Develop Instacart-Like Grocery Apps Better Than Instacart, Shipt, Peapod & FreshDirect

The rapid rise of grocery delivery services has transformed the way people shop. Apps like Instacart, Shipt, Peapod, and FreshDirect are household names in this space, making it easier than ever for consumers to get their groceries without leaving home. However, even with their widespread success, there is still significant room for innovation and improvement. By developing an Instacart-like grocery app, but with enhanced features, a smoother user experience, and improved business strategies, you can create a platform that outperforms the market leaders.

In this guide, we will explore what it takes to build a grocery app, how it works, how you can generate revenue and the associated costs. If you’re aiming to build an app that competes with or surpasses Instacart and others, this is the roadmap for you.

What is Instacart?

Instacart is one of the most popular grocery delivery services in North America. Launched in 2012, the platform allows users to order groceries online from a wide variety of grocery chains, including Safeway, Costco, Aldi, and Kroger. Instacart doesn’t own any of the stores it serves; instead, it partners with local and national retailers to provide a convenient grocery delivery solution.

By connecting customers to personal shoppers who pick and deliver the items, Instacart ensures that users get their groceries from the stores they prefer, without having to leave the house. The platform offers same-day delivery services, typically within a two-hour window, and has seen enormous success, particularly during the COVID-19 pandemic, when online grocery shopping became essential for millions.

The Statistics

eMarketer has gathered a lot of data for Instacart-like grocery apps. According to them,

• Instacart-like grocery apps are one of the fastest growing mobile app categories in the US.
• According to them, in 2017, 12 million US adult smartphone users used at least one of the Instacart-like grocery apps at least once a month.
• In 2018, approximately 18 million US adult smartphone users did the same. That is 50% more than the previous year.
• They estimate that in 2019, over 22.6 million from the same user group will have used such an app.
• The number of US adults using Instacart-like grocery apps will cross 30 million by the end of 2022.

Most downloaded grocery delivery apps in the United States in 2024

In 2024, Instacart was the most downloaded mobile application for grocery delivery in the United States, with over six million downloads. 7-Eleven ranked second, with roughly 2.4 million downloads, followed closely by Gopuff, with 1.5 million.

How Does Instacart Work?

Instacart operates as a bridge between customers, grocery stores, and personal shoppers. Here’s a detailed look at how the service works:

Browse and Shop

Customers log in to the Instacart app or website, enter their location, and choose a grocery store in their area. They can then browse the available items, add them to the cart, and select a delivery time slot. The app provides real-time product availability, which is updated regularly based on the inventory in the selected store.

Placing the Order

Once the customer finalizes their shopping cart, they proceed to checkout. At this stage, users can also add specific notes for the personal shopper, such as preferred brands or instructions for handling substitutions if a product is out of stock.

Personal Shopper Picks Items

After the order is placed, it is assigned to a personal shopper who physically goes to the selected store to gather the items. Instacart shoppers are notified of any special instructions and substitutions during this process, keeping the customer informed if any items need to be replaced.

Delivery

Once the personal shopper has completed pickingup the order, they deliver it to the customer’s address. Depending on the delivery window chosen, this can happen within as little as an hour or at a later scheduled time.

Instacart’s operational model focuses on providing customers with a seamless experience that connects them to multiple grocery chains through a single platform. However, despite its success, there are opportunities to build better, more refined grocery apps that address some of the common challenges users face with the platform.

How do you Build a Grocery App like Instacart?

Building a grocery app that can compete with industry giants like Instacart, Shipt, and Peapod requires understanding the technology and identifying key areas where you can provide a better user experience. Here are the essential steps to building a competitive grocery app:

1. Market Research and Gap Analysis

Before starting development, you need to study your competitors thoroughly. Analyze what existing platforms offer and identify gaps or areas where users are not fully satisfied. Instacart, for instance, has received criticism for inconsistent inventory management, late deliveries, and occasionally inaccurate substitutions. These pain points represent opportunities for you to develop better features that address these issues.

2. Core Features Your App Should Include

To build a competitive app, you need to offer core features that align with user expectations while adding value with unique, enhanced features. Here’s what you need:

User Account Management: Users should be able to create accounts, save their preferred stores, track their orders, and view past purchases.

Inventory Management: Ensure that your app provides real-time product availability by partnering closely with stores and integrating inventory systems.

Shopping Lists: Allow users to save and reuse shopping lists, which can significantly improve the user experience for frequent shoppers.

Geo-Tracking: Enable customers to track the location of their personal shoppers in real time to know when their groceries will arrive.

Push Notifications: Send timely updates regarding order status, delivery timings, or even personalized deals.

Multiple Delivery Options: Offer users a range of delivery windows, from one-hour delivery slots to scheduled deliveries for later in the day or week.

AI-Powered Recommendations: Use artificial intelligence to suggest items based on past orders, preferences, and popular trends.

User Ratings and Reviews: Let users review products, stores, and even the personal shopper, creating transparency and trust within the platform.

3. Technology Stack for Your Grocery App

Selecting the right technology stack is crucial for building an app that is scalable, secure, and user-friendly. Here’s a recommended tech stack for developing a grocery app:

Frontend: React Native or Flutter for cross-platform mobile development. Both allow you to develop apps for iOS and Android using a single codebase, reducing development time and costs.

Backend: Node.js, Python (Django), or Ruby on Rails for efficient server-side processing and real-time data management.

Database: Use MongoDB or PostgreSQL for handling product catalogs, user data, and order history.

Payment Gateways: Integrate secure payment systems such as Stripe, PayPal, or Square for smooth transactions.

Cloud Hosting: AWS or Google Cloud for cloud infrastructure, ensuring scalability, speed, and data security.

APIs: Integrate Google Maps API for geolocation tracking, and Twilio API for sending SMS notifications and confirmations.

4. Partnering with Grocery Stores

Just like Instacart, you will need to form partnerships with local grocery stores and supermarket chains. By establishing direct relationships, you can ensure product availability, negotiate commissions, and even secure exclusive discounts for your users.

5. Launching the Minimum Viable Product (MVP)

Start by developing an MVP that includes the essential features for grocery shopping, such as browsing items, placing orders, and tracking deliveries. As you gather user feedback, iteratively improve the app by adding advanced features like personalized recommendations and loyalty programs.

How to Make Money from a Grocery App?

Monetizing a grocery delivery app is a key concern for developers. There are multiple revenue streams you can explore, and it’s important to have a diversified monetization strategy:

1. Delivery Fees

Similar to Instacart, you can charge users a delivery fee, especially for express delivery options. Delivery fees can vary based on the urgency of the delivery, order size, and distance between the store and the customer.

2. Membership and Subscription Plans

Offering a subscription service, like Instacart Express, can provide a steady stream of recurring revenue. For example, you can offer free delivery or lower service fees for users who subscribe to a monthly or annual membership.

3. Commissions from Partner Stores

Every time a user places an order through your app, you can take a commission from the partnered grocery store. This model encourages stores to list their products on your platform and provides you with a consistent income stream.

4. In-App Advertising

Partner with brands to display advertisements or sponsored product listings within the app. For example, brands can pay for premium placements at the top of search results or as featured products on the homepage.

5. Service Fees

Charging a service fee for every transaction can help cover operational costs such as shopper compensation and customer service. Service fees typically range between 5-10% of the order value.

6. Partnered Promotions

Partner with stores, brands, or local businesses to run promotional campaigns or offer exclusive discounts to users. This can encourage more people to use your app while generating additional income through partnerships.

Instacart Business Model: How Does Instacart Make Money?

Instacart employs a multi-faceted business model that includes several revenue streams:

1. Delivery Fees

Instacart charges delivery fees that start at approximately $3.99 for orders above a certain threshold. Fees may vary based on delivery speed and distance.

2. Instacart Express Membership

Instacart offers a subscription service called Instacart Express for $99/year, which provides users with unlimited free deliveries on orders over $35 and reduced service fees.

3. Partner Store Commissions

Instacart earns revenue by charging grocery stores a commission for each order placed through its platform. This commission incentivizes stores to partner with Instacart, as they gain access to a larger customer base.

4. In-App Advertising

Brands can pay for premium placements and promotional ads within the app, allowing them to increase visibility among consumers.

5. Service Fees

Instacart charges a service fee, typically around 5-10% of the order total, which helps cover operational costs such as technology maintenance and customer support.

What is the App Development Cost to Build Apps Like Instacart?

The cost of developing a grocery delivery app similar to Instacart can vary widely based on numerous factors, including the complexity of features, the geographic location of the development team, and the technology stack used. Below is a breakdown of estimated costs:

1. Design Costs

Investing in UI/UX design is critical to your app’s success. Expect to pay between $5,000 to $15,000 for wireframes, prototypes, and user flows that create a seamless experience for users.

2. Frontend and Backend Development

Developing the frontend and backend can take approximately 4-6 months for an MVP, while a fully functional app might take longer. Costs typically range from $40,000 to $150,000, depending on the complexity and number of features included.

3. Testing and Quality Assurance

Ensuring the app is bug-free and user-friendly is essential. Quality assurance testing may cost between $5,000 and $10,000, depending on the app’s complexity.

4. Maintenance and Updates

Post-launch, maintaining the app and releasing regular updates is crucial. Monthly maintenance costs can range from $2,000 to $10,000, depending on the scale of updates and support required.

Challenges Of Instacart-Like Grocery Apps

Shoppers have become gradually used to such grocery apps, according to eMarketer. The only thing that worries them while ordering grocery, food and other perishable items is the delivery time. But grocery business owners have adopted various models to overcome this hurdle. Some of them have employed local drivers in the fashion of Instacart, while the others offer a click-and-collect facility that saves a lot of time of their customers.

The other thing that online grocery app users want is the personal touch, as in hand-select produce for their shopping needs. To meet this challenge, grocery business owners are using various tactics. They train their staff more and offer all the possible options in their Instacart-like grocery apps with crystal clear photos and descriptions. These things help users select the best product they want. As a result, 1 in 5 US adult using a smartphone now orders grocery online.

Reasons For Popularity Among Users

Instacart-Like Grocery Apps are gaining a lot of popularity among users because of many reasons.

• Users can order all of their groceries from the convenience of their home and the time they prefer. They don’t need to go, pick, pay and haul the grocery back to their home. All they need to do is a few clicks. Their grocery is delivered right at their doorsteps. It saves a lot of traveling and checkout time.
• These apps also save gas money and the energy of hauling the heavy grocery back and forth.
• They can also take advantage of various offers, promotions, discount vouchers, promo codes, and loyalty points and save additional money too.
• Shopping for others is also very easy for users when they use Instacart-like grocery apps.
• These mobile apps also save you from impulsive buying and you can keep an on the total amount of your cart too.

Reasons For Popularity Among Owners

Grocery business owners can offer heavy discounts, run promotional offers and freely distribute loyalty points. They can do so because Instacart-like grocery apps can reduce the overhead of their business a lot. After one-time grocery app development and web development, they can reduce their employees in the department of CRM, accounts, inventory management, and analytics department because the app can replace them easily.

Customer relationship management is mostly dependent on an updated database. With the help of the grocery app, the CRM database is created and updated without any extra efforts. The same is true for inventory, account, and analytics. They also need various data sets which the grocery app keeps generating instantaneously. As a result, the owner can accomplish all these things himself or hire a dedicated resource, to work as an all-in-one handyman.

Online Grocery App: The Driving Features Of Popular Mobile Apps

Features of Instacart-Like Grocery Apps

There are various types of online grocery ordering and delivery apps for the same purpose. They may differ from each other in some ways and are similar in some way too. If you want to develop Instacart-like grocery apps better than Instacart, Shipt, Peapod & FreshDirect, you have to combine all of their features and add something more out of your own thinking to stand apart.

Instacart-like grocery apps consist of three individual mobile apps and at least a website. They are available on both iOS and Android.

1. Customer Ordering App
2. Driver App
3. Admin/Owner/Partner App

In addition, the grocery delivery website should have the following section:

1. Customer Ordering Section
2. Web-Base Admin Panel

Customer Ordering App

It should have the following features:

• Social Media Login
• Sign In & Sign Up
• Profile Management
• Search & Filter
• Product Browsing & Listings
• One Click Add to Cart
• Multiple Payment Options
• One Click Check Out
• Save For Later
• Popular e-Wallet Integration
• Discount Vouchers & Coupons
• Private & Public Wishlist
• Time slot selection for Delivery
• Delivery Tracking
• Help & Customer Support
• Order History
• Ratings & Review
• Push Notifications

Driver App

It should have the following features:

• Push Notifications
• Delivery Requests: accept & reject
• Set Availability
• Map Integration
• Real-time GPS updates
• Turn-by-turn Navigation
• Total Weight Of Orders
• Delivery Time Slots
• Earning & Reports
• Work History
• Help & Customer Care
• Ratings & Reviews

Admin/Owner/Partner App

It should have the following features:

• User Management
• Reset Passwords
• Order Management
• Driver Management
• Product Management
• Payment Management
• Add, Edit & Remove Various Elements of Apps and Website
• Campaign Management For Email, SMS, Social Media
• Commission Management
• Run Promotions & Discount Coupons

Final Thoughts

If you integrate all these features and a few more from your own side, you will be able to develop Instacart-like grocery apps that are better than Instacart, Shipt, Peapod & FreshDirect.

iCoderz Solutions has ready-made solutions for Instacart-like grocery apps and website. In fact, iCoderz Solutions is a full stack mobile app development company and full stack web development company too. We have individual teams for web development, Android development, and iOS development. They have developed 500+ mobile apps and websites to prove their metal. If you are thinking about the development of Instacart-like grocery apps, look no further. Get in touch with us to know more, have a quote and timeline.

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