By Joseph Chalfant
Instacart has begun to build warehouses to expand its position in the grocery delivery industry.
The company will partner with the tech company Fabric to begin construction on fulfillment centers in and near grocery stores. According to the Wall Street Journal, the centers should have a capacity of 10,000 to 50,000 products and will be automated to allow for a reduction in delivery times.
“With the rapid adoption of online grocery shopping that’s taken place over the last year, the grocery industry has experienced an accelerated transformation that’s required retailers to reimagine their e-commerce footprint and explore new technologies to meet the needs of their customers,” the company said in a statement.
“The new process will marry the speed of robotics with the human touch and attention to detail of Instacart shoppers, enabling faster fulfillment of customers’ full grocery shop from packaged goods, household essentials and produce to deli items, frozen food and alcohol,” it added.
Instacart now operates in 600 businesses across the U.S. and Canada. The company is gearing up to go public after it received a valuation of $39 billion after raising $700 million during the pandemic mobile ordering boom, according to the Wall Street Journal.
The grocery delivery service first revealed it was looking into automated warehouses in late February. The company engaged in preliminary talks with Fabric, but no concrete plans were laid out at the time. Industry experts considered the idea the clear path forward, according to the Financial Times.
“Instacart will soon realize that the optimal strategy is to become an online grocery retailer and leverage micro-fulfillment centers to fulfill their own orders,” said supply-chain consultant Brittain Ladd.
Instacart hopes that its expansion will increase competition in the grocery market and open the door for new retailers to utilize its services. Even as companies like Walmart expand their grocery delivery services, Instacart thinks it is in a position to develop new technology to benefit consumers.
“Instacart’s goal has always been to support grocers and give retailers of all sizes an edge in an increasingly competitive industry, so we’re constantly exploring new technologies and solutions that we believe will deliver value and growth to our retail partners, as well as a better experience to customers and shoppers,” the company said.
