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Instacart has raised another $200M at a $4.2B valuation

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Re: Instacart has raised another $200M at a $4.2B valuation

#71

Post by colmvp »

octernion wrote: post #68
rmaus wrote: post #64

Earlier quoted context omitted.

I don't have stake in this one way or the other, but will you argue in favor of Instacart's '$10 service fee' (as mentioned by parent commenter)?

i am not entirely sure what they mean by that. the service fee goes 100% towards the shopper fleet and is an essential part of a reasonable compensation structure for all of our shoppers -- if we switched entirely to tips, the folks that (e.g.) actually picked out your groceries, checked out & staged your groceries at the store, would not be compensated. this is because tips have to go 100% to one person, which would…

I suppose OP's point wasn't that a service fee wasn't justifiable, just that it's a bit odd to make it optional and have it auto-selected, though given someone else's comment it seems like now it's mandatory.

Re: Instacart has raised another $200M at a $4.2B valuation

#72

Post by octernion »

petra wrote: post #70
octernion wrote: post #56

Earlier quoted context omitted.

as an engineer at instacart, it's very disheartening for me to see the top-rated comment on HN is "I can’t wait for instacart to go out of business." even if we did not provide value to you (which i apologize for -- it is a priority of ours to improve the replacement experience in particular as it is very frustrating to customers), i am not sure why that implies that we do not provide a valuable service for others an…

>> why do you think that there can only be one victor here, and that is has to be amazon? Historically, online businesses have 1/2 winners that "take all". That's assuming the winners could build a warehouse near each city. seems possible. So the question who will be the one besides Amazon? From one point of view. Walmart will likely win in the low-cost grocery pickup business. And on top of that they will do deliver…

groceries are unlike pretty much every other online segment, which is why it has resisted being moved online (until very recently). the model of having a warehouse simply "near" a city is a model amazon has tried for 10+ years without success -- you must have many warehouses within the city to make it work.

i am not entirely clear how you arrived at "Does instacart fit ? it seems not.", so it would be good to understand that. we have spent 5 years with hundreds of engineers building a fulfillment/logistics network just for groceries that any grocer can just leverage off the shelf.

Re: Instacart has raised another $200M at a $4.2B valuation

#73

Post by [deleted] »

octernion wrote: post #66
kayhi wrote: post #61

Earlier quoted context omitted.

Never used Instacart, but your link to show transparency, doesn't actually state what the mark up is.. 2%, 10%, 25%, order minimum or there's fee.. Transparency to me, would mean I place order and know how much it will cost, instacart mark up, service fees and if a tip is included.

we used to provide specific percentages, but phased that out over time as it was obvious that wasn't providing real value -- where on amazon.com do you see their markup? additionally, for virtually all stores on instacart.com now, we are simply passing on the pricing that the retailer has given us (which may or not be marked up from their internal prices -- but we do not control) edit: to be crystal clear, that means…

[deleted]

Re: Instacart has raised another $200M at a $4.2B valuation

#74

Post by octernion »

colmvp wrote: post #71
octernion wrote: post #68

Earlier quoted context omitted.

i am not entirely sure what they mean by that. the service fee goes 100% towards the shopper fleet and is an essential part of a reasonable compensation structure for all of our shoppers -- if we switched entirely to tips, the folks that (e.g.) actually picked out your groceries, checked out & staged your groceries at the store, would not be compensated. this is because tips have to go 100% to one person, which would…

I suppose OP's point wasn't that a service fee wasn't justifiable, just that it's a bit odd to make it optional and have it auto-selected, though given someone else's comment it seems like now it's mandatory.

i know there has been a lot of changes with that recently -- i agree also that is odd. there are a ton of legal nuances here that i do not want to get into, but suffice to say we want to be clear and transparent to customers while at the same time providing a compelling wage to all the folks who touch your order during any part of the lifecycle.

Re: Instacart has raised another $200M at a $4.2B valuation

#75

Post by elithrar »

dangrossman wrote: post #63
ssewell wrote: post #49

Earlier quoted context omitted.

Amazon Prime Now is already starting this ( https://goo.gl/fSF4DR ) in select markets. I used this last weekend and the delivery was perfect! You can opt to have an out-of-stock item either left off or replaced with a similar item. They will even send an SMS to request confirmation if they need to use a substitute product, giving you an opportunity to provide more feedback.

That's exactly how Instacart works as well. The shopper is able to call or text the customer to discuss substitutions.

Correct - as well as choose from "best replacement", "replace with specific item", and "don't replace".

Since Instacart remembers these choices across orders, I've found this useful for making sure I get what I need.

Re: Instacart has raised another $200M at a $4.2B valuation

#76

Post by trs80 »

octernion wrote: post #56
clay_the_ripper wrote: post #14

I have never had a good experience with instacart. I’ve ordered from them probably 10-15 times and every single time, without fail, they either forget an item or replace an item with another item that I don’t want. This makes the service unusable, because if I’m cooking dinner that night and want to order instacart, there’s a high likelyhood I’ll be missing something crucial for my recepie, meaning I’ll have to go to…

as an engineer at instacart, it's very disheartening for me to see the top-rated comment on HN is "I can’t wait for instacart to go out of business." even if we did not provide value to you (which i apologize for -- it is a priority of ours to improve the replacement experience in particular as it is very frustrating to customers), i am not sure why that implies that we do not provide a valuable service for others an…

Isn't it illegal to offer a "store credit" instead of a refund in cases where IC forgot my items and I paid debit? Seems like a really shady way to bring customers back.

Don't get me wrong, I enjoy the whole concept of online ordering but the IC UI forces users into choices that benefit IC by default.

Re: Instacart has raised another $200M at a $4.2B valuation

#77

Post by cmclaughlin »

octernion wrote: post #56
clay_the_ripper wrote: post #14

I have never had a good experience with instacart. I’ve ordered from them probably 10-15 times and every single time, without fail, they either forget an item or replace an item with another item that I don’t want. This makes the service unusable, because if I’m cooking dinner that night and want to order instacart, there’s a high likelyhood I’ll be missing something crucial for my recepie, meaning I’ll have to go to…

as an engineer at instacart, it's very disheartening for me to see the top-rated comment on HN is "I can’t wait for instacart to go out of business." even if we did not provide value to you (which i apologize for -- it is a priority of ours to improve the replacement experience in particular as it is very frustrating to customers), i am not sure why that implies that we do not provide a valuable service for others an…

Overall I really like Instacart and quite frankly, I've come to depend on it. Shopping with kids is difficult... it's much easier to plan ahead and shop when I have a little free time. So congrats on the funding!

I understand some of the frustrations about replacements. Originally the shoppers were pretty good about calling. Recently the app was updated for 1-1 chat and interactive replacement choices. However, it seems the shoppers are to busy to use the feature... I've had a few notifications for replacements, only to click on it and find the shopper has already checked out.

Personally, I accept that limitation of the platform and make sure I choice "no replacement" if there's any chance I'll be disappointed.

Re: Instacart has raised another $200M at a $4.2B valuation

#78

Post by notyourday »

clay_the_ripper wrote: post #14

I have never had a good experience with instacart. I’ve ordered from them probably 10-15 times and every single time, without fail, they either forget an item or replace an item with another item that I don’t want. This makes the service unusable, because if I’m cooking dinner that night and want to order instacart, there’s a high likelyhood I’ll be missing something crucial for my recepie, meaning I’ll have to go to…

Instacart is going to get slaughtered. If it was public, it would be in a GTZ (Go to Zero) basket. Its business has a critical flaw that was only kind of workable when Amazon did not own WF.

Amazon WF same day delivery would be picked from WF stores by the people who work in those stores and are trained in those stores, not Joe Random Gig Worker who does not know how swiss chard is different from the rainbow chard, and AMF would do it for no markup to WF price.

Vertical integration in the last mile grocery business would crush anyone who is not vertically integrated. The only way for non vertically-intergrated Instacart to complete is to pivot into SaaS business selling its platform to the independent store operators for something like $1 per order but there's just no way $1 per order software platform would command that valuation.

Re: Instacart has raised another $200M at a $4.2B valuation

#79

Post by tfehring »

octernion wrote: post #56
clay_the_ripper wrote: post #14

I have never had a good experience with instacart. I’ve ordered from them probably 10-15 times and every single time, without fail, they either forget an item or replace an item with another item that I don’t want. This makes the service unusable, because if I’m cooking dinner that night and want to order instacart, there’s a high likelyhood I’ll be missing something crucial for my recepie, meaning I’ll have to go to…

as an engineer at instacart, it's very disheartening for me to see the top-rated comment on HN is "I can’t wait for instacart to go out of business." even if we did not provide value to you (which i apologize for -- it is a priority of ours to improve the replacement experience in particular as it is very frustrating to customers), i am not sure why that implies that we do not provide a valuable service for others an…

Saying “we charge markups, but we won’t tell you what they are” is still not sufficiently transparent, in my opinion. Yes, Amazon and grocery stores do the same thing (at face value, anyway) by not disclosing their COGS. But the key difference is that my next-best alternative to Instacart is to just go to the grocery store myself. My next-best alternative to getting something delivered from Amazon isn’t to get it more cheaply from a brick-and-mortar Amazon store, or to buy it directly from their suppliers - it’s to get it from a different retailer entirely, and I can trivially compare all-in prices between other retailers and Amazon. So I can easily assess whether it makes sense from a cost/benefit perspective to buy something on Amazon, but I can’t make the same assessment for Instacart.

I do think the service creates value. But I still hope that, at the very least, it soon faces enough competition that it’s at least forced to be fully transparent about the cost of its service. I want to see one number - the difference between what an order of groceries costs me on Instacart all-in, and what it would cost me to go to the grocery store and purchase the same items myself. As long as I can’t trivially find or calculate that number, I won’t use Instacart again.

Re: Instacart has raised another $200M at a $4.2B valuation

#80

Post by ssharp »

octernion wrote: post #72
petra wrote: post #70

Earlier quoted context omitted.

>> why do you think that there can only be one victor here, and that is has to be amazon? Historically, online businesses have 1/2 winners that "take all". That's assuming the winners could build a warehouse near each city. seems possible. So the question who will be the one besides Amazon? From one point of view. Walmart will likely win in the low-cost grocery pickup business. And on top of that they will do deliver…

groceries are unlike pretty much every other online segment, which is why it has resisted being moved online (until very recently). the model of having a warehouse simply "near" a city is a model amazon has tried for 10+ years without success -- you must have many warehouses within the city to make it work. i am not entirely clear how you arrived at "Does instacart fit ? it seems not.", so it would be good to underst…

I think he's saying a customer will ask "is Instacart cheaper than Walmart" and the answer is "no", so there isn't a place for Instacart to fit, assuming Amazon owns the high-end side with Whole Foods (although I wouldn't assume Amazon would settle for just that).

Walmart already has grocery warehouses with their stores, so bolting on pickup/delivery to those makes sense. I don't know how much pickup/delivery could potentially negate the need for the store, but I'd assume the pickup/delivery load of a store has huge room for growth before you start questioning why the store needs to be open to the public.

I haven't used their grocery delivery service but their pickup service is well-executed and convenient, in my experience, so I'm assuming they can figure out how to be competent in delivery as well.

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