ServiceReview: Instacart

I just tried Instacart, an online grocery service. It's been 20 years since WebVan so maybe it'll work now. People are more used to this kind of thing.

The user experience is awesome. I don't like apps so I didn't load that, but their website is very functional and fast both on the phone and on my desktop. I got regular updates via text, and I had to approve a special order in real time. All went perfectly smoothly. My order arrived in less than two hours. If you are in a hurry, I highly recommend it.

Instacart's model is fixed pricing for many items. For example, it's $.29/banana. From an ordering perspective, this makes perfect sense. You eat bananas one at a time, not by the pound. Broccoli is $2.39/crown, which is rather high, and explains their pricing model: markup.

Broccoli at King Soopers, where I shop, is $.99/lb. A crown weighs about a pound so the markup in this case is 140%. That seemed to be the worst offender in my order of 18 items today.

The average markup seems to be 33%. The milk I normally buy is $3.59 for a half gallon, and Instacart charged $4.79 (+33%). Bananas are about $.60/lb and weigh about 5oz so $.29/banana is a 50% markup. The steak I bought showed $18.04 on the package, and cost $22.22 (+23%). Small lemons cost me $1.29/each, and normally they sell for $1, but often, they are on sale for $.50/each.

That's another key factor on the pricing: loyalty discounts. Normally I'll save about 10% on my grocery bill with a loyalty card. My kids' school gets a 5% donation for all that I spend when I use King Soopers cash cards. In addition, King Soopers gives you 2% towards fuel, which is conveniently located in my shopping center and offers market rates. The total benefit if I do the shopping myself is -17% vs +33% for Instacart's markup.

There's also $6/delivery. You can mitigate that by signing up for Instacart Express for $15/month (cancel any time). Even then, it's about 1.5% of my typical grocery bill ($900/month).

Unlike Uber, they build in a tip into the price. You get to choose, but it defaults to 10% of the order estimate. Do I need to tip? I'm guessing so, because they build it in. I know that Lyft drivers prefer Lyft over Uber due to Lyft's tipping policy.

All said and done that's about 60% markup ($540/month) over what I'd pay if I went to the store myself. For me, it's worth it, because my time is at least $60/hour. I also don't own a car so I either bike (+1 for exercise) or borrow my partner's car (-1 for coordination). In either case, that adds extra time, since I work out of my house, and can't shop on my way home from work.

Since I use a shopping cart program -- Our Groceries, which is awesome -- so using Instacart is a bit of a wash. I can add items just as easily to Instacart. Therefore, it really would save me a lot of time.

However, $540/month is a lot of money just for grocery shopping. On Task Rabbit, I can get someone to shop for me for $20/hour. Even assuming 2hr/week, that's $160/month. I'd give them my King Sooper's cash card and loyalty number so I'd get all the financial benefits of shopping on my own without actually having to go.

It's not as convenient as Instacart, but I'm pretty organized when it comes to grocery lists so it's probably as convenient for me. If you aren't a planner, Instacart can be a life saver.

Via Rob 06/01/2016