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Instacart eyeing delivery for small business

Contending with a rapidly declining internal valuation, grocery delivery platform Instacart is continuing its push beyond supermarkets and convenience stores.

The Information reported Tuesday that the company is preparing to launch a service geared specifically at small businesses, citing an unnamed source said to be familiar with the matter.

Currently being developed under the name Instacart Business, the new service would deliver items like office supplies and cleaning products, helping Instacart keep pace with the small business offerings of companies like Amazon and Walmart as it gears up for an IPO.

According to the source, there is no launch date slated for the project.

A move into small business delivery wouldn’t come as a surprise for Instacart, which in recent months has been experimenting with new verticals to grow market share. In August, for example, it added its Big & Bulky fulfillment service, which delivers items like furniture and electronics.

It would also make sense given the moves its competitors have made. DoorDash and Uber Eats, for example, each have launched several grocery delivery initiatives, and the latter has introduced a pair of local parcel delivery services, Uber Direct and Uber Connect.

Watch: How can consumer brands swell effectively on Amazon and Instacart?

Amazon, meanwhile, offers a small business version of its Prime subscription, while Walmart does the same with its e-commerce site.

Then there’s Instacart — for the most part, it has remained mired in the online grocery space, which lags behind online restaurant delivery. According to research from Pymnts, about half of consumers engage with restaurants on digital platforms, but less than 40% do so with grocers.

However, the numbers are much more favorable for online retail. According to McKinsey, online U.S. retail sales grew 40% year over year in 2021. Plus, about three-quarters of all U.S. consumers made purchases both in-store and online.

The expectation is that consumers will continue to seek out e-commerce sites when searching for retail items. And if that’s the case, Instacart may be able to tap into some of that online activity by selling items like office supplies.

Click for more FreightWaves articles by Jack Daleo.

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