- Instacart partnered with Sephora as part of its push to become an on-demand delivery platform for more than just grocery.
- But as Instacart moves into same-day delivery, it's going to come head-to-head with fierce competitors.
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The grocery-focused delivery platform is adding Sephora to its offering, allowing it to provide the brand's products via same-day delivery that can be as fast as 1 hour.
Sephora products are currently available via Instacart from select stores in California and Canada, but the marketplace will fulfill orders from over 400 Sephora locations in North America in the coming weeks. And Instacart will be integrated with Sephora's loyalty program so that members can access promotions and earn points even though they're not ordering directly from Sephora, giving Instacart the chance to recruit Sephora's loyal customers.
Instacart has been quickly expanding its product selection in an effort to leverage online grocery's popularity to become consumers' destination for all of their on-demand delivery needs. The delivery platform has partnered with 7-Eleven, Big Lots, Staples, Petco, The Vitamin Shoppe, and other merchants that offer more than groceries to build out the types of products consumers can order on its marketplace.
Instacart is hoping that its newfound popularity, which it gained from online grocery taking off during the pandemic an accelerating its growth, will allow it to convince consumers to shop with it for other product segments. And because Instacart is able to offer same-day delivery from a variety of merchants, all via one platform, it may be able to successfully expand beyond grocery and become a formidable same-day delivery player.
As Instacart moves into same-day delivery, it's going to come head-to-head with two segments of competitors:
- Services previously focused on meal delivery, like DoorDash and Uber Eats, are also trying to become broader same-day delivery platforms. These services are looking to move beyond meal delivery to get into segments like grocery and convenience store products, bringing them into direct competition with Instacart's core business as well as its expansion plans. Uber Eats and DoorDash also boast a network of workers who can fulfill orders, but Instacart may be better prepared to extend its reach because its model is built around workers shopping at a store on behalf of a consumer, while meal-delivery platforms have previously just had workers pick up orders.
- Etailers including Amazon, Target, and Walmart have already positioned themselves as same-day delivery providers. These merchants already offer same-day delivery from their networks of stores and warehouses, and are among the top etailers in the US, making them formidable competitors for Instacart's same-day delivery business. Instacart has the chance to offer an attractive product selection etailers can't match by partnering with popular retailers, but we expect Instacart to struggle to dethrone these ecommerce leaders because they feature a huge variety of products and, in some cases, have spent years establishing themselves as same-day delivery providers for more than just groceries.
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