TRANSCRIPT
Peter:
Welcome to unpacking the digital shelf, where we explore brand manufacturing in the digital age. Welcome everyone. Uh, as I said, Peter Crosby executive director of the digital shelf Institute here. Thank you so much for joining us for today's session of our digital first omni-channel strategy series on March 2nd, CNBC reported a new $265 million funding round for Instacart bringing their total valuation to $39 billion. Well, that money is going to go somewhere and the moves they make will transform them, your relationship and investment with them and the grocery consumer experience. So a lot's going to change. Luckily we have the woman who literally co-wrote the book on the challenges, opportunities, and likely evolution of this platform and how brands on Instacart can maximize revenue and minimize risk. Carrie masters, founder of digital marketing agency. Bobsled marketing is the coauthor of Instacart for CMOs, and we are super grateful to welcome her to the DSI. Hey Carrie.
Kiri:
Hey Peter. Thanks for having me great to be here.
Peter:
We're happy to have you here. Uh you'll you may note note the accent, uh, Carrie is in Australia. It's a midnight her time, so we are additionally grateful for her staying up, um, and closing out her day, uh, dropping some knowledge for the DSI community. So, um, before we start a reminder that throughout the session, please feel free to drop your questions into the Q and a window, and we'll get to as many of those as we can. It's it's welcome. So just send them out and then at the end, I'll pop back in and we'll, we'll get to the ones that we can, and we'll be sending a recording out to you a couple of days, following that you can share with your colleagues. Uh, so with that preamble, Gary, I'll let you dive right in.
Kiri:
Yeah. Okay, great. Yeah, we've got a bit to cover today, as you said, and we want to leave some time for Q and a at the end as well. So, um, as, uh, that would go back to my slides. Um, so it's great honor to be here. And part of this event, I'm going to be talking about Instacart's place in your omni-channel retail strategy. As Peter mentioned, um, I, uh, released a book last week with my co-author Stephen Jordan, who is, uh, also from my company bobsled marketing. And, um, this presentation today is based on the insights that we uncovered from, um, from writing that book. So looking forward to sharing that with you today. So first little story to tell is how a bottle of Serratia changed the grocery category. And this story takes place about a decade ago when people were already dating online, watching movies online and doing a lot of shopping online across categories like electronics and beauty products.
Kiri:
But one thing that people were doing every single week buying groceries was still largely done in brick and mortar stores. So a poor of a and entrepreneur with 20 failed startups behind him, uh, had an idea to change this paradigm off rifling up his empty fridge, um, with just a single bottle of Serratia hanging out at the back there. And that's where the idea for online grocery delivery came to him. It wasn't an entirely new concept. There was still, um, companies out there like pea pod and, and early days of fresh direct. But what he really wanted to solve for specifically was, um, was delivery time and to make that a really compelling proposition. So we fast forward a few months into the future and a pool of, uh, already had a prototype app built. And, uh, what I love about this part of the story is that on his first grocer, the first, uh, order place on his site on, on the app rather, um, a pool of actually delivered the groceries himself.
Kiri:
So a few years into the future around 2014, um, Instacart partnered with whole foods. And that was the biggest part of Instacart's business. And both, both, um, parties had a successful partnership there at a worldwide pandemic to that several years later. And we're talking about Instacart's, um, place in a brand's strategy. So I think this story, this, this surreptitious start a story is, is finished yet. There's lots of interesting developments ahead of us, um, and a huge one being, um, the likely IPO of Instacart later this year. So that's why we're starting from, um, in the agenda today. What I've got here is some of the topics from the book that brands were most interested in, in learning about and have been a big point of discussion as Stephan and I've made the rounds, um, presenting some of the findings from the book. So we're going to have Q and a at the end, like Peter said, if you've got some questions as I go through, please just pop, pop them in the chat.
Kiri:
And, uh, he will, he'll start organizing those as we go through. So let's jump right in just to give you a sense of, um, some of the brands and solution providers that we spoke with for the book. That was what I was happy with was we had a real cross section of both enterprise brands and, um, smaller brands, all of whom are working with Instacart and have their own perspective to share this. So, um, good cross section of, um, experiences that, so first of all, let's talk about what makes Instacart different from other marketplaces. And I would guess that most people on the call are familiar with Amazon and, uh, maybe even Walmart and some other marketplaces as well. And it's certainly worthwhile to initially draw some comparisons with other marketplaces as a starting point to understand the system and how it works. I'm going to get into how this works in a lot more detail shortly, but to summarize the, the core of it, Instacart is Instacart's business model, we would say is this unusual hybrid of last mile fulfillment and with a front end app that also holds no inventory.
Kiri:
And until Instacart, this would have been a complete contradiction, but, um, they have landed on a model that really works. So let's compare Instacart a little bit to the other big players in online grocery. If we look at what makes Instacart different, we were going to find some unique selling points. So one big distinction in that first column, the inventory relationship with all of the other players here, there is a one pay or three P relationship with inventory. So the, um, the platform has the inventory or holds it on behalf of the, um, the merchant Instacart has no inventory relationship. They don't have, they don't have any inventory on their balance sheet. Um, and it's all done through their retail partners. So, so appointment availability, um, pricing, that's all managed by the retailer. So that greatly simplifies Instacart's business model. There's no inventory to take care of their, um, clears up their balance sheet has some advantages there, but it has some downstream impacts for the brands that we'll talk about as well. Um, and another one that is of particular interest to brands is the pay whoops, paid search advertising. So we'll talk about this later as well, but we have found from speaking with brands and our experiences running, um, retail media at bobsled, that Instacart offers phenomenal ROI with their paid search advertising program.
Kiri:
Okay. So a key concept to understand here with Instacart, which is, um, foundational to figuring out how this is going to work within your company is the typical two-sided marketplace versus Instacart's four-sided marketplace. So with it, with Amazon and Walmart, you've got a two-sided marketplace where you've got buyers and sellers interacting through a platform. So an Amazon that will be the seller and a customer interacting on Amazon's platform. You even have first party relationships in first party, vendor relationships, it's Amazon and the customer, but it's still just a two way relationship with Instacart. There are full stakeholders in a four-sided marketplace. You've got the end customer who's shopping on the app. You've got the in-store shopper, who is that, um, full person running around a grocery store with a, with a beaded Brown picking your order and delivering it to your, to your home. You've got the retailers where the picking is occurring and the shopper is actually collecting from, and then you have advertisers who had, I think, you know, in all cases right now, brands who have products available on Instacart and want to meet these customers where they are shopping, where they are researching, um, brands and advertisers who want to be at that point of purchase.
Kiri:
So this is, this sort of helps to frame up the, the, the difference in the business model and what that can mean for, for brands who are looking to, um, initiate their Instacart channel. The difference is this retailer who is at this at the center of Instacart's business model.
Kiri:
Um, so that retailer being at the center of the business model has few key implications. One is that launching a new product or brand can be difficult because you product will only be available if retailers have them in stock. And, um, if they have them in stock and their feed is working correctly to Instacart a lot of retailers, um, inventory systems, um, uh, lacking, and even in cases where a product might be available in store, it might not actually show up on Instacart. So we're sort of working, that's, that's one challenge that brands have is working sort of with the constraints of the third party that you don't have control over, um, and working with whatever systems they have and working with whatever, um, sort of philosophical relationship they have with Instacart as well. That's, that's such, that's a challenge. Um, as I mentioned, product availability, some products won't be available if the retail is not stuck in that.
Kiri:
And then inventory, if you know, this can be on a couple of different levels, retailers ability to monitor their inventory at the store. And then also just whether they, um, they feed it through correctly with the inventory availability, just, um, if, if you are advertising on Instacart and that product isn't available in the geographical area, that the customers searching for those ads won't actually run. So that they're all fail safes built into Instacart system to make sure that you're not paying to run ads when you don't have inventory there, but it is still, um, it's still limitation that you have, if you don't know where your products are actually in stock or why that might be.
Kiri:
So there's a, um, there's sort of a, uh, what I call a dysfunctional love triangle relationship between retailers in Sakata and brands for that reason, it's a little disjointed and, um, and raises some, some, some questions that need to be addressed. So first of all, retailers, um, you might've seen in the media recently, there's some speculation that in psychology is gonna go and become a retailer themselves. Uh, we might get to this in the Q and a, I don't believe that that's the case, but there is certainly some, um, uh, wariness from retailers, uh, on that I'm first going to talk about reasons for retailers to, to work with Instacart and, and why it has been so widely adopted Instacart actually has partnerships with nine of the top 10 us retailers and through their partnerships reach 85% of the us population and 70% of the Canadian population.
Kiri:
So Instagram has done a phenomenal job of, um, of building relationships with retailers and their value proposition is a good one. Otherwise we wouldn't see that incredible cut-through. So here's why so many retailers have onboarded with Instacart. One, um, Instacart requires the required techno provides the required technology that retail is lagging behind on. Most retailers have not invested in, in home delivery technology, um, and infrastructure. So, you know, if you partner with Instacart, you can accelerate that whole program by by many years. I think Kroger is Kroger is the, um, the retailer who has invested the most in this initiative. They have 10, um, customer fulfillment centers that, uh, that, uh, uh, going to, going to facilitate, um, last mile grocery delivery to customers. But, um, those, those have been, those are very expensive facilities and they take a long time to come online. So if you can skip that, skip that whole process, or at least you can accelerate where you are very quickly without that huge capital expense in that, um, big time investment.
Kiri:
The last mile of grocery delivery is very challenging to get profitable. And this is something that Instacart, um, seems to have accomplished in Q2 of 2020. Um, they had a profitable quarter because, um, well they had had a profitable quarter. Uh, that was, that was a lot of those elevated, um, uh, volume going through the assistance, of course, but I think it proved the point that Instacart can get the business model operating profitably. And that's been a big challenge for especially grocery retailers in the past. It's very difficult to, um, to get that profitable. So there's various studies from, um, I think McKinsey and Bain have actually done studies into, you know, what's the different profit margins of, uh, retailers selling customers, selling product to a customer in the store versus delivering it to them versus having a third party like Instacart actually managed the delivery and, um, having a third party manage the deliveries, generally the winner there. So, um, best, best solution for a lot of retailers. And finally Instacart is where customers are transacting. You want to be, um, there's, there's already behavior built up here. It would take a lot of effort to move someone over to from, from Instacart over to your dedicated retailer app. And, um, so that's another reason for retailers to just, um, join, join forces with an app that already has a lot of traction.
Kiri:
As I mentioned, that there's still some tension here between retailers and Instacart for a fee for a few reasons, the wariness one is, uh, losing that customer connection. So if, um, that purchase goes through the Instacart app, Instacart's the one that has, that owns the relationship with the customer. They have access to their buying preferences, um, changes in shopping activity. And that's something that a retailer is just not going to have because they, um, they don't get to see all of that activity. It's all held by Instacart margin erosion, um, Instacart charges, a take rate to retailers, um, for each basket placed on the platform. It's up to the retailer. If they pass that fee onto the customer or not in the case of Costco, uh, I think Costco has always passed that fee on to end customers, um, which to offset, to offset the take rate, um, but a lot of retailers for whatever reason haven't done that. And so that five to 8%, um, take rate is really gonna hurt them on the bottom line. Um, vendor allowances and retailer ad spend in Japanese. So retailers, um, might be concerned that as brands shift, as brands start advertising more on Instacart, they going to take away the, the shopper monkey marketing budgets that they might have spent, um, with retailers. And these are vendor allowances that have been in place for a long time as well might also be in jeopardy.
Kiri:
So we're in a situation now where as retailers are maybe working with Instacart as a, as a bridge solution, because that's the fastest, most cost-effective way to, uh, access a at home shopper. But, um, I think some, some are really hedging their bets and they're out there building their own platforms and their own, um, uh, solutions. And, uh, I think that that is possibly an area that is an opportunity for Instacart is to actually offer a white label solution that, um, addresses both needs. So what does this, you know, what does all this, uh, relationship context mean for brands? Um, a few different things. One generally, if you're a brand operating a marketplace, you have direct control over pricing, assortment inventory, availability content, and that's not the case with Instacart, it's all managed by the retailer. So you ha now have this other stakeholder to understand and consider since they are the keeper of the keys with all of those important elements and depending on the size of your organization for a lot of companies, um, the e-commerce team doesn't really interact much with retail, uh, retail cost, uh, the retailers.
Kiri:
And so it requires a little bit more, um, involvement maybe from your sales team or national accounts team, and a bit more, um, planning, uh, how are you going to have those conversations and understand what are those retail partners, um, priorities and how are they thinking about Instacart and half we work together on some shared outcomes. The second thing is with retailers potentially building their own platforms over time. It's not going to be an overnight thing. As I mentioned, they're very costly. I think that looking at a couple to a few years out, there's going to be further fragmentation of, um, these, uh, uh, retail platforms. And so while we might be managing three or so, um, marketplace platforms today, as retailers build out their own platforms, you might be managing more like a dozen, so more fragmentation, more complexity, more, um, partners to manage if you're on the digital or e-commerce side of things, which, uh, the positive thing there is, you're going to be very busy and very much in demand. And your job is absolutely not going to go anywhere.
Kiri:
Let's talk about now demand generation and maximizing growth with Instacart's flywheel. How can you actually start generating results for your brand on, on Instacart? So, one thing that's, I'm going to state and restate a few times is there's a first mover advantage. The first mover advantage on Instacart is huge by a customer's 10th order, 25% of all conversions are from the, your items aisle. So items that that customer has bought before. So here's a quick sort of demo of how this works. You've got the in, within the app, you've got the, your items, aisle, things that you've bought before, and that, that purchases from those, uh, from that aisle, um, accelerate over time. So for that reason brands who invest in content advertising and the retail dialogue that prompts availability will, will win.
Kiri:
Into that flywheel a little bit more, what's going to drive those repeat purchases. Um, well one of them is, is the Instacart search algorithm, which, um, is driven by a couple of different factors. One is fulfillment and the other is search and personalization. Um, I assume availability is really important. So, um, influencing to whatever extent she can LATAM availability with free tailors and, um, and then Instacart's own assumptions around what those customers are interested in optimizing content. This is a tricky one because there is no direct way for a brand to update content. Again, it's managed by the retailer. Good news. There is, there are solutions like Salsify who do have an integration with Instacart that allow you to update product content. So that is, that is really great tool to have up your sleeve. Um, we do believe that there'll be a native way to update content in the future, but it's certainly not, um, available yet, um, promotions. These are they available promotions on Instacart coupons and delivery, uh, free delivery, um, promotions. These are all run as a managed service through Instacart and finally advertising Instacart performance advertising is sort of bottom of funnel, keyword targeted ads that are almost indistinguishable from organic results. Like I mentioned before, we see these creating, um, we see these offering really great role as compared to other channels as well.
Kiri:
So a quick story, this is, this is a client of Bob sleds gonna walk through this pretty quickly because we're running out of time. Um, this, you know, you can see the COVID pink here. This was a CPG brand, um, and their sales on Instacart, huge pate in the early days of COVID, but it really leveled out still wet fi elevated from pre pre COVID levels. Um, but as it was leveling out, they adopted a three month trial of Instacart advertising and were able to see, um, quite a nice bump towards the end of the year by initiating advertising. So we have seen, we've seen some good results from clients, and certainly the feedback from brands running advertising is very conclusive. That it's great ROI. Okay, well, we've got, um, maybe I could get a time check from, from, from paid or if I need to speed through the next section, how quickly I need to get through that.
Peter:
Hey, Carrie, we have probably, uh, we have like eight or so questions that we would love to get to as close as possible. So, um, yeah, you have another say six, seven minutes and we'll go over a little bit. So, uh, yeah, let's see for,
Kiri:
So nothing unique element of, of Instacart is that the it's typically the digital team running digital e-commerce team, running the ads, but you don't get any credits for that because the sales all show up in the, um, brick and mortar retail, P and L. So that's creates a little bit of a problem within companies as to who owns this channel, um, who gets credit for, where does the budget come from? Um, and so we now discussions with brands came across three ways that brands have, uh, managing this and the pros and cons. So I won't go through all of these, but Instacart orange by e-commerce can be good because there's that background of marketplaces there really understand digital advertising, what drives them, but there's no real in-depth understanding of supply chain relationships with retailers. And of course, Instacart when it's owned by the sales team has the exact opposite problems. Some companies that we spoke with have sort of a hybrid approach where the e-comm team owns the performance marketing KPIs and the sales team owns product related KPIs. And there's a lot more interaction between those two teams to get some shared outcomes up and running, because this is the ideal scenario.
Kiri:
Talked about what, um, you know, what, what does Instacart's business model mean for brands? And what's sort of, what's important to think about one, as I mentioned before, I really believe it's going to be more marketplaces, more platforms for you to contend with. So thinking early about, okay, if you've got two or three to manage now and, and, um, and things are breaking down, there's, there's going to be more of that to come. So some thought experiments there with, within your company around how are you going to handle, you know, when, when Kroger's Kroger really ramps up their, um, last mile shipping, um, program, how are we going to deal with that? So laying the laying the groundwork now is really important to that point, these competencies that you're going to either build internally or look for outside, um, strategy and implementation guidance on. And finally technology is really required to play, to help manage some of these outcomes.
Kiri:
So I mentioned Salsify as being, uh, I think the only, or one of the only tools that's going to allow you to update product content. You're also going to need to look to towards technology to met, to, to identify those supply chain gaps, where retailers are not, um, there's, there's low availability or no availability across different regions, so that you can query that with your retailers, if, if they're supposed to have availability there. So lots of technical technology, technology solutions out there that can address some of these challenges that we're going to have. Um, there are a lot of things that you need to think about as a brand, as, as to what comes next. We talk about them in a lot more detail in the book of I've popped a bunch of them up here. Um, I'm not going to be able to go through all of these in detail, but one that I would pick out is, um, investing in featured products, advertising campaigns, as early as possible to get the full advantage of that repeat purchase flywheel, get in the shoppers cart, um, so that you can take advantage of the, um, the, your items, um, selection in, in someone's caught later on.
Kiri:
So finally, if you want to, um, dig more into, to what we uncovered, uh, in the book here, it's available on Amazon as a Kindle and paperback version, you can also connect with myself or my co Stephan on LinkedIn. That's where we're most active, and now we're ready for Q and a PETA,
Peter:
Gary getting ready. You know, some of these questions, it's hard for me to tell whether some of them may be at a level of detail on Instacart that you, you may not be completely acquainted with. So I'm going to throw it out there. And then do you let me know whether it's, um, sort of covered in your book and your expertise, but Laurie Rouse asked a question. My client's biggest challenge with their catalog of products on Instacart is that the PDP content being sent from their API is not accurately displaying on many retailers, storefronts. Those retailers who are not using the accurate brand product UPC is Instacart tells us they cannot do anything about this. They have to reach out to individual retailers to ask them to use official UPC is it's a big task. Is this anything that you have sort of insight into? Uh, is there something more proactive and start can do on their side of things to ensure official UPC is, are sent by retailers? And I think we'll have that question. So I was wondering if that was something you had.
Kiri:
That's interesting. I, I, I haven't had that question before, but I can say what the issue is because, um, when, uh, uh, Rachel on boards with Instacart Instacart charges that are set up fee and the retailer provides some kind of feed and Instacart, um, you know, massages that data and uploads it to their system. And then it's, it's kind of done. There's not an ongoing, um, you know, update, update process. So I think, you know, from, from, uh, one potential solution is, is to look at Salsify and see what is possible with updating product information there. But if the UPC codes are actually incorrect, and that is that, that is a matter that you'd have to take up with the retailer because they have provided incorrect product information to Instacart in that instance. And, um, that, that you're not going to be able to fix that with, with satisfy to my knowledge.
Peter:
And as I'm kind of representing the digital shelf Institute here, I don't want to go too far for myself onto the Salsify side, but I will, um, reassure anybody that in the chat said that they would like more information about sort of how the Salsify things work. Cause I'm not an expert on that either. Um, we will, we can certainly have somebody reach out to you to be able to answer some of your questions about either the process or what can be updated across the, because I know across the connection, cause I know that can vary. Um, and I was sort of, I put in an answer which you should see, um, about sort of just generally that you can, you can do it. Uh, the retailer sets up the initial product set up and then from then on, you can get, um, the rest of the listing updated, but I should leave the, any more detail on that to somebody from Salsify. So I think in the follow-up, we'll certainly track, uh, if you asked a question, if anyone else wants to, um, to, uh, to talk to somebody, please, please let us know. We'd be happy to do that. And, um, and also I will pass this issue along to our Instacart partnership team to make sure that that's a painful thing that's on your mind, uh, and sort of, uh, provide kind of a, uh, pressure from our side as well to get this issue addressed.
Peter:
Um, we have a question here. What have you seen as best in class in terms of manufacturers budgeting for Instacart without spend being duplicative incremental the trade already spend with retailers? Has anyone been successful in shifting from current retailer funding?
Kiri:
Yeah, this is, this is a great one. And this, this is why I wrote this book with Stephan because his background is all in, um, retail media and paid search. So I wish that he was here to address that question, but I think what we've found is, um, certainly during COVID a lot of, um, budget that would ordinarily be spent in shopper marketing and retailer initiatives has moved over to Instacart. Um, another rule of thumb that we've seen companies use is pulling allocating 10% of their usual, um, marketplace spend to Instacart as a, as a test initially. And then over time, you know, if that 10% is performing, then it usually finds its way into business as usual advertising budget.
Peter:
Got it. Um, the next one, uh, again, uh, let me know what you know about this Instacart recently did away with coupons. Do you know if they might be reinstating them at any point or if they might add new types of promotions? They haven't given us any info on either question.
Kiri:
Hmm. I am not familiar with that change actually. Uh, I do know that there are, um, as, as we saw with featured products, that was initially a program that you had to, that was a managed service offered through Instacart, and it was eventually rolled out as self-service and there are other promotion, uh, you know, advertising promotion types that we expect will eventually become self-service in the future, like banner advertising. Um, and I would assume that coupons and delivery promotions would also be part of that feature set as well. I don't have any official word on that. That's my speculation. So I'm surprised that coupons have, um, yeah, perhaps it's a short-term thing. I'm not sure. I can't definitively answer that.
Peter:
I'm going to sort of merge a couple of competitive questions together. Um, how fearful should Instacart be of Kroger's investment and rollout of a condo. And there was a question about the, uh, comparison of Instacart and, and Uber, w w uh, sorry, let me find the exact, an Uber grocery. Any thoughts on those?
Kiri:
Yes. So Kroger is, is the company who's, um, building 10 consumer fulfillment centers, huge expense, you know, hundreds of billions of dollars and years. And as of time to take that, to bring that online, they've done that in partnership with, uh, Cardo as the, as the, um, the Q and a question ask of post post, um, D is Instacart, um, nervous about that. Well, it is a threat to Instacart's business model. They exist as a interface between retailers and shoppers, and if every retailer suddenly goes out there and builds their own app and their own last mile delivery capability, then yeah, that puts business model. It threatens it. I will say that the loyalty right now is to Instacart rather than the retailers. There was a study that we cited in the book from Barclays equity research, which found that there's only two retailers who, um, shoppers customers would leave the Instacart app for if they weren't, if those retailers were no longer in Instacart and that is Costco and sprouts for every other retailer, customers would substitute that retailer for someone else.
Peter:
Do you feel like that's because of Instacart's experience or just it's convenient and consumers have begun because they like being able to go to one place to sort of shop amongst different retail, but is the, is the shopping experience inspiring? Could that be, uh, I'd love your thoughts on sort of,
Kiri:
I think it's both. I think that there's a lot of trust of Instacart and why is that? Well, you get your groceries in two hours and, and there's, if there's enough good experiences, you start to you trust that service to deliver. Um, and other, other, other retailers and platforms may have been less reliable in the past. And the other is the app is really good. And, and a lot of development's gone into that. Obviously a lot of development has gone into order routing and making sure that you get your groceries on time and that you're given, um, appropriate like estimates of when your order is going to arrive. So that, again, that kind of technology comes at enormous development costs. And it's not something that anyone could just go out and replicate right away.
Peter:
Yeah, I think, I think it was Jason Goldberg, uh, from publicist publicists who posted on, on LinkedIn the other day that he rattled off the list of top, um, top executives at Instacart. And they're all technology and add people like th you know, they're, they're, they don't have a bunch of grocery guys or, or women on their, their top executive levels. It's about making digital experiences.
Kiri:
And I will note, we've talked a lot about grocery, but Instacart's made a very, um, consistent effort to push into other categories as well. So, um, so flora, CVS best buy, you know, moving, moving beyond grocery into other, into other verticals as well. So I think that that's, that's going to be a big move for them. We shouldn't just talk about grocery, right.
Peter:
Um, this is a category specific question from Sabrina. Do you have any digital strategy advice for Bev alcohol brands advertising on Instacart?
Kiri:
Yeah, this is, this is, it's an interesting one. My understanding is that, um, Instacart presents a good opportunity for liquor brands, um, because there, because, um, the licenses, uh, held by the individual retailers, I believe that that makes it less restrictive to advertise on Instacart.
Peter:
Got it. Um, there, uh, Oh, I've, we've gotten notes in the chat that coupons have not been eliminated. So it just,
Kiri:
Yeah. So you might want to put, push back on whoever got that information pushed back on that
Peter:
Someone just asked. One of the issues we have with Instacart is the lack of visibility for which a retailer, uh, for which retailer or consumer is purchasing our product. Have you heard of them opening up their reporting capabilities to share more insights, to understand where Instacart purchases are coming from?
Kiri:
Yeah, this is a, this is a big question. And, um, unfortunately the answer is that that information is, is locked up and kept far away from any advertiser. So Instacart doesn't give that information to, to any appetizer Instacart has, um, with the analytics, they, they dish it out according to how much you spend on the platform relative to your sales. So if you're spending, um, you know, this, this three T is if you'll spend, you know, if your sales are a hundred million a year, and you're only spending a million a year in advertising, you're not gonna get a lot of data back if you're spending a hundred million a year and sorry, if you're generating a hundred million a year and you're spending 20 million a year on ads, then you're going to get more analytics back. But in none of those tiers, do you get to understand where which retailer is generating those sales and you don't get to target by target ads by retailer, either. This has to do with Instacart's relationship with retailers and wanting to keep, um, I, my perspective is wanting to keep those retailers on, on side.
Peter:
Got it, got it. Yeah. Data. And how it's shared from retailers is going to be a continuing conversation. Carrie, I just want to give you one last question before I let you go. Um, just when you, you know, reading the tea leaves and, and obviously you can't disclose anything that's confidential, but what do you think is, as we think about 2021, what's next for Instacart advertising, you know, there are new features and new campaign types. Is there anything you can disclose today before we let you go?
Kiri:
Um, yeah, so I I'll, I'll speculate on what I think is next. And as you said, Peter, there, uh, lots of executives from Amazon at Instacart and the top, the top, um, advertising guidance to cart was from Amazon as well, SF to list. So I think that we can, I assume that a lot of Instacart's future advertising developments are gonna follow a similar playbook from Amazon. So looking at that, what kind of ad product do we have right now? It's keyword targeted keyword targeting only similar to a sponsored product ad placement on, on Amazon. That's great for direct ROI, um, bottom of funnel, et cetera, but Instacart currently doesn't have anything at like self-serve in the middle of funnel, top of funnel awareness marketing bracket, and they've got all this valuable real estate, Elise shoppers coming onto their platform. I think that, um, launching display or banner advertising or something more middle of funnel, something more consideration oriented will be one of their next moves.
Peter:
So it sounds like Stacy actually had just asked a question a minute ago, any advice on best advertising tactics with Instacart on getting grocery products into cards, banners, coupons. It was like, there's a, so one, if, if there's any additional thing you want to say, but it sounds like some of the, that sort of stuff is, is on its way. And, uh,
Kiri:
Potentially, so one, one thing that you can do right now is combining coupons with ads. So that is going to work work really well. If your goal is to get products into carts and into your items, lists and coupons plus feature, product ads have been, um, a winning strategy for a lot of brands that we've spoken with.
Peter:
Great, well, Curie, uh, thank you so much for, for bringing this new research and your book, uh, onto the, on about Instacart, uh, to the audience. You know, having read it, cover to cover, I really can recommend it. It's, it's really new thinking. Uh, it's available on Amazon. We'll put a link to it in the, in the email that we follow up with, along with the recording, uh, for the, for this, um, for this session. And as I said, for those of you that, that had, um, platform specific questions on the Salsify side, uh, we'll make sure that we reach out and, and try to make sure you get your answers, because I know it's a thick at navigating all of these retailer requirements and the different ways that they load in content. And, and, uh, so we'll, we'll try and get you the answers that you need. So Carrie, thank you so much a for staying up so late, but B for writing a, a really needed book and putting it out into the market right now and sharing it here. Thank you.
Kiri:
Thanks Peter. Great. Great to see you again.
Peter:
So that closes this out. Uh, thanks to all of you for coming. Thanks as always for being part of our community, have a great day.
