to differentiate. If nothing else, this tells us Amazon doesn’t have all the answers — yet. I wouldn’t bet against their deep pockets (or at least their willingness to invest while worrying about revenue and profit later) but while they used to have a clear advantage in shipping and delivery, that advantage has quickly eroded as consumers now expect fast delivery — all the time from every retailer. The grocery business is behind compared to other segments in my opinion, but given the amount of news coverage given these days dedicated to the segment I would say it is quickly changing as the top competitors all realize the potential business opportunity at stake. For my money, the first service that… Read more »

Competition is good. It requires everyone in the game to play a better game. Amazon has a system and now has the Whole Foods network to pull from. Then there is everyone else. And that’s a big part of the market. I’m betting that at some point Amazon will expand to support delivery of other grocery stores but for now, Instacart and Shipt have an opportunity to build relationships with retailers before that happens.

The broad range of products offered by Amazon and the inherent stickiness of their platform present substantial barriers to entry to Instacart and Shipt. Both Instacart and Target will need to invest substantial amounts of money to drive awareness, trial and repeat. I am a bit more bullish on Shipt, since Target offers a wide product range and has an established online as well as offline audience.

Competing against Amazon is difficult – any way you look at it. The one advantage that local retailers have against Amazon is local inventory. Leveraging a third-party delivery service that is focused on optimizing the processes for efficiency and costs is a smart strategy, as this is not a core competency for traditional retailers.

There are still several challenges that need to be solved for successful and profitable same-day delivery: efficient processes, accurate real-time inventory, cold chain break issues and cost effective delivery models. Retailers need to staff and train employees to efficiently pick and pack merchandise for orders, as this is a new role that you can’t just add to current employees’ responsibilities. Accurate real-time perpetual inventory is critical for same-day delivery and this has been a thorn in retailers’ side for years. Now it is a retail imperative — real-time retail is … real.

Lastly, shaving costs off the last-mile of delivery and strategically pricing the service at rate consumers will accept and is profitable for the retailer is essential for sustainable success.