AI Online and In-Store: Powering the Omnichannel Experience

People say “I’m going to the grocery store” all the time. But when I first started as CEO of Instacart, my family and friends would whisper it around me — like I’d somehow be offended that they were going to a physical store instead of ordering online. 

I love Instacart. I also love going to the grocery store from time to time. And I’m not alone. Studies estimate that 12% of all grocery shopping was happening online in 2022 with that number expected to double, or more, over time. That means a lot of shopping will still be happening in store. Third-party data* also shows that customers who shop online and in store are more valuable for grocers, since they tend to spend more (40+% larger baskets), shop more frequently (10+% higher monthly frequency), and have a greater lifetime value (60+% higher lifetime value). 

That’s why the future of grocery — and commerce in general — isn’t online or in store. It’s both. When we’re busy, the convenience of delivery makes sense. If we’ve got time and want to browse or pick our own produce, going to the store may be the better option that day. There is value in both ways of shopping, but more importantly, the online experience should help make your in-store experience better, and vice-versa.

Imagine if all the preferences you expressed and all the personalization you experience online could also accompany you when you go to the store. And imagine if the online experience had the same ease of discovering new products and the same immersiveness as browsing the aisles of your favorite store.

That’s why, mere weeks on the job, I decided to acquire Caper — a company that makes AI-powered smart carts.

For customers, it’s all about making shopping in a physical store faster, easier, more personalized, and more inspirational. Instacart’s Caper Carts automatically recognize physical items using computer vision AI, allowing you to bag as you shop, navigate the store, and check out from anywhere. But as importantly, it allows you to take all of your online information and bring it with you to the store. The Caper Cart syncs directly with your online account to display your shopping list on screen, so you can easily remember everything on your list. On-screen coupons and promotional offers make it easy to access personalized deals as you walk the aisles. And once you're done with your in-store shop, you can easily re-order online all of the great items you found in your local store, with just a couple of taps.

Retailers are launching this AI-powered, in-store tech across the country. And today we announced that we’re expanding our partnership with regional grocery favorite, Schnucks. Over the next few months, they’ll be rolling out the newest model of Instacart’s Caper Carts.

I’ve already written about how I think AI will enhance the online grocery shopping experience by bridging the gap between the way people naturally ask questions (like “What’s for dinner?”) and the way software applications like ours deliver results, making it easier for people to plan meals for their family, improve their diet, discover new products and more. But with phones and large screens on hardware like Caper Carts being used in the store, we also have a chance to bring all of these magical online planning, health and discovery experiences powered by AI to the store. That’s a big deal. 

AI can also make life easier for retailers by enhancing important systems and processes like in-store promotions, in a way that customers benefit from. That’s why we acquired Eversight — a company that optimizes in-store pricing in response to real-time conditions. Eversight delivers higher ROI on promotional spend, which is a win for retailers and customers, and why retailers like Schnucks and Raley’s have already deployed this in their stores.  

Looking ahead, AI could also help optimize the entire supply chain. 

The grocery store is the final link in a very long and complex supply chain. In the future, it’s easy to imagine a world where AI-powered stores send information about customer behavior and demand back to all other nodes on the supply chain, helping them operate more efficiently. 

This could have major implications for things like food waste and sustainability. With AI-powered transactions, retailers can do a better job predicting inventory so items are never out of stock and less food goes to waste. AI could also help give people more information about where their food comes from — encouraging sustainable practices and boosting local economies.

Then there’s the potential for independent, local and personalized products. With AI, we could better predict what products could be popular in specific areas, feed those insights back to brands, and help customers discover more independent and local products. 

These are just the kinds of changes we can predict. Over the next few years, AI will change grocery shopping in expected and unexpected ways — ultimately making the entire food system better. And that will be true whether you’re shopping online, in store, or a little bit of both. 

*Based on analysis of third-party data from Earnest Analytics; “omnichannel” customers = in-store customers who spent over 10% of 2022 wallet online at a representative sample of US grocery retailers.