Instacart Launches Marketing Solutions as Grocers Boost Loyalty with Coupons

Instacart is adding new targeted promotions tools as grocers seek ways to retain deal-chasing customers.

On Monday (March 27), the grocery technology giant announced the launch of its Instacart Marketing Solutions suite, offering capabilities to target deals and discounts, offering data and insights on campaign effectiveness.

“We know affordability is top of mind for consumers across the country right now. It’s also top of mind for our retail partners, who are looking for more ways to help their customers save when accessing the groceries and goods they need,” Instacart Chief Business Officer Chris Rogers said in a statement.

Indeed, many grocers believe deals are key to maintaining shopper loyalty in the face of cost pressures. Data from PYMNTS’ study “Big Retail’s Innovation Mandate: Convenience and Personalization,” created in collaboration with ACI Worldwide, which draws from a survey of 300 retailers across the United States and the United Kingdom, finds that three-quarters of grocers think consumers would be very or extremely likely to switch merchants if digital coupons and rewards were not provided.

Plus, shoppers agree that discounts improve their experience. The “2023 Global Digital Shopping Index,” a PYMNTS and Cybersource collaboration, which draws from consumer panels from six countries spanning more than 13,000 participants, finds that 80% of U.S. shoppers who used coupons were very or extremely satisfied with their experience. In contrast, only 60% of those who did not use coupons said the same.  

Instacart’s Marketing Solutions program, for its part, includes three tiers for merchants — a basic, self-service option; a “Campaign Management” offering, which includes more media buying options and help from the aggregator’s marketing team; and a “Strategic Partnership” tier, which includes Instacart’s help on marketing shoots, influencer partnerships and more.  

The company also announced that it would allow consumers to sign up for grocers’ loyalty programs through the merchant’s Instacart storefront, making it possible for them to use retailers’ programs when they shop on the aggregator. This feature may considerably change the loyalty game for grocers, considering that, in the past, rewards programs have been a way for grocers to drive direct ordering in the face of competition for third-party aggregators.

“With the launch of Instacart Marketing Solutions and our expanded loyalty programs, we’re developing new technology tools that empower retailers of all sizes to create strategic digital campaigns and unique loyalty programs that engage their customers, grow their business and, ultimately, help customers find more savings at checkout,” Rogers said.

The news comes at a time when grocers are split on how to approach their loyalty programs, with rising food prices putting pressure both on grocers’ margins and on consumers’ loyalty.

Some grocers have been investing more in the space, such as Michigan-based supermarket chain Meijer updating its mPerks loyalty program earlier this year to improve its rewards personalization capabilities. Others, meanwhile, have been scaling back. For instance, Tesco, the leading supermarket chain in the United Kingdom, recently shared that it is cutting the exchange rate of consumers’ loyalty vouchers with rewards partners by a third, starting in June.

Yet loyalty and targeted discounts are especially key now, with nearly half of all consumers motivated by savings. Research from PYMNTS’ study Consumer Inflation Sentiment: The False Appeal of Deal-Chasing Consumers, which draws from a February survey of more than 2,100 U.S. consumers, finds that 44% say finding better deals has become a much more — if not the most — important factor when choosing where to buy retail or grocery items. Moreover, that share has increased steadily over the last six months.