retail news in context, analysis with attitude

The Financial Times this morning that "Instacart is exploring the use of robotic warehouses to fulfill its orders, as it looks to streamline the process of ferrying items from stores into customers’ homes … For almost a year, the company has been researching ways to automate the picking process. Last spring, Instacart sent out proposal requests to at least five companies that offer robotic systems that would pick goods from purpose-built 'dark' warehouses instead of store shelves."

The current model uses more than a half-million "gig workers" to pick at store level:  "The workers drive to stores, pick the goods off the shelf, check out and deliver to customers’ doors. Instacart charges a delivery fee, and in some cases takes a commission, while gathering lucrative data on shopping habits."

FT writes that Instacart wants to open as many as 50 such robotic facilities in the US, and has engaged in extended discussions with several technology companies.  However, it has not yet gotten buy-in from its retail partners, which, as FT notes, "have been hesitant to further entrench Instacart into their businesses."

Such a move, the story suggests, also "is also likely to revive fears among its grocery store partners that the company may one day attempt to go it alone, buoyed by years of insights from shopping data, a claim that Instacart has strongly and repeatedly denied."

KC's View:

Longtime (or even new) MNB readers know where I come down on this - I've been saying for years now that Instacart's eventual play will be to compete with its retail clients.  It already is competing with them, in essence, for promotional dollars, collecting them directly from suppliers and offering Instacart-specific deals to consumers rather than simply serving as a service-provider intent on bolstering its clients' brands.

I would imagine that a network of robotic warehouses, combined with all the shopper data collected by Instacart and its relationship with suppliers, would make it a formidable competitor when it decides to make that move.