Why did webvan fail ?

• Agressive expansion into many cities without testing the model in the initial city

• Targeted customer density was not attained or didnt know who were the customers.

• Build the warehouse from scratch

• Margins in grocery is low

 Does instacart have a better prospect for survival

• Lean infrastructure
• Minimum Resources better productivity
• Partners with the Local stores
• Last mile delivery cost were zero.
• However, with scale there is also a significant opportunity for Instacart as when
more people start ordering, the shoppers and delivery personnel will become
more efficient due to serving larger volumes at once, enabling the company to cut
down on its costs.
• Another advantage of the operating model is that Instacart doesn’t hold any
inventory since all the items on its listings are in the super markets and hence the
company can avoid heavy capital expenditures in warehouses.
• Also, taking advantage of the crowd sourced model to connect users with
shoppers/ drivers, Instacart doesn’t need to have any trucks/ cars for the delivery
of goods.
• Yes Peapod was a better point of comparison
as both used free lancer DC or Grocery Stores
 Does instacart have better prospects
• Instacart offered subscription services which gave the consumers a benefit of
lower delivery cost , at times free of cost delivery also . This also helps to enhance
customer stickiness and repeat purchase.
• Lower/ Negligible inventory holding cost .
• More comfort to customer since instacart is working with stores a customer is
aware and familiar with .

• Better pricing and discounts

• Grocery store selection

Instacart loses points for impersonal customer service. However, it gains points for
no subscription required, fair pricing, low delivery fees, and bonus points for
grocery store options.
 Opportunity to improve Instacart User
Experience

• Findable -Store based search is possible and

not product based search
• Desirable - If we do product based search we
can do the price comparison across different
stores.
• Credible - transparency with customers
regarding the price was not shown.
• Desirable -Notification of messages of reorder
based on the customer previous basket.
• Innovative – Predictive analytics & Machine
Learning can be used to enhance the
consumers shopping experience and inturn
Instcart can increase there Avg Basket size .
 Dynamic Surge Pricing
• Instacart can consider a dynamic pricing model similar to what Uber do as
part of it's demand management . This can help instacart to shift demand
to times when more personal shopper is available

• But since instacart was also offering delivery membership called "Instacart
Express" , where they were giving unlimited delivery within two hours on a
order over $ 35 , doing a surge pricing could actually harm the company as
it would demotivate people from opting for the membership
 Value Creation
Consumer

a. By not having to visit the super market, customers can save ample time by
ordering straight from their smart phones or a web application.
b. The groceries can be delivered within 1 hour or even at a later dateThe
technical capabilities of the application allow for, among many other useful
features, quick searches, recommendations, descriptions of products, show of
discounted items and tracking orders/history.S
c. Setup can be especially useful for the elderly or people with poor health who
finds the process of getting to the super market, shopping for goods and then
carrying them back too tiring
d. Ability to combine orders from different super markets

Grocery Store
a. Grocery Store get more visibility via the Instacart app which can result in their increasing revenues.
b. Grocery Store are able to showcase their best selling products

Shopper
Shoppers gain since they are flexible to work at any hour, any day and for
any duration they desire