Many Americans with a few extra bucks to spare turned to grocery delivery apps like Instacart during the pandemic to avoid going to the store.
With just a few swipes on your phone, the apps allow users to schedule someone else to pick up everything on your grocery list and deliver it to your doorstep at your convenience.
Grocery delivery apps went from “nice to have” to “need to have” during the pandemic, TechCrunch senior reporter Natasha Mascarenhas says. People started trying out apps like Instacart and GoPuff, which have been around for years, for the first time.
“We're definitely seeing [grocery delivery apps] get this new level of energy after a long time trying to prove that they were going to be a habit,” she says, “and not just a once in a while sort of thing.”
Mascarenhas predicts companies will start to offer more sliding scale pricing. At Instacart, delivery fees can start at $3.99 with additional services such as ordering alcohol or heavy items costing more. As new companies enter the market, competition could lead to cheaper prices for consumers in the future.
And when it comes to speed, some companies are promising near-instant delivery. Getir, a Turkish company that’s expanding to Spain and Italy, aims to deliver to consumers in 10 minutes, she says, for example.
Instant delivery gives consumers fewer options, but Mascarenhas says expanding dark stores will help companies to offer more goods with shorter wait times. Warehouse-like dark stores make fulfilling orders as easy as possible for companies. Amazon opened its first online-only Whole Foods dark store late last year.
Amazon started its grocery delivery push with different brands such as Prime Now and Amazon Fresh, but now it’s integrated into the normal user experience on Amazon, Mascarenhas says.
“I think we're seeing [Amazon] continue to invest deeply into it because they definitely have consumers who are hungry for convenience as proven by their e-commerce,” she says.
Despite the high demand for grocery delivery services, these companies aren’t making an “impressive profit” yet, she says.
And on top of making money, the gig economy may influence which companies consumers choose to buy from. Gig workers, which includes grocery delivery shoppers, have spoken out in protest around pay and benefits.
“The gig economy has over the years really struggled with not offering the same rights and classifications to these people who are, to be fair, making Instacart a lot of money,” she says. “I think it's coming down to a really dramatic point where gig economy workers are speaking up.”
Some companies are looking at how to either empower gig workers and pay them a fair rate or hire them as full-time employees, she says.
The passing of California’s Prop 22 — supported by delivery apps like Instacart and DoorDash in addition to Uber and Lyft — lets companies classify workers as independent contractors rather than full-time employees with benefits such as health care.
“Gig workers — after becoming essential workers during the pandemic — were not given classification for something like health care. We saw a little bit of a dramatic reaction to it,” she says. “Is that going to be the end of these stores? I don't think so, but I do think it's going to create some big questions around how they scale and once consumers have options, where consumers decide to put money.”
The future of grocery delivery will feature things “that consumers don't even know they want yet,” Mascarenhas says.
Los Angeles-based startup Zero delivers groceries without using any plastic. The company works directly with suppliers and delivers food in jars, boxes and other types of sustainable packaging, she says.
“To me, while it's super exciting to see the bigger companies make it easier for consumers,” she says, “I think there's so much room to grow to bring in sustainability, to bring in worker equality, and really to bring in a level of savviness that we've seen with online shopping to grocery delivery.”
This segment aired on August 4, 2021.