(Bloomberg) -- Instacart is making its first international push outside the US and Canada by testing its smart shopping carts in Europe, a move the company said will lay the foundation for growth beyond its core grocery delivery service.
Instacart’s high-tech shopping carts, called Caper Carts, will be used in ALDI South Group’s grocery store in Sattledt, Austria, the companies said Tuesday in a statement. The carts — an effort Instacart began through a $350 million acquisition in 2021 — include self-checkout and are equipped with cameras and sensors to detect items. They have been deployed at metro and suburban branches of US and Canadian grocers such as Kroger Co. and Wakefern Food Corp.’s ShopRite and Fairway Market.
“We think there’s a lot of opportunity to level up the shopping experience to make it more of an adventure and less of a chore,” David McIntosh, vice president and general manager of Connected Stores at Instacart, said in an interview Monday. The company is in talks with other retailers in Europe and other continents to deploy more of its carts, he added, and it plans to have thousands of them, mostly in the US, by the end of the year.
Instacart is seeking to expand its business with enterprise offerings to grocers as it faces slowing growth in its main delivery business at home. The company, which is scheduled to report quarterly earnings later Tuesday, has been increasingly reliant on higher-margin advertising and enterprise products, which make up close to 30% of annual revenue, to boost profit.
The company wants to position itself as a technical partner for brick-and-mortar stores. It has said that customers who shop online and in-store spend two to four times more than those who shop only in-store. Instacart said one of its grocery clients, Schnuck Markets Inc., noted that customers who use the smart shopping carts in its stores end up having larger baskets than those who use regular carts.
Customers can use Caper Carts in grocery stores without an Instacart account. That means Instacart can take the carts to markets where it doesn’t currently offer delivery services, which are concentrated in the US. Instacart’s San Francisco-based rivals DoorDash Inc. and Uber Technologies Inc. provide food and grocery delivery services in a number of overseas markets, sometimes through acquiring local players.
“Our international ambitions are solely focused on Caper at this time,” McIntosh said, when asked if Instacart will expand its delivery service overseas. “But by leading our international expansion with Caper Carts, we do think we’re building the foundation to bring Instacart’s leading grocery technology to more countries.”
While still nascent, the smart carts are part of its Connected Stores suite of in-store technology products for supermarket operators: from fulfillment tools that help in-store associates pack items faster for curbside pickup orders, to offering personalized recommendations and discounts to customers on their grocery runs through advertising on the cart’s tablet or the Instacart app.
As part of an expanded partnership between the two companies, ALDI is deploying the other in-store technologies developed by Instacart in its stores across the US, the companies said in the statement. That includes installing Instacart’s electronic shelf tags that light up and make it easier for Instacart’s network of couriers to find items in stores when fulfilling orders.
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