Instacart and Petco expand partnership to offer one-hour delivery in 14 cities

April 29, 2015 01:52 PM

Grocery delivery service Instacart Inc. has expanded its relationship with pet supplies retail chain Petco Animal Supplies Inc. after earlier this year testing fast delivery in Boston and San Francisco, where Instacart was founded in 2012.

The Petco partnership marks the first nongrocery offering from Instacart. "We are thrilled that Petco has been so well-received by Instacart customers and look forward to making the service available to customers throughout all of our markets," said Instacart founder and CEO Apoorva Mehta. "Our model is designed not only to make customers happy but also to help all types of retailers be able to offer the convenience of delivery without the logistical hassles or capital expenditures.”

Some industry experts, like Forrester Research e-commerce and multichannel retail analyst Sucharita Mulpuru, say only a small group of Petco customers will be interested. “It's not a big group of people who will pay for this—maybe 10% of buyers—will pay for the service, but it's a nice service to add so long as the retailer doesn’t have to absorb the full cost. That's most important,” Mulpuru says. “As Instacart is still in growth mode, I am sure they're investing in this.”

Instacart connects shoppers with independently contracted personal shoppers that provide their own transportation, eliminating expenses for warehouses, inventory and trucks. For orders over $35, shoppers pay $3.99 for two-hour delivery or $5.99 for one-hour service. For orders under $35, customers pay $7.99 for two-hour delivery or $9.99 for one-hour. Customers also can sign up for Instacart Express, which carries a $99 annual membership and eliminates delivery fees for purchases over $35.

Instacart’s network of personal shoppers will select from more than 11,000 items from local Petco stores and deliver them in as little as one hour to shoppers in the following metro areas: Atlanta, Austin, Boulder, Boston, Chicago, Denver, Houston, Los Angeles, Philadelphia, Portland, Ore., San Francisco, San Jose, Seattle and Washington, DC. Petco expects to offer the fast delivery service in New York City later this summer. Instacart says it plans to add more cities before the end of 2015.

"Customer feedback has been positive and we see same-day delivery in these 14 cities as a key component of Petco's consumer-focused omnichannel offering," Brad Weston, Petco’s executive vice president and chief merchandising officer, said. Petco is No. 275 in the newly released Internet Retailer 2015 Top 500 Guide.




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