Dive Brief:
- Instacart has signed a deal to provide its customers with access to digital coupons delivered by cash-back rewards platform Ibotta, according to a Tuesday press release.
- As part of the arrangement, Ibotta will serve as Instacart’s preferred third-party coupon provider for all eligible product categories available on the grocery technology company’s app and website.
- The tie-up gives Instacart added heft as it competes with other grocery e-commerce providers to strengthen ties with retailers and shoppers.
Dive Insight:
Instacart’s deal with Ibotta underscores the importance for retailers and suppliers of being able to put savings opportunities in front of online shoppers still reeling from the rapid inflation that gripped the economy in the wake of the COVID-19 pandemic.
The arrangement will allow the approximately 2,400 CPGs that participate in the Ibotta Performance Network to transmit targeted promotions to millions of extra shoppers, according to the announcement. Instacart’s marketplace includes over 1,500 retail banners that collectively operate 85,000 locations in North America, the company noted.
Instacart is also looking to Ibotta to help leverage its platforms and consumer reach to drive revenue. The company has relationships with over 6,000 CPG brands, “and we believe Ibotta will help us quickly scale our CPG-funded promotions business,” Chris Rogers, Instacart’s chief business officer, said in a statement.
Ibotta has existing relationships with retailers including Family Dollar and Schnuck Markets.
Ibotta pointed in the announcement to research released in July by United Natural Foods, Inc., and Swiftly showing that more than 40% of U.S. grocery shoppers use coupons available on a smartphone — twice the proportion of consumers that use paper coupons. The data also shows that nearly half of consumers regularly depend on deals and promotions when they shop for groceries.
The deal with Ibotta reflects a broader drive by Instacart to position itself as indispensable to grocers and product suppliers in an increasingly paper-free world. The company recently rolled out a new product that digitizes retailers’ printed grocery circulars, and has found that more than a fifth of visits to digital flyers result in customers adding items to their cart.
Instacart is also working to use its extensive ties with online shoppers and trove of shopper data to strengthen its role in the fast-growing retail media space. In an example of that, Instacart announced in January that it would help food manufacturers including Danone and Kraft Heinz promote their brands on Google Shopping.
