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Grocery Outlet (GO) Takes the Plunge in E-commerce With Instacart

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  • GO

The coronavirus pandemic ramped up the shift toward e-commerce, which now became quite a popular shopping trend. Undoubtedly, online shopping including swift deliveries is here to stay, even in a post-pandemic world. Companies are focused on expanding e-commerce capabilities including improvement of delivery services to make customer shopping experience seamless. To top it all, the holiday season is just around the corner. Hence, the retailers are embracing smart moves to make most of the festive period.

Going with the flow, renowned grocery retailer Grocery Outlet Holding Corp. GO decided to break into the e-commerce world via a pilot program in collaboration with Instacart. The pilot will run for six months across the company’s 68 stores, offering everyday essentials and staples for same-day delivery via Instacart.

Instacart “a neighbor in the Bay Area” as called by Grocery Outlet, makes valuable efforts to offer a unique shopping experience. This online grocery delivery platform will offer the company’s guests a greater accessibility and convenience including quick delivery and an in-store treasure hunt experience. Well, the latest deal is likely to tap higher sales and make the company achieve greater success.

Let’s Find Out More

Grocery Outlet has been exploring complementary ways to deliver great value to its customers for a while. Also, the company is focused on personalized customer-marketing efforts.

On its last-quarter earnings call on Aug 11, management highlighted that it intends to start a test-and-learn approach to assess several e-commerce solutions including delivery and buy online, pick up in store. In around two months, the company announced its partnership with Instacart and looks to capitalize on prevailing demand for online grocery.

Apart from fortifying its stride in the e-commerce space, Grocery Outlet is firmly focused on its store-growth endeavors. The company continues to build its real-estate pipeline to support 10% annual unit growth.

It has been making strategic investments to improve its functionality and scalability for sometime now. These include enhanced point of sale, warehouse management, vendor tracking, store communications, real estate lease management, and financial planning and analysis. In the long run, management believes that there is a potential to establish 4,800 locations, nationally.

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We believe that Grocery Outlet’s flexible and differentiated business model coupled with expanded product offerings, exciting offers and increased customer awareness will help fuel its sales and profits. Shares of this currently Zacks Rank #3 (Hold) company have increased 4.4% in the past month against the industry’s 2.3% dip. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Players Ramping Up Delivery Services

A few other renowned players strengthening delivery capabilities are Walmart WMT, Target TGT and Five Below FIVE.

Walmart took robust steps to brace its delivery arm, apparent from its investment in DroneUp, partnership with HomeValet, on-demand drone delivery in the United States with Flytrex and Zipline and a pilot with Cruise to test autonomous grocery delivery through self-driven all-electric cars.

Target’s same-day services through Order Pick Up, Drive Up and Shipt are commendable. The company has been deploying resources to enhance its omni-channel capacities including same-day delivery of in-store purchases and accelerate technology improvements.

Five Below extended its partnership with Instacart to bring an expedited same-day delivery facility to all its outlets. The company rolled out a curbside pickup option and accelerated its buy online, pick up in-store business model.

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