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Instacart Seeks Partners For Automated Fulfillment Centers

Instacart Seeks Partners For Automated Fulfillment Centers

June 01, 2021 at 06:10PM
by PYMNTS

Instacart wants to replace its team of gig shoppers with robots in an effort to reduce costs and forge a stronger relationship with supermarkets.

That’s according to Bloomberg News, which on Tuesday (June 1) reported on Instacart documents showing the grocery delivery and pick-up service building a nationwide chain of automated fulfillment centers, where robots would gather non-perishable items alongside humans handling produce and deli products.

Some of these facilities would be part of existing supermarkets, while bigger, standalone outposts would take care of orders for multiple locations.

“Despite working on the strategy for more than a year, however, the company has yet to sign up a single supermarket chain,” the Bloomberg story noted. “Instacart had planned to begin testing the fulfillment centers later this year, the documents show. But the company has fallen behind schedule, according to people familiar with the situation.”

Nor has Instacart settled on automation providers to create this technology. Bloomberg noted that “delays in getting the automation strategy off the ground could potentially undermine plans to go public this year. Investors know robots will play a critical role in modernizing the $1.4 trillion U.S. grocery industry.”

If the plan goes forward, it will mark a sea change for Instacart, which now uses thousands of gig workers. It’s a model that has made it the second-largest grocery delivery/pickup service next to Walmart, operating in 45,000 stores.

Paying all of those shoppers adds up, however, with delivery fees, price markups and tips adding up to 25 percent onto what shoppers pay for the standard order from Instacart, as Marc Wulfraat, president of the logistics consulting firm MWPVL International Inc., told Bloomberg. “There’s a hefty price for this convenience we all love so much,” he said.

Tuesday’s news follows an announcement last week from Instacart that the company is rolling out a 30-minute delivery service in 15 American cities.

For more on Instacart and the changing way consumers buy food, read PYMNTS’ Karen Webster’s story from last month on the connected economy.