Just a few months after partnering with Uber Eats, Instacart says it is pleased with the impact the restaurant delivery tie-up has had on its customer engagement and grocery sales.
“We knew that many of our customers were already ordering restaurant delivery, which meant they were going to competitive apps, or we also knew that many of our customers actually weren't ordering restaurants and so we thought that was something we could bring to the table,” Instacart CFO Emily Reuter said last week at the Nasdaq 51st London Investor Conference.
The addition of restaurant options adds value to Instacart+ membership, Reuter said.
The companies unveiled their restaurant delivery collaboration in May, and the partnership went live in the second quarter. It builds on Instacart’s efforts to diversify its offerings beyond grocery and become more of a one-stop food shop for its users. Reuter, who spent nearly a decade with Uber before joining Instacart early this year, said it made more sense for the companies to partner than for Instacart to enter the restaurant vertical on its own.
A “Restaurants” tab in the Instacart app allows people to order Uber-fulfilled restaurant delivery. Uber pays Instacart an affiliate fee on a per order basis, Reuter said.
So far, the partnership is driving customer engagement with the Instacart app and fueling more online grocery sales.
“They're coming back and using restaurants more frequently, but most importantly, they're coming back and ordering grocery more frequently, and they're spending more on grocery,” Reuter said.
The tie-up also seems to be working in Uber’s favor. Basket sizes from the partnership are about 20% larger than Uber’s base basket sizes, Uber CEO Dara Khosrowshahi said during the company’s second-quarter earnings call in August.
“We’re seeing the demand come from a lot of suburban markets — it kind of matches the Instacart geographic penetration, so we do think that the incrementality of the volume from Instacart is quite strong,” he said.
Reuter said the restaurant business seems to appeal to — and overlap with — the families that order groceries through Instacart.
“It's still early days. … We're really pleased with what we've seen to date,” Reuter said about the partnership.
