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April 4, 2014 By:
Instacart Brings Online Shopping Home
George Shotz wants to know if he can bring some wine over to your house this evening to go with dinner. Maybe a few bottles of tequila for your March Madness Margarita party? How about a single malt Scotch for your nightcap?
His name might not be familiar, but he and his employer, Instacart, are fast becoming the new best friend to a huge swath of the Philadelphia area. Instacart, the San Francisco-based company that recently began operating in Philadelphia, is the newest player in the home-delivery business for groceries.
It is already a crowded field that features established brands like Peapod, AmazonFresh and FreshDirect, to name a few. But Instacart boasts two facets to its business model that help differentiate it from its competitors.
First, instead of next-day delivery, says Shotz, the local manager, Instacart will get your order to you either within two hours — for a $3.99 charge — or within one hour for $14.99. After joining at instacart.com, you can place an order by shopping virtually at Whole Foods, Superfresh and/or BJ’s Wholesale Club. (You can order from all three simultaneously — with three service charges.)
Second, the company offers something never before seen in the state of Pennsylvania —liquor delivery. Shoppers can pick and choose from the PA Wine & Spirits online inventory and hear their doorbell ring less than 120 minutes later.
As might be expected, home liquor delivery has proven to be quite popular. “I was expecting it somewhat, but I wasn’t completely sure of what would happen,” says the 33-year-old Shotz. How popular has the liquor delivery launch been? Within the first few hours of announcing the service, he notes, Instacart was trending at No. 1 on Twitter in Philadelphia.
Which is exactly what Shotz and the rest of the Instacart team were hoping for. There’s a reason you haven’t seen any advertising in the run-up to the company’s local launch: they aren’t doing any traditional media buys. “What we have found,” Shotz explains, “especially in Pennsylvania because of the liquor laws, is that word of mouth is the best marketing tool we have.”
Shotz, who attends Adath Jeshurun in Elkins Park and lives in the Graduate Hospital section of Philadelphia, was a fixture in Jewish Philadelphia long before he became involved with Instacart. He was the marketing facilities manager at the Jack M. Barrack Hebrew Academy for the last few years, where he was responsible for renting out the facilities when school wasn’t in session, as well as managing the school’s catering services.
He is also one of the chairs of LimmudPhilly, the annual three-day Jewish learning festival that is currently on hiatus due to funding issues. (Warning: the LimmudPhilly web address automatically switches to adult-content sites.)
Even though he has been part of Instacart for barely a month, Shotz qualifies as an old hand at the company, which has been in operation just over a year and is already in Boston, Chicago, Washington, D.C. and New York City.
If this business model sounds familiar, that’s because it has been done before. Way back at the turn of the century, same-day grocery delivery was touted as a can’t-miss industry, spawning short-lived companies like Kozmo and Webvan, which has the distinction of being named the biggest bust of the dot-com era by CNET.
Shotz says that the difference between Instacart and the old model — as well as his next-day competitors — is, essentially, crowdsourcing. The company hires freelance “personal shoppers,” who are paid to shop and deliver during their shifts, thereby eliminating a standard workforce, warehouse, delivery trucks and everything else associated with the traditional home delivery business model.
For Shotz, who has a background in startups and logistics, this is a dream job. “I think Philly has been changing a little bit,” he says in response to a question about why he feels Instacart will succeed where others have failed. “A lot of startups are starting to thrive, and we are ready for it. We have plenty of staff, and we are hiring every day — we did six interviews by 1 p.m. today!”
One word of caution about the service: Don’t expect to be charged the same low prices that you see in a weekly circular. “What we say is that Instacart prices are our own,” Shotz explains. “They’re not the same as the store — sometimes they’re less, sometimes they’re more. A lot of things are factored in, and we don’t deal with sales.” Translation: You can expect to pay a slight premium for the convenience of this service. But considering that you can now do your Passover shopping — wine and slivovitz included — and start prepping in less time than it would take to do it yourself, who’s complaining?