Nearly two years ago, going to the grocery store elicited sheer terror. No longer were we only tasked with the inconvenience of lugging Trader Joe’s bags down subway steps and fumbling through turnstiles (or navigating SUV blind spots in the parking lot); now, the anxiety surrounded a conspicuous virus not yet understood. Did we need to wear gloves when plucking apples? Wipe down our bags of tortilla chips with coveted Lysol wipes after entering the house? Fortunately, we now understand that groceries aren’t the harbingers of the virus, but the convenience of doorstep delivery we adopted during those days lives on.

Instacart, the grocery delivery app most favored among us, commanded an estimated 84% of the market share of intermediary grocery delivery (which doesn’t include Walmart and Amazon) in the U.S. in 2020. But with the popularity and adoption of the service continuing in full swing, that number is set to drop, according to a recent report by The Information. Competitors like Uber and DoorDash threaten to bring that market share down to 68%. The company is profitable, taking a small cut of the sales in people’s digital carts. A small cut of a $23BN pie in 2020 amounts to about $1.5BN in revenue. Not too shabby. But with only 10% year-over-year growth in 2021, the company is reportedly putting off an IPO until next year or later while the company focuses on growth.

Micro-fulfillment centers and expiring exclusivity contracts are also set to derail the company’s hegemony. Rather than contract with Instacart, grocery chains are looking to automated warehouses for order picking and shipping. The solution to this existential crisis might lie in ad sales, with product sellers buying up wandering eyes' attention as people shop the site. Walmart and Amazon’s ad sales are a testament to this model of revenue generation.

For more on Instacart and budding grocery delivery apps like Dumpling, The Fresh Market, goPuff, and others, search keywords “Delivery” & “Grocery” on the PrivCo platform.