The Shopification of Instacart

CEO Fidji Simo’s Underrated Strategy to Digitize the Mid- and Long-Tail of Grocery

In December 2021, freshly minted Instacart CEO Fidji Simo joined the Shopify board of directors. It was an interesting early move from the CEO perch that suggested designs on something bigger.

Knowing that Instacart's future hinged on its ad business—after all, one assumes this was a primary reason behind hiring the former Facebook exec—my first thought was about the potential retail media implications. Could cozying up to Shopify be part of a gambit to partner with the ecommerce platform to build a digital advertising powerhouse?

As two key platforms that underpin about 15% of US ecommerce—and are nearly perfect complements given their category strengths in grocery vs. lifestyle—I imagined a joint offering that could rival Amazon and Walmart in retail media.

While this remains a possibility (albeit remote), by September 2022, one key reason behind Simo's joining the Shopify board began to crystallize. On the eve of her Groceryshop mainstage interview, she lifted the veil on an ambitious product initiative at Instacart: Connected Stores.

Or as I would come to call it: The Shopification of Instacart.

From my vantage point, Simo envisioned Instacart as the Shopify for regional and independent grocers as they transitioned to digital commerce. Instacart could provide the full digital enablement stack for the mid- and long-tail of grocery retailers who lacked the resources to do it themselves—much like Shopify had done for D2C brands.

By 2022 grocery ecommerce had reached 10% penetration of the nearly $1.5 trillion category, but the mid- and long-tail of the grocery market was falling woefully behind. Instacart would provide the full suite of offerings to streamline their ecommerce and in-store digitization efforts.

This announcement came amid a series of acquisitions like Caper Cart (Oct 2021), Eversight (Sep 2022), and Rosie (Sep 2022) that collectively offer a glimpse into Instacart’s future.

But first Simo and the Instacart team would be tested to clear its biggest hurdle to date: a successful IPO.