Instacart expands in-store business to include ads

BLOOMBERG

Instacart will show advertisements on the high-tech shopping carts it sells to grocery stores, the latest addition to the company’s growing ads business and a sign of investment in products outside grocery delivery.
The company will begin advertising on the carts, which include self-checkout and are equipped with cameras and sensors to detect items, at Good Food Holdings’ Bristol Farms stores in Southern California before expanding to additional stores in the coming months, Instacart said Monday. The smart shopping carts, called Caper Carts, are available at retailers including Kroger Co and Wakefern Food Corp’s ShopRite and Fairway Market.
Instacart, trading as Maplebear Inc, has pitched investors on the strength of its high-margin ads business, which brought in a better-than-expected $222 million in revenue in its third-quarter results. Advertising accounts for about 30% of overall revenue, according to company filings. Growth in Instacart’s ads and enterprise businesses could help offset the macroeconomic pressures that have moderated growth in its primary online grocery delivery business.
Bundling advertising with its smart carts will also allow Instacart to market its ads business to brands even as shoppers return to physical stores. More than two-thirds of grocery sales are expected to still occur at physical stores in the next few years, the company said in its most recent shareholder letter.
Instacart expects brick-and-mortar purchases to be a mainstay for grocery sales.
“With Caper Carts we are expanding into building technologies for the store because what we believe is customers are not going to shop just online or just in store,” CEO Fidji Simo said.