Instagram has been one of the leaders in democratizing eCommerce and shoppability over the past few years. Now another “Insta” is doing similar: Instacart. With this week’s acquisition of eCommerce platform Rosie, it brings easier eCommerce functionality to local retailers and grocers.
Specifically, Rosie offers local businesses branded eCommerce websites and mobile apps. That includes end-to-end functionality from front-end store design and product pages to back-end order flow, fulfillment, and analytics. These are all table-stakes features in eCommerce platforms.
Rosie also boasts additional features such as the ability to easily produce shoppable weekly ads and rewards programs. It also prides itself as an open platform with the ability to integrate other best-of-breed software for key functions like logistics and payment processing.
Retain and Recur
Stepping back, everyone wants a piece of eCommerce. This is partly Covid accelerated but also follows a longer-standing trend started by Shopify and WooCommerce to democratize advanced eCommerce. A more recent example is BlueHost’s eCommerce integrations which we covered earlier this week.
In all cases, it’s about broadening service offerings, which accomplishes a few things. It can expand ARPU as well as customer retention. The latter happens as deeper functional software integrations create switching costs for busy SMBs. And SaaS is all about retention and recurring revenue (ARR).
In Instacart’s case, like BlueHost and others that have expanded into eCommerce, there’s some adjacency that makes it integrate naturally into a bundle. That includes onboarding which, in this case, can be an easier process given that Instacart already has many grocers’ product and POS data.
Rosie could also be a natural addition from a sales perspective. In other words, Instacart has an established installed base of retailers using its platform, making eCommerce integration a softer sell. This gives it an edge over eCommerce platforms that don’t have that inside track.
Buy vs. Build
All the above comes to Instacart through a “buy rather than build” approach. This usually indicates an emphasis on speed-to-market, which may signal Instacart’s strategic thinking. Given the land grab for eCommerce among SMBs (again, Covid-accelerated), this rapid go-to-market approach is logical.
Meanwhile, terms of the Rosie acquisition weren’t disclosed but the Ithica, NY-based startup has raised $11.9 million to date. Moreover, Rosie marks Instacart’s second acquisition this week – following the acquisition of AI-powered pricing and promotions platform Eversight – and fourth in the past year.
