Gamification in Grocery: Boosting Engagement With Caper Carts

Hello, everyone, this is Omnitalk Retail.

I'm Chris Walton.

And I'm Ann Mazinga.

And we are here kicking off day two of grocery shop from the fusion group's booth, Booth a 210.

And Ann.

Yes, standing between us is a man named David McIntosh, who happens to be the chief connected stores officer at Instacart.

David, welcome to Omnitalk.

Thank you for having me.

Yeah, we're excited to have you.

There's been a lot of Instacart announcements, I feel like since we stepped foot in Las Vegas especially, but I'd love to start by just giving the audience a little bit of your role and what chief connected stores officer means.

Exactly what are you doing in your day to day and a little bit about your background.

Yeah, happy to share.

So connected store at Instacart is a full suite of solutions that we have to really bring retailers online and digitize their business.

And the inspiration for connected store really came at the center of two insights.

Okay, so one, a lot of our users, our customers online were saying, hey, Instacart, I love the convenience and the personalization of delivery, but I also shop in store.

Yeah, can you Instacart, help me take what I love about online and bring it in the store?

And then our retailer partners were also coming to us saying, hey, Instacart, you've helped me, bring me online.

So if you look at the Instacart business, we not only operate a marketplace, but operate products like Storefront Pro and connect that help retailers like Sprouts and Wegmans and Costco bring their businesses online.

And so a lot of our retailer partners have very deep relationships with us and we're saying, look, Instacart, you've brought my business online.

Can you help me digitize my store?

How can I drive higher penetration of my loyalty programs in store?

How can I digitize my customer bases in store?

How can I unlock new revenue streams on store in store?

And so connected store really sits at the intersection of both those consumer insights and those retailer insights.

And we operate a full suite of technology.

So caper, which I just showed, demo AI powered smart cart foodstorm, which digitizes the deli.

We have a product called carrot tags, which is actually a software layer on top of electronic shelf labels like fusions.

We have in store mode, which helps people plan a trip to the store and a variety of other technologies that digitize the store.

So, David, I'm curious, so are you kind of a one of one, like a connected stores officer?

Like, I don't know of that title anywhere else?

Are you the only one that has that title?

Good question.

In the industry here at grocery shop, you very well might be right.

Yeah, perhaps.

I mean, I think Instacart is unique in that it both has a scaled online business.

Right.

And is investing in store and really bridging the two together.

And that was sort of another thesis of connected store, which is, how do you unify the experience?

Right.

And so our vision is really on a five year horizon.

Customers don't have to choose between shopping in store online.

It's one unified mode powered by Instacart.

It's kind of been one of the key themes of this conference already, too.

So I'm curious.

So as you think, because as you think of that, I mean, you're kind of blazing new trails in a lot of ways here for the industry, and you mentioned some of the solutions that you're providing to the grocers, and we want to talk about those more, too.

But as you step back from it, take a 30,000 foot view for our audience.

What are some of the areas of impact that you think are most important to create that connected store of the future?

Yeah, a couple things, I think.

One from our perspective is it starts with a screen that's digitally enabled.

Okay?

If you've got a screen in front of a customer that they're engaged with, that's where you can start to deliver these moments of delight.

Okay?

So our announcement, that's a necessary condition.

The screen.

You need.

You need the screen.

Okay.

And then second, from our perspective, you need sensors.

So if you think about the caper cart, there's not only camera sensors on the cart that sense what you're putting into the cart, but there's also a digital scale, a way to measure certified sensor.

There's a location sensor.

And so, really, our thesis is it's the combination of these sensors combined with the screen that allows you to unlock these new experiences in the store that are incremental to cpgs, to retailers, and to consumers.

Well said.

That's.

Well said.

And let's dive into the capercare a little bit more, because as I alluded to earlier, you announced gamification happening on these cards, but let's talk about kind of everything that's possible now with the caper card, if you don't mind.

Yeah, yeah.

Happy to.

Excited for the announcement that we have, and it really leans into existing behavior we were seeing.

When I went to users in the store, I was telling this to Chris earlier, and I asked them why are you using kpop?

I think there's a little bit of a misconception that it's all about skip the line.

It's all about fast tracking users.

You mean the consumers shopping with the cards?

Exactly.

Okay.

Consumers shopping with caper.

And when I talk to users, they're saying, hey, I love the ability to track my total.

Okay, I want to.

Caper helps me save money, the running total, the coupons, the discounts.

And of course, customers like bag as you go.

They like the seamlessness, but it's really capabilities rooted in the screen.

And when I observed customers using Capr, I often saw kids drag their parents to the cart and say, let me scan.

And so what we saw is that caper was really becoming an adventure for families and couples shopping.

Their words, not mine, by the way, the word adventure.

And so with the announcement around gamification, we're really leaning into that core customer behavior, and we're enabling things like streaks, which are sort of allowing retailers and cpgs to reward certain behaviors in the store.

Most like little mini games that customers can do.

We have capabilities like spin to win, which I think you used, Chris, earlier.

You can actually spin a spinner.

Right.

And it's things like that that really lean into making the grocery experience more delightful, more fun, while also driving incremental value to cpgs, because they can sort of shake customers out of autopilot and participate in this ecosystem and offer new rewards to customers.

Yeah, David, I know it's great for the.

The retailers, the grocers who are using these cards.

I have one question specifically around, like, the hurdle of getting people to use them for the first time.

But what we've heard from retailers who we've interviewed who are using them in store now is that once people use them, they love them and they only want to use them.

How do you think about talking to your retail partners about how to get people, their customers over that initial hurdle of doing that?

And is gamification in a way that you think is going to help them do that?

Absolutely.

A great question.

100%.

Gamification is part of the formula.

Okay.

I will tell you that what we're also seeing, I shared this data point with, with Chris earlier.

We announced in prior earnings that within the first couple weeks of launch, we saw, you know, on a peak day, 10% of in store dollar volume through flow through these.

These ten caper carts we had in the store out of hundreds of carts.

So we are seeing that natural consumer adoption.

I think there's a couple of things that are critical so one is, it sounds obvious, but the carts have to be available and charged.

And so things that we've built, like stackable charging, where the carts just nest into each other to charge, seem subtle, but are a big deal, because if you don't have that, then staff have to plug in each, chart, each cart individually, which becomes a huge burden.

Inevitably, people forget to do it.

And so things like that stackable charging functionality make sure they're consistently available for customers, which sort of sits at the very base of the pyramid.

You need them to be consistently available for customers to use it.

Another element is the carts have to be in the same areas, the traditional carts.

Again, it sounds obvious, but it's one of those things where when customers see it, it can't be in a back room somewhere that they have to drag.

They have to be next to the traditional carts.

And so things, again, like the stackable charging, the fixed charger.

You made this observation earlier, Kristen.

If they don't stack into each other, where do you put them?

You can't.

Yeah, right.

You have to think about that.

They have to fit into the retailer mind.

And then to your point, what we're already seeing is customers love the gamification capabilities, the value capabilities.

We hear from customers that a friend told them about the fact that they can do spin to win in a store, that they can play these gamification capabilities in the store.

And so you sort of see caper go viral within a community in some cases.

When we launch, we've even seen a line to use the caper carts in the store right after launch.

And so there is that consumer pull that we're seeing in the market.

And then I think the final thing that I would say on this front, again, it seems obvious, but the carts have to be generally available when customers are shopping the store.

So some partners we see launch and they say, okay, well, you know, we want to start service of caper at 09:00 a.m.

or 10:00 a.m.

until maybe 07:00 p.m.

because it's a new technology.

But what they often see is that customers will then complain.

I heard about this actually yesterday, where our customer will say, hey, look, why can't I use it?

I used it yesterday at, let's say, 01:00 p.m.

i'm now in the store at 08:00 a.m.

it's that consistency that builds that habituation.

And so then it's things like the fact that the carts are able to be charged with sackable charging.

It's things like that.

We call it caper Cloud, the tooling that we make available to retailers to manage the carts easily.

Those things account sounds subtle, but have a really big impact on making sure the basics are there.

I.

Which is the carts are available for customers to use it consistently, which you then can stack some of the other capabilities like gamification on top to further drive adoption.

David, I'm curious just to go a little bit further and maybe even put you on the spot a little bit, too.

So do you have any statistics that tell.

Tell us or tell our audience where the customer adoption actually is right now in terms of usage rates or anything of that nature?

Yeah, I think in terms of overall adoption, the best stat is that within a couple weeks of launch at a schnuck store, we got to 10% dollars peak going through just ten carts in the store out of 100.

And the reason 10% matters, by the way, is because if you think about online grocery, it took online grocery a decade to get there.

So that's really exciting.

I think the other thing that is exciting is that in one retailer, we're seeing more than 40% of orders have coupons associated with that.

People are actively clipping coupons.

And so it gives you a sense of the depth of interaction people have with that screen.

And the fact that couponing value is a really big part of the overall proposition.

Right.

Which is a.

Which is a big deal for the CPG, is because of the measurement that comes with it, by way of the sensors that you talked about in the beginning.

The other unlock for me in this conversation today, and even at this, this show, too, is.

Is what you said that I want to make sure the audience heard, too, is it's less about the just walk out idea.

Right.

It's less about the cashier, less shopping experience, and it's more about the better experience by way of couponing, by way of knowing the budget that you're spending in real time as you're shopping, that's a big unlock, which I think initially that was not how these things were sold.

Right?

That's absolutely right.

When you heard me go to market with this product, and we think we put our first card in store maybe a little bit more than a year ago, the new model three, I'm talking about, you know, our pitch was very much, this is about skip the line, right?

This is about, you know, getting customers out of the store faster, alleviating lines in the store.

And to be clear, customers still value that.

That's a thing.

But when you talk to customers and you ask them, hey, why are you using this more often?

Not, it's, I want to track my total.

I want a budget.

I love the couponing.

I love the gamification.

I love bag as you go.

It's more seamless.

And of course, skip the line.

Seamlessness is in that list of the top five.

But really, what we're seeing is it's the screen, it's the engaging screen.

That's the unlock here.

And then when you pair that screen with the sensors on the cart, location based sensors, the camera sensors, the weights and measure sensors, that's where you can create the win win for cpgs, for retailers, and for the consumer.

Okay, so let's get you out here on this.

So putting our store of the future hat on, or our connected store of the future hat on, however we want to, whatever moniker we want to use, a grocery store is a really complicated operation.

Right.

And you guys have a solution in a number of areas, but there are so many more areas that you could, quote, unquote, connect.

Yeah.

How do you create the roadmap in your role and decide where to go next?

Yeah, that's a great question.

I will tell you what we did for connected stores.

We just started with, what are our retailers saying and what are our consumers saying?

And that helped us stack rank the list of priorities in the store.

And we also look for areas where we already have an existing ecosystem.

So one example is, if you look at our carrot tags ecosystem, we activated pictilite.

And so pick to light is available chain wide at all these stores in the US.

So anytime an Instacart shopper goes in an Aldi store, they can tap a button on the shopper app and actually activate the tag.

And that improves the order quality, the found rate, the efficiency.

And so that was something extended out of the fact that we already have a highly engaged, scaled shopper base.

And we said, how can we digitize the store in a way that makes life easier for the shoppers going into the store?

You know, another example was the food storm acquisition that really evolved organically out of, you know, an understanding that for a lot of our retailers, they were struggling with prepared food.

They wanted a better solution to manage prepared food.

So much of the deli today is still pen and paper, which leads to order, you know, inaccuracy.

As you were saying earlier, you got.

To speak in my language on this one.

You got to stand in line.

Right?

Like, nobody wants to stand in line at the deli.

And so really, what we look for is where there are existing pain points from our customers, from our retailers.

And then on top of that, as you saw with Caper earlier, we're now really connecting these solutions.

You can sort of think about, caper is this digital hub that we're bringing to the store, and we say, okay, well, now that a customer's engaged with the screen, they're putting in their loyalty.

Maybe they want to take their shopping list that they built online, or maybe they just want to take what they bought online and sync it to the cart so they can easily shop it.

Right.

Now that they're using the cart, maybe they want to activate the tags in the store so they can more easily find something.

Now that they've got the screen in front of them, maybe they want to put an order in front of the deli.

And so, at a high level, we're really thinking about, what are the moments throughout the store where a consumer has problems that can be solved with diffusion of a screen and digital sensors on the cart?

The consumers and the associates, too.

Right.

So the screen and the sensors applies to both, if I'm hearing you right, right.

That's 100% right.

To make this work, you've got to think about all the stakeholders.

You've got to think about the users.

You've got to think about the retailers.

Right.

And that's where things like, you know, we announced previously that, you know, retailers are seeing significant basket lifts from caper.

You got to think about the cpgs.

How do you let cpgs participate in a new way?

And then finally, you have to think about cbgs.

Get the screens, too, the associates.

It's got to be a win win win for all four.

Well, David, I have to thank you for giving us so much of your time today for the tour of the caper cart, which Chris will be filling us all in on later.

Yeah, we got to stop by there later and give you a look at that.

It's pretty slick.

Yeah.

Thank you so much to the fusion group for making all of our grocery shop coverage possible today.

We are going to be here all day today in Booth a 210, so thank you again to them.

Thanks to David McIntosh of Instacart.

And until next time, be careful out there.