Breaking down Instacart’s Connected Stores tech

The new suite of tech aims to be the “antidote to Amazon” for grocers
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· 4 min read

Ever since Amazon reimagined the grocery store from the ceiling down with its computer-vision-based “Just Walk Out” checkout, and the pandemic gave online grocery shopping a major boost, traditional grocers have been feeling the pressure to bring high-tech experiences to IRL stores by adding things like smart carts and robots to their aisles.

With a new slate of grocery tech offerings called Connected Stores, Instacart aims to help grocers compete with the e-comm behemoth through a one-stop shop of features like electronic shelf tags and mobile self-checkout, to connect the online and brick-and-mortar experience, David McIntosh, Instacart’s VP of platform growth and technology, told Retail Brew.

  • The company is opening its first Connected Store in partnership with Good Food Holdings’ Bristol Farms store in Irvine, California, in the coming months.

While Amazon has enough $$ to outfit stores with cameras, McIntosh noted that’s not doable for most of Instacart’s grocery partners.

“We want to arm the industry with these capabilities and tools. We want to enable all of our retail partners,” he said. “We want to be the antidote to Amazon.”

  • The new tech also helps Instacart—often dubbed a “pandemic darling” for cashing in on the Covid-driven online shopping surge—establish its presence in brick and mortar. The company expects 65% of all grocery purchases to continue to occur through 2026, McIntosh said.

Linking up

McIntosh broke down the suite of Connected Stores tech, which he noted is “modular,” and allows retailers to “stack them on top of each other as building blocks.”

First, Instacart has updated tech from companies it acquired last year. The new iteration of the Caper Cart, made by smart cart company Caper AI, which Instacart bought last October, is slimmer, lighter, and holds 65% more. (Amazon made similar updates to its Dash Carts in July.) Called “model three,” the new cart will roll out to Wakefern stores in the next few months.

  • Caper Carts also now offer stacked charging, so grocers don’t have to charge them individually or swap out their batteries.
  • Instacart is also building off its acquisition of SaaS order management platform FoodStorm with a feature called Department Orders, which allows orders from a store's deli and bakery to be ready at the same time.

Then there’s some brand new stuff, like a Scan & Go function that lets shoppers check out using their phones, and also helps shoppers identify which products are EBT SNAP eligible.

  • These types of self-checkout apps have been tricky for retailers. Wegmans, for example, discontinued its self-checkout app last week, citing losses resulting from shoplifting. McIntosh said Instacart’s feature has “robust anti-theft technology,” and associates can use tablets to monitor things like how long a customer is standing in an aisle or if they are adding high-theft items to their carts.
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Another new feature is Carrot Tags, electronic shelf labels that’ll soon hit Schnucks stores, which allow up-to-date pricing and the display of attributes like organic and non-GMO. These, too, can indicate SNAP EBT eligibility. Plus, they feature QR codes shoppers can scan to get more info on products.

“We’re taking our understanding of what attributes drive relevancy online, what attributes drive GMV [gross merchandise value] online, and then we're painting that to these tags in the store to help with discovery and inspiration,” McIntosh told us.

  • Carrot Tags also work with another online grocery feature: Lists. When a shopper selects an item on their list, it triggers the tag’s LED light so they can find it on the shelf.

While outfitting stores with cameras for autonomous checkout is “totally inaccessible” and “very expensive,” McIntosh noted, Instacart built the Connected Stores tech to provide other ways to bring a digital shopping experience to brick-and-mortar stores. Plus, the new features “have clear ROI from the start;” they boost basket sizes and improve retailer ops, freeing up floor personnel to focus on the customer.

+1: While it’s a lot of moves to make at once—coming months after Instacart confidentially filed for an IPO in May—McIntosh said the in-store tech rollout was a long time coming for the platform, which has been focused on personalization and AI machine learning for several years.

“We’re taking those underlying infrastructure building blocks, and then applying them to the new products,” he said.—EC

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.