Dive Brief:

• Instacart announced on Thursday several new features, including a "Deals" tab on its app, aimed at making its online shopping platform more affordable. 
• In select markets, Instacart is testing reduced or waived delivery fees on orders scheduled more than 24 hours in advance. The company is also making it easier for customers to find digital coupons on its marketplace and has grouped discounters under a new app section dubbed the "Dollar Store Hub." For Express members, Instacart will provide a 5% credit on eligible pickup orders that can be used toward future orders. 
• The new features come at a time when grocers and consumers are facing pressure from rising inflation and retailers are looking for ways to retain and attract digital shoppers. 

Dive Insight:

With e-commerce profitability a top concern for grocers, Instacart is looking to make online grocery shopping more attractive for consumers by focusing on price. 

With product markups and fees that include service fees and tips, e-commerce has generally proven to be a more expensive choice for consumers than shopping in stores. Some grocers, like Giant Food, have turned to slashing or removing fees, while others, notably Whole Foods Market, have kept or expanded fees, encouraging consumers to build bigger baskets online.

As instant-needs firms promising delivery in as little as 10 minutes ramp up in the U.S., Instacart's test of reduced-cost or free delivery in select areas rewards customers who don't need items right away. If the test turns into a large-scale expansion, it positions Instacart to broadly make delivery less expensive or free for customers who are willing to wait, while keeping fees for quick-turnaround orders. 

Instacart, which says it already offers "hundreds of thousands of deals and coupons across its marketplace every day," now has digital coupons from retailers and CPGs consolidated under the new Deals tab. With the Dollar Store Hub, which includes Dollar Tree, 99 Cents Only Stores, Five Below and Family Dollar, Instacart aims to make it easier for shoppers to browse discounters. 

Instacart's 5% credit on pickup orders is another perk tied to its Express membership. The company noted it has expanded its pickup service to more than 4,500 stores across 120 banners, making it more widely available. 

Instacart said the new changes are aimed at making online grocery shopping more affordable ahead of the holiday season and as supply chain issues persist. 

In October, the Consumer Price Index saw its highest annual rate increase in 30 years, and food-at-home prices jumped 5.4% on a seasonally unadjusted basis during the 12-month period that ended last month. Coresight Research found in a recent survey that people who buy groceries for same-day or faster delivery said low or no delivery fees and the price of items are the most important factors to them (roughly 61% and 53%, respectively).