Instacart Adds Two Board Members In Push to Help Grocers Take on Amazon

Instacart CEO Fidji Simo talks about the company’s efforts to help grocery stores compete with Amazon and how supply chain issues are impacting food stock. She also announces two new board members. She speaks with Bloomberg Technology’s Emily Chang.
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Thank you so much for joining us. It’s wonderful to have you
back.

You are now three months into the job as CEO. What is one thing
you have learned about the competitive landscape that you did

not expect.
Well you know I spent a lot of time was all retail Gulf News and

I thing that we’re seeing is that consumer habits of changing at
a very fast pace. Consumers are expecting faster speed say I’m

expecting to be able to shop seamlessly across online and
in-store. And so a lot of what we’ve done in the last few months

is really a line of self was always felt coldness. She gave up
how we can enable them to selves our customers and to change two

selves is changing habits.
This idea of in-store car as a platform where grocery stores are

your main customer is sort of different than what in-store cart
has been for so many years. Focusing on the end consumer. Do you

see this vision of in-store car as more of a platform or more of
an enterprise business.

Well I think it can be both because fundamentally what grocery
retailers want from us is to help them selves their customers.

And so all knowledge of consumer trends or knowledge of how to
self is a consumer of online in the best possible way is

actually helping grocers. But I think you’re right that his
vision of becoming a retailer of enablement platform is

something that I think is incredibly important for the future of
our company. So what do you see as the biggest threat. I mean is

it Amazon or could it be an Uber EADS or door dash as they get
into grocery.

There’s a grocery market is very big and so obviously it’s going
to attract a lot of different players. But for us we have a

completely different strategy from appeals you just mentioned
when it comes to Amazon. Our strategy is really equipping also

grosses resources technologies in need to compete with Amazon
which has as you know very deep pockets when it comes to

platforms like bullets and door dash. These platforms tend to be
platforms that really focus on aggregating demand. And over time

owning inventory. That’s not all strategy at all or strategy is
really to fall. Now is a grosses. Never compete with them and

really enable them to compete in this marketplace. Meantime your
buying caper I 350 million dollars this is your biggest deal

yet. They offer a for shopping carts for checking out. The idea
being as I understand it that you might be able to check out

directly from your shopping cart in the future. What is the
vision as you see it.

I think consumers are going to continue shopping online and
in-store. We are an industry that is 10 percent penetrated

online. We single girls the next five to 10 years it’s going to
be maybe 70 percent online but that leaves 70 percent of

commerce that’s going to happen in stores. And Asian consumers
are going to expect from court that local grocers to nose FTSE

know you know who they are and trust Malaysia experience for
them whether they are online or in-store. And so is a technology

like keeping an I not only you can check out without you know
having to wait in line which we know is a real pain point for

consumers. But you can also thanks to the digital Su Keenan
you’ve got a really personalized experience for you where we can

show you recipes with items in your cart. We can suggest
products. And so we see this technology as a way to really

breakdowns as silos between online and in-store and enable
grocers to other more personalized and way better consumer

experience in-store as well. You’re also announcing two new
board members Meredith Levy and CEO of The New York Times and

Lily Sara fan co-founder of Homecare Assistance. What do they
bring to the table that in-store cart doesn’t have yet.

So in the case of Meredith you know she has seen an industry in
transformation and she has taken an incredible brand and made

that digital transformation that’s a New York time. So I think
she’s going to help us tremendously in understanding how to take

you know Soma for you know grocery retailers and help them
resist digital transformation. And the best fall that we can.

She has also built an incredible subscription business. That’s a
New York Times. And we are seeing in-store got express become

more and more important to our business. And so that’s that’s
also something really interesting that I’m looking forward to

learning from. In the case of Lilly she has built an incredible
business in a highly complex industry. And so she brings that

perspective to the table as well as the perspective of someone
who was advised a lot of local market places and worked with

frontline workers for many years. So really looking forward to
understanding of

ability to to bring this business is to scale and welcoming
sensible. Now since you’ve joined the company you have made

multiple hires a very senior women including Carolyn Everson who
you worked with Facebook for many years. And you look at the

tech industry this is almost unheard of. I mean your management
team is almost is is majority women right. That is incredibly

rare. What do you have to say to companies out there that are
looking hard but still don’t have much to show for it.

Look Halder
I know it’s it’s not. I don’t think it’s that hard to find

incredibly talented women. I think you know a show really
focused on diversity. You can absolutely find incredible talent

in the industry whether it’s for executive roles whether it’s
for bold roles. And so if you know anyone is really committed to

that and struggling please reach out to because they have a long
list of wonderful points. And we’d like to be onboard and we’d

like to be part of great executive team. So you know in our case
we think it’s incredibly important because in 80 percent of our

customers are women and 70 percent of shoppers are women. So
when I look at a company worldbuilding building it’s really

important that some management teams and also which is a board
represents the needs are for customer base. So it is going to

take time to realize a bigger and more ambitious vision of
interest inside a car. What does that mean for the timing of an

IPO or public offering.
Well you know I won’t comment on timing but what I can tell you

is that for us the focus is not having a good IPO. It’s really
building a great public companies that really stands the test of

time. Of course we want to be a public company someday but right
now I can tell you we’re all incredibly focused on buildings of

business and building that new vision that we’ve talked about of
really being a retail enablement platform for all of our

partners. So could we say an IPO is not a priority for 20 21 or
22. Should we be circling 2023 or beyond.

It will happen at some point. Oh she does allow us for longer to
cross for long Jihye Lee.

Now the world is going through some major supply chain shocks
right now. Some schools haven’t gotten lunches that they were

supposed to get back in July. What are you seeing in the supply
chain. How is this affecting insta card in grocery stores and

your customers. We are already certainly seeing issues with
finding products on the shelf. We have 500000 shoppers in the

aisles of all grocery stores every day.
And as a result we get a lot of data from them about what’s not

on the shelves. And so we send that data back to retailers and
they realize that it’s out of stock and that they need to act on

that. And so that’s also really important data for them to be
able to take action not just forcing that all on things to go

but also for the management of their stores more generally. So
what. So we’ll really do that

as food prices continue to increase. Does that mean in-store
cart is going to get more expensive.

And what does that mean for the retention of your customers at a
time when more people are starting to shop in store.

So we are doing a lot to make sure that you continue to get a
lot of value from insta golf to involve tequila. We are really

highlighting all of the deals that we have on the platform and
that’s also when advertiser advertising comes in. You know

because we are we are building this advertising business. It is
also helping customers find better deals because advertisers

like to do advertising deals RTS specific products. So that’s
helping kind of takes of cost down for customers. And you’re

absolutely right. In a win when you look at one of the biggest
hurdles to online grocery going from 10 percent online

penetration to 30 percent.
Cost is going to be the biggest driver. And so we’re really

really focused on making sure that despite the current
environment we are developing products that take prices down or

just offer better deals generally. So does that mean prices are
going up as you see it.

We are slogging very early days but we are starting to see in
some places some prices going up. It’s not widespread yet but

this is definitely something that we are keeping an eye on and
really want to do is as much as we can to cuddle counter balance

out with deals so that customers can still get good value. So
there is these supply chain issues that are causing advertisers

to pull back. There’s also also the Apple ad tracking
technology. It’s insta cart feeling the squeeze of of ad

budgets. The ad. Is that trickling down to you. We are we are
seeing advertisers concern about advertising during the supply

chain disruption. But the thing that’s interesting for us is
that we only show ads to consumers when we have a very high

confidence that some products can be on a shelf.
So we can do that advertise as some confidence that when you

spend ISE dollars which says I’m not going to spend dollars that
are going to go to worlds consumers will not find some products.

And so through the system that we’ve built we have been able to
give them that confidence. But we are certainly seeing a lot of

advertisers worrying about that show.
Would you ever look beyond grocery into food delivery and

compete more directly with some of the other folks that we
mentioned Uber Eats. Door Dash etc.

We think the grocery industry’s so big that we we don’t need to
go outside of the grocery industry icing what what is making us

so strong is actually that we are incredibly focused on the need
of groceries. We are you know obsessing over whether your

avocado is going to arrive in a perfect state of ripeness at
your door. And that expertise in a very complex industry is what

is making us different. So we don’t want to lose sight of that.
However we do see that grosses process of developing meal

solutions and prepared meals is a very important part of our
business. So helping them with all parts of their business is

definitely on the roadmap.