Baltimore Sun

Instacart CEO says online grocery shopping will grow

- By Dee-Ann Durbin

When the pandemic hit the U.S. last year, grocery delivery company Instacart became a lifeline for millions of consumers. Sales volumes skyrockete­d; in one month, the company added 300,000 drivers to keep up with its orders.

“We saw five years of growth packed into one year,” Instacart CEO Fidji Simo said.

Demand has waned this year but remains above pre-pandemic levels. San Francisco-based Instacart — which is a private company — expects to see double-digit transactio­n growth this year.

But the company — which offers delivery from 55,000 stores in the U.S. and Canada through its 500,000 contract workers — is also trying to expand in other ways, like offering advertisin­g services and non-grocery delivery from stores like Dick’s Sporting Goods.

An initial public offering is likely in its future.

Guiding Instacart through this new normal is Simo, a former executive at Facebook who joined Instacart’s board in February and took over as CEO in August. Simo — the daughter, granddaugh­ter and great-granddaugh­ter of fishermen — says Instacart appealed to her because its mission is feeding people.

Simo spoke about Instacart’s future. Her comments have been edited for length.

Q. How would you describe the changes Instacart has seen over the last 18 months?

A. Grocery is one of the largest segments of commerce but it’s only 10% penetrated online. And we think over the next five years, it’s going to get to 20%, 30%, like most other commerce segments. I would say that, before the pandemic, many weren’t even aware that a service like ours existed. And that has been changed forever.

Q. Instacart is the U.S. market leader for grocery delivery, but it’s facing a lot of competitio­n. Uber Eats and DoorDash have recently added grocery partners. How will Instacart remain on top?

A. Any attractive market will always attract a lot of competitio­n. And to a certain extent, I’m glad that there’s a lot of attention on online grocery right now, because that’s making this behavior just much more democratiz­ed. I would say that in terms of the competitio­n, what we’re focused on is really being the best partner to all retailers. That’s why pretty much all of the top retailers are on our platform. And that matters enormously, because when you talk to customers about what they care about when it comes to buying online, they care enormously about selection and they care enormously about their loyalty to particular retailers.

Q. Instacart’s ad business — promoting products on its site from food companies like Kraft Heinz — tripled in revenue in the first part of this year. Why is that business so critical for Instacart?

A. It’s an important part of the consumer experience. We think that, through advertisin­g, they’re going to be able to discover brands they wouldn’t have discovered otherwise. But it’s also an important part of our business model because it allows us to make the service cheaper for consumers and charge grocers less.

Q. Prior to Instacart, you spent a decade leading developmen­t and strategy for the Facebook app. What lessons from Facebook are you bringing to Instacart?

A. I’ve always been fascinated by complex marketplac­es. Facebook was one and certainly Instacart is one as well, a four-sided marketplac­e between consumers, shoppers, retailers and food brands. And I think this ability to think in terms of ecosystems and how to balance all the sides of the marketplac­e that I learned at Facebook is serving me well at this job.

Q. You recently announced that you are co-founding Metrodora, a clinic and research foundation in Salt Lake City that will study, diagnose and treat complex neuroimmun­e disorders. Why is this issue so important to you?

A. Right after my pregnancy, I started having a lot of weird symptoms, including fainting. Sadly, I wasn’t diagnosed at the time. After many, many months of tests and probing, I was diagnosed with postural orthostati­c tachycardi­a syndrome, abbreviate­d as POTS. It’s a neuroimmun­e condition, which means that it impacts both the immune system and nervous system. I’ve been incredibly lucky to have access to the best doctors and to find great treatments. Despite that, it took me close to five years to be diagnosed.

 ?? JORDAN STRAUSS/INVISION ?? Instacart CEO Fidji Simo.

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