Jason & Scot Show Episode 255 – Instacart Chief Revenue Officer Seth Dallaire

A weekly podcast with the latest e-commerce news and events. Episode 255 is an interview with Seth Dallaire, Chief Revenue Officer at Instacart.

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Seth Dallaire is the Chief Revenue Officer at Instacart. In this interview, we cover his experience at Amazon, the challenges of operating Instacart’s 4-sided marketplace, key trends in the digital grocery space, and Instacarts evolution as a retail media network.

Episode 255 of the Jason & Scot show was recorded live on Wednesday, February 10th, 2021.

Transcript

Jason:
[0:24] Welcome to the Jason and Scot show
this is episode 254 being recorded on Wednesday February 10th 2021 I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scott Wingo.

Scot:
[0:40] Hey Jason and welcome back Jason and Scot show listeners.
Two of our topics we have really been Drilling in onto the last year our digital Grocery and the impact of covid on overall digital adoption.
One company sits squarely at the intersection of both of those Trends and we are really excited to have them on today’s show.
That company is instacart and we’re real thrilled to have on the show their Chief Revenue officer Seth Del are welcome to the show Seth.

Seth:
[1:09] Hey thanks for having me nice to be here.

Jason:
[1:12] Seth we’re thrilled to have you and as you may know from listening to the show we always like to start by giving the audience just a little bit of background about our guests and and you of course have a,
a very interesting e-commerce background so can you share it with our audience.

Seth:
[1:30] Sure and again thanks for having me on the show so current title is Chief Revenue officer here at instacart and
really what I’m focused on and have been working on for the past
16 months since I joined the company is creating an advertising business and I come
at this opportunity after having spent just about eight years at Amazon.
Where I was in various leadership positions in the advertising sales and marketing teams over there,
I joined in February 2012 and prior to that I was at Yahoo prior to that.
At Microsoft and prior to that Amazon so the bulk of my business career has been in digital media both in terms of sales and buying,
and really the emphasis for the past.
Ten years at least has been on e-commerce and Retail so it’s really exciting to be here at instacart particularly in this moment when,
a consumer behavior is is tipping into.
Grocery shopping online and I’m able to use a lot of the experiences that I’ve had in my career too.
To help make it making ads business happen over here.

Jason:
[2:56] That’s awesome and that the timing for having you on this show is terrific Scott obviously mentioned.
Covid in the intersection of digital and Grocery and I know instacart it’s even bigger than grocery so we’ll eventually talk about that,
um but a close second to digital and grocery that we’ve been talking about lately are all these retail media networks and you’re obviously squarely there as well,
so our last episode of the podcast we actually recovering Amazon’s earnings,
and to me one of the the standout features of their to as earnings was this that they’ve now surpassed 20 billion dollars in ad Revenue over the last 12 months.
I know you you were heavily involved in building that business,
I mean a is there any part of you that’s proud or sad to see the success now that you’re not there,
not implying it success because you’re not there,
but the related question I was interested to ask is in my mind it’s entirely possible that at 20 billion dollars in ad Revenue that the ad revenue is more profitable for Amazon and AWS is,
and I feel like that doesn’t get talked about a lot.

Seth:
[4:15] Yeah so to answer the first part of the question definitely proud the experience that I have there
was a lot of fun it was a great learning experience and I was able to work with some very talented people and there aren’t many opportunities where you get
work on an entrepreneurial project,
within the safety or that has the resourcing of a large successful company and that was really what the experience was like for me.

[4:52] Getting in there in 2012 and really.
Helping build the business from a sales and marketing side for sure but then working shoulder-to-shoulder with some pretty talented people on the product side,
and watching that business move from what I would argue was an experiment,
into something that is a material contributor,
to the business and so those those earnings reports when they come out I actually I get excited about them for that team that’s still over there I think,
I think it’s pretty great what they’re able to do or have been able to do.
Even if I’m not there anymore and the reason why I say that 2 is not.
Because I enjoyed my time at at Amazon but the success that Amazon has in terms of creating.

[5:50] Any Commerce advertising capability or marketing discipline if you will is important for the industry in that it allows other,
businesses to to do something similar and you mentioned there’s a whole bunch of different retailgeek.
Ad networks that are starting up or or media networks whatever the term was that you over you referred to them but the reason why they’re popping up is because,
they’re durable pieces of business and the if I reflect back to.

[6:26] Early 2012 when I had arrived at Amazon to help set up the North American.
Ad sales team there was a lot of waiting around in the lobby at the agency a lot of explanations as to why Amazon even a dad’s like
why don’t you know why does why do they need to have advertising like where are the ads on Amazon you know just give us your data that’s what we want and.
That that was a difficult mentality to change and really we were successful in creating a.
And understanding that e-commerce as a marketing discipline is similar to the same sort of trajectory or life cycle if you will of paid search or social media that both of those.

[7:24] Practices if you will started because and they were new they started from scratch they required a lot of Education to the industry,
a lot of risk taking on both the publisher side and on the advertiser side the marketer side to to invest in those areas and.
Ultimately they became things that were overtime well understood and really performing,
pieces of advertising and marketing and.
I see a lot of those similar traits over here and instacart and,
while instacart is e-commerce
singularly focused on Grocery and.

[8:19] The opportunity in the grocery space is super compelling just because you have a couple things one
on The Advertiser side of the business you have not a lot of insight there’s a lot a lot of capacity in terms of what’s happening in the online grocery space,
and there are many in the grocery industry is still Regional in many cases it’s a one trillion dollar a year business in the United States alone that maybe has somewhere between 5 and 10%.

[8:52] Of an absolute dollars of that that business is being conducted online and
that looks different from Mass merchandiser general merchandise environments like an Amazon a Best Buy Walmart where they’re selling
you know all sorts of things hard Goods as well as as food,
but what’s exciting to me is that we’re able to work with brands that maybe haven’t been able to participate in e-commerce as much as they would like to because the transactional component just didn’t exist
our measurement of the transactional component was difficult to do and instacart sits in a unique place where we’re working with,
almost 600 different grocery banners now and have significant reach where we can help marketers understand how consumers are interacting with their brands and,
how much they’re buying online relative,
the behaviors that there they’ve been demonstrating historically through physical retail so,
that gets me super excited because those that grocery piece of the business even two years ago was,
it was very nascent now it still is today but as a result of covid it’s been an accelerant in terms of pushing consumers.

[10:16] Into trial of online grocery shopping and what we found is a lot of that,
trial is durable Behavior Analysis we’re continuing to wind our way through covid but it’s also.
Created a ton of opportunity for for for marketers as well.

Marker 01

Scot:
[10:37] Maybe let’s let’s start at the top so I think everyone knows what instacart is but just in case like when you’re when you’re at a cocktail party describing instacart to someone that doesn’t know how do you describe it.

Seth:
[10:50] I describe it as a so we are an online grocery delivery service and we.
Work with.
Over 600 Grocers nationally in the in the US and well in North America really but.

[11:12] You know we allow consumers to shop for the fruit the food that they love.
And do it at the stores that they love.

[11:22] And get a whole bunch of time back that they can use to spend enjoying that food with their family and loved ones and.
That in very high level is how I describe instacart you know it in a more tactical level and certainly in these times.
We we talk more in focus more on the convenience and the safety,
of the service and that were allowing people to shelter in place to to have contact list delivery of the grocery items and help solve for trip occasions that normally they would be doing in person but
you know for for their own health or safety reasons they’ve elected to to find a way to have someone else do that for them.
And we do that really well and.
We’ve been delighting consumers with that service and and then we’re also you know offering retailers the opportunity to,
meet that consumer expectation that they can shop for groceries online and that’s another critical part of our.
Marketplaces the relationships that we have with retailers so you know we help retailers.
Offer online grocery shopping and delivery or pickup as well so.

[12:46] It’s a you know we’re not just about grocery delivery you know we also as a business you know solve.
Some provide opportunity for for retailers as well as well as consumer Solutions.

Scot:
[13:02] Awesome and then I kind of think in the bombers world of it as a three-sided Marketplace I don’t know if you guys use that language or not so on one side you’ve got this grocery store component and you said,
over 600 and then you have to call them instacart errs or Shoppers or what do you call.
Shoppers okay and then then over on the other side you’ve got consumers do you guys talk about any scale of the Shoppers and consumer legs of that imagine thousands of Shoppers and millions of consumers.

Seth:
[13:32] Yeah we that’s exactly right so you know millions of consumers hundreds of thousands of Shoppers and then the the other sort of component of that Marketplace a Time,
responsible for is the The Advertiser marketer component as well so they’re a new element to our Marketplace but we’re also working with those Brands to make sure that
they have an opportunity to promote their products to those consumers,
when they’re coming through the store to build a basket and shop and consumers have the expectation that they’ll be able to find products in our store fronts,
in our Marketplace that they would find if they were shopping at their favorite local grocery store so that’s the another component to our Marketplace that,
is newer but one we’re investing in heavily.

Scot:
[14:27] Yeah I’m a full disclosure I’m a big instacart user and have been for.
Feels like three or four years so that early days and it’s been really impressive as a entrepreneur to watch you guys build it out and the early days you know it had all these it was hard to find things that are in stock and,
and then the experience just got better and better and better over time and then,
it’s been really impressive to watch you guys deal with the surge of covid I imagine that’s been pretty pretty crazy scale that you guys have had to work through as that’s it.

Seth:
[15:00] Yeah first of all thank you for your business and glad that that’s the experience that you’ve had covid has been transformational in many ways for,
or business you know it’s forever changed the consumer shopping experience for sure it’s been an accelerant for online grocery shopping and and really led to.
A ton of trial in the beginning and you know when we were sort of in the the marsh last few weeks of March first few weeks of April where we saw the.
A wave of consumer demand come through that was unlike anything that we had really seen before and.
You know as the pandemic is we’re coming up on a year now.

[15:51] Sheltering in place and sort of how we’ve modified our own behaviors you know.
A lot of these these trials or things that consumers were trying certainly Within instacart.
Had become habitual their habit forming and because they’re their habit for me and providing value and convenience and utility or durable and that’s what we’re seeing across the business so we did,
learn a ton in terms of how to execute.
Against a huge wave of consumer demand and that’s really made us better prepared for.
The in the event that we see another sort of search like that we will we will be able to deliver the same level of efficiency and meet the same sort of standards that that you just mentioned.
For your own experiences and instacart consumer in the future so we’re really excited about that it was it was challenging for sure a lot of a lot of hard work went into execution not only from The Shopper side and.
And making sure that.
All the consumer demand was being met but then just the stress on the technical ends of the business and the technology and making sure that you know that we were able to.

[17:17] Function and and under all of that demand.
In provide the consumer experience of people were expecting was.

[17:28] It was remarkable and and it took quite a bit of time and energy from the teams here from partner teams with whom I work with every day so it was a great learning experience for us as a business and its really.
But it’s in a pretty good place for for how we scale going forward into the future.

Jason:
[17:47] That’s awesome Seth and you you hit on a topic that comes up a lot in my work life I’m curious to hear your perspective at the beginning of covid-19.
Everyone’s talking about oh my gosh this is going to accelerate digital shopping immensely and you know Mackenzie famous we write came up with this.
Ten years of digital adoption in 10 minutes and they predicted that like 35 percent of all sales would be online and that didn’t really happen right for general merchandise.
E-commerce Grew From like 13% It price spiked it 19 and came back down to 16 which is,
still a significant acceleration and meaningful but it’s not it’s not 10 years of progress but,
I do think in grocery we may have experienced like 5 or 10 years worth of progress specifically because of covid and I know there’s a lot of different data sets out there but the the data set I use.
We were at like three percent digital grocery penetration before covid so I three out of every hundred dollars was spent online,
and now we’re probably sitting somewhere Slightly North of ten percent so that’s that’s enormous and you know whenever I talk about without a client with a client their first question is.
Is that permanent is some of that going to go back when people can go back to restaurants like what you know how do you see it playing out in the long run.

Seth:
[19:14] Pretty simple so we’re looking at the same data sets that you just cited or or similar so you know the.

Jason:
[19:22] Nice we’re wrong together at least.

Seth:
[19:24] Well no the 10% that number is basically what we’re seeing and you know I guess like wrong in the best way and that everything I mean I’ll talk to my own personal experience about why,
in one of the decision criteria for me coming over to instacart to begin with what’s that I just I believed that over time.

[19:44] Consumers would become comfortable with shopping for groceries online that this is one of the last behaviors to tip into e-commerce.
With any scale and in fact everything that I thought would happen over three years happened over three weeks between the last the last week of March and the first two weeks of April and you know the estimates that we were using,
as a business for forecasting this point last year look more similar to probably the 3/2,
5% or it’s a wow that would be great if just that much consumer Behavior came into this gigantic us grocery market and in fact now those third parties are saying that it’s probably somewhere at 10% and,
you know that’s that’s a dramatic move and,
what were you know we can’t can’t cite specific numbers but what we have seen as much of the behavior both from a customer acquisition standpoint,
people who we acquired who are new to instacart,
but then also from a frequency standpoint so people who once acquired like are they ordering a second time the third time and using that as a measure of the durability.

[20:58] Those numbers are are I’ll just.
It’s a very positive without sharing any specific details so this is something that you know that we’re expecting to continue we aren’t,
there may be of course at some point like some variants and.
In consumer behavior that is a result of things you know hopefully going back to quote unquote normal that may impact the whole host of different,
behaviors that we had historically been measuring in some way in a pretty static form but from a grocery standpoint.

[21:40] Getting your food delivered.
Or being having the ability to solve for a trip occasion that was related to food when you can’t go out for dinner or you don’t have as many options to go out for dinner or you don’t feel safe shopping,
or you’ve been told to shelter in place like it had a dramatic impact on our business and industry.
It’s not just I mean instacart or other online grocery folks you know my former employer,
being one of them where you know they’re they’re seeing big grocery numbers as well so it’s that to me is just another sign of how durable this behavior is.

Jason:
[22:20] Yeah no I would tend to agree you know your old boss used to talk about one way doors versus two-way doors,
and it sort of feels like you know when you get all these these items showing up at your house and you don’t have to do any work that that kind of feels like a one-way door that you’re not likely to walk back through.
Um the I do have a question though Scott and I are super old you’re a little more youthful.
But so we are around in the beginning of e-commerce and there’s kind of this common way in every category when it got disrupted by digital,
um the Legacy players weren’t very good at digital and there there was some third party that could really accelerate their digital capability right so,
um early on of course Target and Toys R Us famous we Outsource e-commerce to this startup called Amazon and that.
Like arguably was a smart decision for them to you know dip their toes in digital eventually they wanted to bring that in-house a lot of retailers Outsource their digital to this.
This digital facilitator back then called GSI Commerce.
Which in many ways I think of is kind of a an analogous company to to instacart.

[23:38] And and just like commerce was enormously successful the founder of GSI Commerce now is Mark Rubin and he owns the 76ers.
The but I am curious like is there a risk like yours you’re sort of an intermediary that helps all these retailers get really good at digital grocery really fast and solve a bunch of really complicated Harry problems.
But in the long run if digital grocery becomes 10% or more of all grocery sales do Grocers need to develop.
Native digital chops and does that make that it,
rescue likely that they would continue to stick with you Ike what do you think the the long-term ramifications are like you know does does instacart it’s roll need to evolve or you know can you kind of play this this intermediary role forever.

Seth:
[24:26] Well we emphasize our Partnerships with retailers because we helped enable them like we don’t compete with them and.
That I think is one major distinction between the analogs that you drew with Amazon and.
And Target and Toys R Us and that in each of those cases.
Amazon was maybe not only helping Target or Toys R Us,
execute against an e-commerce strategy but they are also competing with them in some cases you know in the same sort of environment or using the same.

[25:08] You know are trying to attract the same audiences if you will and you know we are working with retailers.
Helping them.
Deliver a technology solution to Consumers who have an expectation that they can shop their neighborhood grocer or their National grocer.
Online and if the retailer is prefers to work with us because our technology is great and the service levels that we provide are great and the consumers love using.
The service then we think that’s that’s a great place to be
we’ve been very clear publicly about our position and enabling our Retail Partners and really servicing them
so we spend a ton of time and attention working with them every day to develop capability and improve
the capabilities that we provide them with and.

[26:13] So what we aren’t doing is competing with them or running our own grocery store you know right next door to their storefront which is more analogous I think to,
to what the situation you described what the Amazon was in the way back so I just see them as being totally different and.
Yeah there I’m certain that there will be some grocery stores or or retailers that decide to.
You know go it alone and at some point and that you know.

[26:49] But certainly their decision to make right now you know we’re focused on helping as many grocery stores as we can.

[26:57] Figure out how to help consumers shop online for groceries.

Scot:
[27:03] Yeah and Jason could go as listeners know he could go another eight hours digging into the grocery industry but I am curious about your main role there you are selling you know ads and.
As an instant Curry user I’m guessing so occasionally you know I’ll have a brand it seems to be brands that will pop in there and say.
Hey you’ve got some granola bars in your cart would you like some Quaker Oats Oatmeal kind of thing and is that kind of the ad network is it is it mostly Brands you’re selling to maybe walk us through.
Who’s in this ad Network and what kind of AD units are you guys offering to him.

Seth:
[27:46] Right now we are just selling ads within our owned and operated,
platform so we are not sort of working with what I would consider non-endemic partners,
you know all of the advertisers and we’re addressing have their products on the Shelf the grocery store
so that’s the presently that’s the addressable market for us so you know that is largely the domain of big cpg companies medium-sized cpg companies food a lot of food,
and household goods and things that you might find where you walk in the aisles of your brick-and-mortar grocery store and what we do is,
we help those Brands get in front of consumers when they’re coming in and shopping and the shopping behaviors that are consumers.

[28:43] Perform our take a couple different.
Forms of first one is that we may have someone come into the store and start using the search bar to build a basket very directed
self-selected search behaviors where they’re looking for a particular brand or they may be looking for a particular,
a commodity term for a type of product like milk for instance in which case we’ll,
we’ll work with Brands to to provide them some counsel on how to get their products up to the top of the Shelf if we if you will or the best placement on the Shelf which is are.

[29:19] What we call our featured product placements and those are paid paid search placements within within that type of,
consumer shopping experience then you know we have.
Other browse behaviors that consumers May perform or they come in and they start looking or shopping and browsing through a specific category or I’ll.

[29:42] We have standards that are graphical display units there that will allow Brands to create awareness about products or,
advertise specials
to could do consumers who are who are shopping and building their business or building their baskets that way and then we have a number of products that are
temporary price reduction tpr types of products so coupons for individual upc’s and products that might give,
a consumer some incentive to try a product or what we call delivery promotions which are,
incentives Brands may use to help a consumer build a basket and they may take the form of save five dollars when you buy $25 worth of product,
for a free delivery so in that’s really what we’re focused on right now is making sure that.

[30:39] The brands understand how to engage with consumers when they’re coming into our market place to shop,
and that the opportunities the advertising that we’re putting in front of the consumers is accretive to the shopping experience so we’re not doing things that are you know interruptive,
you know we’re and we’re also not running sort of non-endemic advertising in those placements we’re really focused on,
working with with those Brands and manufacturers whose products are on the Shelf at the grocery store.

Scot:
[31:18] And it seems like in traditional grocery the Brand’s there’s like,
all these slotting fees there’s like getting in the end cap there’s couponing there’s the circular are you guys,
is that where the dollars are coming from are you guys pulling from like the digital side like the maybe Google AdWords or something like that.

Seth:
[31:41] It’s situation dependent and it’s all over the place so we aren’t,
not right now focused on any one particular team within any one particular.
Enterprise or manufacturer we’re really focused on telling a story and a narrative we’re trying to educate.

[32:01] People within these big with any type of cpg manufacturer the medium size small startup e type of company or it could be a large
established manufacturer
they they all have similar learning agendas for online grocery shopping because the behavior is so new so while there are some manufacturers who are really good and very
evolved in terms of their e-commerce strategies for.
Does let’s call them like general merchandise retail experiences when you’re talking about,
being able to Market Frozen Goods or non shelf stable,
items that’s a totally different type of behavior and marketing behavior and then a totally different type of data set that we’re working with that,
it just hasn’t existed before so it’s existed in a brick-and-mortar environment not an online and so we can show up and and talk,
about the performance of a particular investment that you’re making so if you’re buying paid search.
We can tell you.

[33:18] The the return on that ad spend if you will and those are the table Stakes that’s the beginning of the conversation it’s like okay how many sales.
Did you Jen did did I generate by giving you this dollar for promotion and we have a closed loop attribution those are first that’s first-party data that we’re observing so we’re not inferring what’s happening we’re actually seeing the transaction happen and then.

[33:43] Once in the irony here is that that sort of the table Stakes that today Annie calm yourself as know this,
it’s just ironic to me that’s the least interesting part of the conversation right now because everyone expects of course you’re going to give me that,
in you know 2012-2013 when when I was at Amazon and we were really working to bring e-commerce advertising to the industry that was not a well understood.
Output or measurement for for advertising and it took us a while to,
to talk about that and get engagement and acceptance from the industry for that particular.

[34:27] Metric and here we have it and it’s like okay great of course you’re going to give me that,
what I want to know in addition to that are any types of signals that you may see that are adjacent to that particular Behavior so yes I got,
you know six dollars back for every dollar in sales for every dollar that I gave you in in advertising.
But can you help me understand of those people who bought the products like is their behavior purchase frequency different than someone who came through an organic listing and didn’t click on an ad
is there something about that this particular cohort of
consumer that their basket composition for instance that might be different like is that I could say okay this is a trip occasion that is different from.
Something else or that another consumer may be performing the oftentimes when we show up we have.
Representatives from the digital investment team from the or ecomp team.

[35:31] We have some brand marketers we have the chief commercial officers in the sale side,
we we have really and the Shopper marketing teams to come in and with their pencils sharpened ready to talk about results and,
so the fun part about this is that we have an instacart has visibility and all sorts of different data signals that can help,
these manufacturers get smarter about promoting their products and how to speak to consumers in this in this new shopping environment,
the another part of the fun challenge here is that there are other,
e-commerce platforms out there that are doing a good job of providing that data and have been for years so that the sophistication of the people with whom we’re talking is quite high so we don’t have to do a lot of the work about this is,
let me talk with you about your return on ad spend or row as they’re already there they want to go to okay let’s
what’s the lifetime value of the customer can we look at basket decomposition can I define different consumer cohorts in ways that map back to things that I might be doing in other parts of the business,
so we’re aspiring to help the brands with whom we work with understand that.

Jason:
[36:55] Yeah you know it’s funny like you guys have are tackling a really complicated space,
and so it makes all of these conversations more difficult than they are in some other categories but like one of the things I’m always curious about is
because as you and Scott mentioned the funding for an ad may be coming from the brand marketing department may be coming from a brand retail trade,
team or a shopper marketing team historically at a brand those kinds of teams had different success criterias right like that
The Shopper marketers might have been looking at actual cell through a product and those brand marketers might have been looking at.
At Impressions or brand recall or things like that so you’re you’re potentially getting funded by both and your the super complicated I would even argue four-sided Marketplace because you’ve got,
consumers Shoppers retailers and brands.

[37:56] Right are you able to have that kind of detailed.
Cohort analysis incrementality conversation with with all of your brand advertisers because part of me would be worried.
As a brand I might not even see myself through on instacart because,
it’s not actually my inventory and you’re not wholesaling my products right like your I sold the product to a retailer and then
the the consumer bought the product through you from that retailer so it seems complicated to track.

Seth:
[38:29] Well the everyone wants to
everyone understands that there are new signals here from in all of the sides of the marketplace that you just described and we do see ourselves as a four sided marketplace with each of the constituents that you identified.
And.
Each one of those has some type of data signal that would be helpful to the brand Advertiser and and so when we show up to talk about our offer.
We’re talking about tactically like here’s here’s where you can place your ads or your promotions and here is the,
the.
Receipt if you will that will give you an exchange for that investment that talks about the things that are causal to that investment.

[39:22] It’s often the more sophisticated questions are coming in the things that are adjacent to and maybe not a direct cause of the ad spend so.
You know consumer behaviors it could be how often was a particular item that was added to the basket not found in the store for like out of stock it could be.
Something along the lines of,
you know content like and data feeds and the quality of the content that the the brand sees in in our Marketplace and like how they tune that up or put their best foot forward.

[40:14] There’s no lack of interest in what we’re trying to do and so I see that as a great learning opportunity for our business if we can understand how.
The brand or if we can end this applies not to every side of our Marketplace understand the brand understand the Shopper understand the consumer understand the retailer and if we can do that.
And then help each one of those people you know improve It Whatever the result that they’ve decided it’s important.
Part of it is the determinant of success if we can help them improve then.

[40:49] Then we will we will not have a lack of requests for meetings.

Jason:
[40:54] Yep yeah no I get it and I know you get this but just just for our listeners like I would argue,
um the digital advertising in this category is even way more important than a lot of other categories because in a,
a traditional in store grocery shopping visit that shopper
makes a lot of unplanned purchases like they serendipitous we discover a lot of products they walked by a lot of products and they put a lot of products in their bag that were not on their shopping list and so when they they shop digitally
some of those opportunities are much more challenging right people I imagine tend to shop off of their list a lot more and so,
um brands have to work harder and and leverage tools like you’re providing to help introduce new products and sell new things to kind of break onto that list.

Seth:
[41:46] Yeah and that’s a great challenge for us as a as a Marketplace like we we want to be able to.
Create those serendipitous moments in the decision journey and you know because consumers love that stuff.
You know they’re there they wouldn’t they’re not being forced to add a bag of Milano cookies to their basket when they’re walking through,
you know the physical grocery store because it’s in the end cap they’re doing it because they’re reminded like I love those cookies I’m going to buy them.
And those same types of behaviors happen within our Marketplace,
and what we’re seeing is that trip occasions may be different so we may be a consumer may be coming into our Marketplace and,
has a very specific trip occasion where this is a stock up or this is my sort of junk food run or whatever and so what we’re trying to do is help.

[42:48] Bring those data points and signals back to brands in a way that helps them get smarter about how consumers are shopping.
And then anything that we can do from a an ad product perspective that will make that.
Trip through our store that basket building experience accretive and more fun and and more convenient and more efficient we’re going to do that.
We’re just getting started there really so that that’s the fun part and I agree with you there.
There are many behaviors that happen in the brick and mortar store that would lend themselves to e-commerce then there’s a whole host of different things that are exclusively the domain of e-commerce that can be transformative for a business,
and then we’re just getting we’re just scratching the surface there.

Jason:
[43:39] And to be clear those Milano cookies are on my shopping list I didn’t want to imply.
They weren’t but I do take your point and and speaking of cookies I wonder if that’s another thing
that’s maybe driving advertisers in here arms a little bit more right now like as as the third party cookies are getting depreciated and the mobile tracking you know dispute between Apple and Facebook
I could imagine that for a lot of these cpg Brands the,
their ability to Target and effectively advertise on their traditional digital media networks are
are eroding a little bit and so it is that another Trend that maybe you no favors people putting more dollars into the into retail media like instacart.

Seth:
[44:23] I mean it could in certainly the landscape is is changing and everyone needs to be aware of the compliance obligations that we have so we’re taking a.

[44:36] We’re very cognizant of that and the fun part about being here it instacart,
right now or really for the past you know 16 months is that you know we’re building this from the ground up so we can in some ways try to anticipate some of those changes in the industry because things are happening right now,
that without the burden of a legacy of or technology or Tech debt that would put us in a much more precarious position,
so so yeah we’re like.
But I’m certain that over the course of time that you know the we will also have to be,
cognizant of those changes and you know it’s not something that we go out and you know I’m not talking about that it’s not a selling point.
Necessarily when we’re talking with sophisticated.
Programmatic advertisers you know what we are talking about and what we’re trying to focus on at this stage is just on the.
Amount of concern consumer adoption just the surge in online grocery shopping Behavior that’s sort of tipped into this everyday behavior for.

[45:52] It sort of gigantic you know part of part of the.
The grocery industry and focusing their first on the size of the opportunity in the size of the prize has the right place before.

[46:06] We’re start getting into some of the more Technical and legal components here like where.
That’s just that hasn’t that it hasn’t been our focus and you know most of our products are all within our owned and operated,
you know site right now too so we’ve we’ve,
I’ve been watching that and we’re paying attention to it for sure but it’s not a selling point that we’re pushing in the marketplace right now or in the industry.

Scot:
[46:37] Yeah it’s gonna be interesting to see how that impacts folks that are crossing sites and with how they react to it.
The one and this is kind of a total newbie question of my side you guys are the ad Geniuses here I’m just a e-commerce guy trying to find my way in the world the where are you guys on,
you know like self-service tools so if I am starting Scott’s coconut water can I just go somewhere and run my own little search ad or are you not quite at that kind of.
Google / Amazon self-service Point yet.

Seth:
[47:10] Well we launched a self-service offering and platform last year.
So we’re getting started there the and continuing to push more capability through that platform so we have a number of.
Of advertisers that are in agents who are using those self-service tools.
And you know we’re working with apis as well with some of those Partners too and some of them are big.
Companies some of them are small it’s really you know we’re going to map to however the advertiser wants to work with us self-service as one of those options so and it will I think continue to take on.
An increasing amount of importance for us as as the Brand’s get more comfortable with with buying their ads that by 2.

Scot:
[48:01] Yet another thing I’ve seen I was kind of curious how this works so I’ve been on Brands sites like.
And I would call him bram’s that kind of usually go into something like a like a chicken or,
condiment or something like that and I’ve seen these recipes and you know the recipe you’ll have all the stuff and you can usually there’s a button and you can either you can kind of add it to your instacart.
Is that an ad unit or is that just you guys having some apis so that they can put those things into the cart on behalf of the consumer.

Seth:
[48:30] Well the adding things to your basket across the site is.
We have many different ways that you can do that so there’s no single point of Ingress but we are you know we are looking to enable both the,
sort of adding just an ingredient for instance like very easy like making that super convenient and simple adding an entire recipe to your basket,
as well,
or allowing for promotion for the case of like a commodity item or if the recipe has branded ingredients allowing Brands to promote those items so it’s we’re coming at it in a whole host of different ways.

Scot:
[49:16] Yeah and then I did notice you guys had started pronounce more traditional retailers I think it was fora and maybe Staples.
Is that and we’ve talked a lot about ship again and we actually coined that on the show here I don’t know if you know that and you know it’s kind of interesting because you could you could think of that as a release valve for you know.
The existing networks of e-commerce that are the last mile got really jammed up due to covid plus the holiday,
um is that how those retailers are utilizing you guys or is that different in some way.

Seth:
[49:53] They’re so you’re right we have started working with some retailers that are not in grocery I will I will state though the grocery remains,
our foundation and focus for the company there’s so much opportunity for us there.
That that’s continues to be where we’re placing our emphasis but there are.
Instances and companies like some of whom you just cited who have very successfully calm businesses.
But would benefit from having instacart as a service to solve for that more immediate or urgent triplication.
And.

[50:38] So the tziporah who you mentioned you know you could have a beauty occasion or emergency where.
You know we’re solving or bringing Cosmetics or beauty products to a consumer an hour or less would be.

[50:56] An awesome convenient service offering it’s really more about
awareness for our consumers when they coming into instacart are they aware that they can shop those those marketplaces or those storefronts with in our Marketplace and we’re just getting started there so it’s a great experiment for us.
But the
and while we’re focused on grocery right now you could see where there would be other retail experiences for things that aren’t food that would benefit from our service the the example that
that I tend to site is as my 17 year old son so he has some expectation that he can find anything on his phone any type of content video content music content
podcast a book report instantaneously if he doesn’t he gets super frustrated
you can order a burrito online you know over his phone in an app you can get a Teriyaki Bowl you can order a ride somewhere all these things
show up in 30 minutes or less or an hour or less and the irony is that the Slowpoke and his.
Consumer experience are the companies that deliver things in two days and in his.

[52:23] Experience as he ages into a consumer who will be shopping for Home Goods or groceries I just don’t see his expectation for convenience lessening over time.

[52:37] And.
Right now instacart is great at groceries we have a ton of room to run in the grocery space but you could see where a company you know like Sephora would be like right we did you know having that,
Last Mile hour or less delivery with instacart bringing those products to the consumers doorstep or the trunk of the car,
for a pickup would be.
But hugely helpful and and may be expected in the future so this is a great opportunity for us to learn about the sum of the expectations for those retailers in and also from the consumer demand for them.

Jason:
[53:19] Seth I don’t know if you realize this but you totally hit it on the head it’s a little known fact but Scott and I used to have so many 1 hour Beauty emergencies,
that’s actually why we decided to start a podcast.

Seth:
[53:31] There you go.

Jason:
[53:32] Yeah it’s just it’s it’s a lot easier than starting a YouTube channel so so I totally totally get that listen we are coming up on time so I do I do want to squeeze one last question in,
we talk so much about acceleration in this cone crazy covid year has made things go so fast,
if I jump back in the hot tub time machine and kind of jump forward a few more years in the future.
Do you have a vision for for how instacart has changed or evolved or there are there like.
Particular types of categories that you your interest that you think you guys might expand into or new types of products or services that you think you might offer anything you can reveal.

Seth:
[54:17] No major reveals but if I’m looking into my crystal ball and thinking really about the ambition of what we’re doing.
I’m making a bet I’ve made this bet by coming here that in the next five years if that’s the time Horizon for the future,
that as much as 20 or 25% of all grocery shopping will be occurring online.

[54:44] And if that’s the case that’s a massive amount of consumer Behavior a massive amount of consumers,
looking for that are expecting a very specific type of shopping and delivery experience or pick up experience and,
all all of that are much of that from an advertising perspective is yet to be learned.
And we’re learning it right now so from a from an AB product perspective.
What we will deliver to the industry will be products that make the consumer shopping experience accretive for sure but then also are able to help.
The manufacturers get smarter about how the products are being purchased what what types of products are desired and.
I just see that as so much open territory for us and really for the industry to run it and.
That that is where my head is Alec where I’m focused for the next five years and I think a lot of those things.
Progressor e which you can argue as one of the most complex retail experiences to solve for because of the perishable nature of much of the product.
Many of those successes that will we have will lend themselves to other retail categories so I’m super excited about that.

Jason:
[56:08] Yeah I I tend to agree I think it’s a super fun space to be in because it is.
So important and evolving so quickly but Seth that’s going to be a great place to leave it because it has happened again we’ve used up all our allotted time as always if you have any comments or questions about this episode feel free to
hit us up on our Facebook page or send us a question on Twitter.
Seth really enjoyed talking to you and thank you very much for sharing the instacart story with our listeners.

Seth:
[56:39] Well thank you very much for having me I appreciate it stay safe.

Jason:
[56:43] Until next time happy commercing.