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SENSOR TOWER · SEEMA SHAH · SEPTEMBER 2023
Instacart Turns to Offer-Driven Messaging
Instacart's sales soared in 2020 due to the pandemic, but it now faces increased competition as it prepares for its IPO. The company has shifted its messaging from convenience and safety to value and saving. This report analyzes Instacart's marketing strategy and ad spend, providing insights before its IPO pricing in September.
Key Takeaways:
In part due to the emergence of new players, US ad spend across the grocery delivery cohort has continued to increase at a double-digit pace YoY as companies aim to capture more customers without the organic boost from pandemic-induced demand: in 2022 and 1H23 US ad spend in the cohort increased 30% and 25% YoY, respectively
However, ad spend in the EMEA region already has signs of slowing, down 33% YoY for 1H23, after only a 5% YoY increase in 2022, as discounts dried up and consumers were less willing to pay the premium for delivery
Changes in the digital advertising landscape for the grocery delivery category reflects heightened competition: in 2019 the biggest players were Instacart, Amazon, and Shipt (accounting for 90% of all US ad spend) but as of 1H23, Walmart, Amazon, and Shipt only make up ~50% of US ad spend for grocery delivery
Pathmatics by ST data shows that ads with messages around deals from Instacart increased ~500% QoQ in 4Q22, likely due to a slowdown in orders as the US moved further away from pandemic related quarantines. As a response, Instacart pivoted to a more sales-driven approach to attract and reignite customers
For more information, request the full report from reports@sensortower.com.
