Financial Analysis
Key stats about Instacart: (Source://www.businessofapps.com/data/instacart-statistics/)
*Market Data Source: *https://www.supermarketnews.com/online-retail/online-grocery-more-double-market-share-2025
Based on the date in the above chart, assumptions are being made about the Overall Grocery market and specifically the eCommerce Grocery segment (USD billions):
Overall grocery market in 2020 is $1,039 billion, of which the online eCommerce market accounts for 10.2% or $106 billion. The overall market is expected to grow by 2.3% per year for the next 5 years. The CAGR for the eCommerce market is 17% with higher growth in 2021 and 2022, slowing in 2023 to 2025, meaning that over the next 5 years, in-person shopping is expected to decline.
To maintain its market position of 33%, assuming the growth rates noted above, Instacart will need to grow at the same rate as the market, which means that revenues grow from $35 billion in 2020 to $83 billion by the end of 2025, as shown in the table below::
To increase market share, say 5% per year, Instacart revenues need to grow at a faster rate than the market, as shown in the table below, growing from $35 billion in 2020 to $133 billion by the end of 2025:
Revenue Growth - Instacart
Key drivers to maintaining and growing revenue and therefore increasing market share include
Increased Number of Customers
The Shopper Training program being recommended, will increase shopper knowledge and performance and improve job satisfaction for the shoppers. More satisfied shoppers will take better care and concern for customers which will lead to an increase in customer satisfaction and retention. Retention is key. Losing customers and having to replace them with new ones is a costly process and means more new customers need to be added just to maintain the revenue. Higher customer satisfaction will be promoted through various channels to help grow and gain new customers.