Instacart has an online grocery store platform that is growing at an alarming rate! Last year, the company expanded from 30 to 99 markets in North America alone. Plus with the current state of the world, more shoppers are inclined to complete online shopping rather than put themselves at risk in-person.
From a business perspective, however, it’s important to understand how Instacart actually works. This is the key way that Instacart delivers value to its customers.
Let’s get started by determining how it works, and see if we can find some ways to measure this value.
What is the Instacart Algorithm?
To understand Instacart’s algorithm, it’s best to understand its business model. Examine the following steps to see how Instacart works for the modern consumer:
- First, download the Instacart app to your device.
- Choose a store. There are a ton of options here, like Whole Foods, Costco, Petco, and Rite Aid.
- After looking at each door’s inventory, select which items you want to add to your cart.
- Select a one-hour time window for delivery. Normally, groceries are delivered within an hour.
After you read through all of these steps to see how Instacart works, you can measure and predict the best ways to master the algorithm.
Instacart has two major objectives:
- Maximize the chance of finding the right products in a customer’s cart.
- Minimize any time spent getting the groceries.
When these two objectives work together, Instacart considers its business concluded successfully.
This is How You Master the Instacart Algorithm
Now that we understand how the business model works, see the following ways to master the algorithm, and predict how your brand can thrive through Instacart. This business has grown exponentially in the last few years, so it’s important to understand the way it works for the benefit of your own brand.
Determine How to Measure Demand
There are going to be cyclical and unpredictable demand trends, based on the consumers’ needs. For example, think of holiday time. During the week of Thanksgiving, there will be a ton of orders placed for food. As the holiday nears, the demand for these products will increase. Holidays are some of the best times to measure the demand for your brand.
If you sell products through Instacart, you can pre-order certain quantities for stock at partnered stores.
Calculate Delivery Fulfillment Time
After orders are placed in the 1-hour time frame, it’s important for Instacart to deliver those groceries at the time that they promised.
Actual Arrival Time = ETA + Prediction Error < Due Time
Food delivery fulfillment time goes hand-in-hand with the demand for groceries. Instead of Instacart using a platform like Google maps, they built their own map software so their employees can map out where to go efficiently. This is useful for those who associate consumer satisfaction with one-hour delivery.
Understand How Instacart Delivers & Instacart Delivery Routes
Instacart creates many different routes for their employees to deliver groceries. If one route doesn’t work, they can simply try the next.
Instacart uses quantile regression to make predictions. Instead of just using average times, Instacart considers variances that can happen in all the steps of delivery, including such challenges as inclement weather or road construction.
Measure Product Demand
Examine top-selling products to better understand which grocery store products typically have the highest demand on Instacart. You may be surprised at what you find. This helps businesses that are advertising on Instacart to more effectively manage inventory without needing to pause their Instacart ad campaigns.
Is your brand part of the reason why the demand for Instacart is so high? Take a look at your reports and see which products have been sold and which products have been decreasing in sales. Consider hiring an Instacart ads agency to manage your Instacart ads.
A/B Test
A/B testing has always played a huge role in optimizing product ads for brands.
Use this opportunity to see how the actions taken during testing reflect purchases and activity by the consumer. Without A/B testing, sellers might be left in the dark about the actual consumer demand.
The Bottom Line
Instacart can benefit your business if you’re selling food or personal care items, especially during the holidays in the middle of a pandemic. Understanding their algorithms can help brands determine the best course of action for success.
Let us know which methods you will use to understand the Instacart algorithm. We’d love to know your thoughts.
