Instacart Is Selling More Ads on Its Smart Grocery Carts

Instacart is equipping grocery carts with more ads. The online grocery service is rolling out three new ad formats that appear on the screens built into Instacart’s tech-enabled grocery carts, called Caper Carts. The carts use AI and retailers’ loyalty card programs to serve up personalized offers based on the location and past purchases of shoppers. The carts connect to an Instacart account where shoppers make lists, which can be checked off as they shop around stores. The carts also keep a rolling tally of the price of a shopping trip, and technology detects when items are added or taken out of the carts. General Mills and PepsiCo have tested ads on Caper Carts. Grocers including Kroger, ShopRite, Bristol Farms, and Schnucks are using the Caper Carts. “By testing tailored advertising on Instacart’s smart Caper Carts, we can connect directly with consumers the moment they turn down an aisle, highlighting products and offers that resonate with their specific shopping preferences,” said Mike Glaser, PepsiCo’s VP of commerce, in a statement. More ads in stores One of the ad formats is a mini-game called Quests that unlocks rewards and credits for products when shoppers complete them. Quests are custom ad formats that Instacart is selling to retailers and brands. In one example, following and completing a treasure map of the store from the cart’s screen could trigger a flash deal to appear for a product that a shopper hasn’t previously purchased. Shoppers can also earn a coupon for using Caper Carts each time they shop. The other two ad formats are location-based inside stores. A coupon format lets advertisers promote coupons that use Caper Cart’s indoor mapping technology, based on what products someone typically buys. For example, a shopper who buys bananas every week could see an offer for fruit as the cart moves into the produce section. According to Instacart, more than 40% of shoppers who use Caper Carts use such coupons when shopping. Instacart is also selling a more creative, rich media ad format that is location-aware. The ad format uses a brand’s creative to alert people when they are nearby to a product. For example, turning the carts down the coffee aisle could trigger an ad for a coffee brand to appear on the cart’s screens. Andrew Lipsman, an independent retail media analyst, told ADWEEK that ads on Caper Carts could help show brands that in-store ads drive sales and increase shoppers’ spending. Most in-store ads—like signage that hangs on shelves or end caps—are pitched as branding opportunities for marketers to reach a mass audience. “It can be more performance-based and leverage data about the consumer that isn’t going to work on other surfaces,” he said. However, ads on smart carts can be polarizing, Lipsman said. Shoppers heavily influenced by coupons and offers are more receptive to ads while other people are turned off by a bombardment. “That says that there’s a big opportunity here—just maybe not for every shopper,” he said. It’s also not clear how many shoppers choose to use a smart cart instead of a regular shopping cart when entering a store, he said. “It has to become a little bit more ubiquitous—it’s recognizing the reality that it’s a new technology,” Lipsman said. “With a huge market, you have to make sure that the product is right before they scale it out.” Shaking up physical retail Most of Instacart’s ad business comes from digital ads sold on its ecommerce website and other retailers' websites. The goal with ads on Caper Carts is to expand the number of surfaces on which Instacart can sell ads. Instacart began testing ads on Caper Carts this year after acquiring Caper AI—the maker of the smart carts—in 2021 for $350 million. Caper Carts is part of Instacart’s bigger connected stores strategy to pitch retailers technology that digitizes stores where the bulk of grocery shopping takes place. The play for retailers’ tech budgets could help Instacart in winning more of its core regional and independent grocers that don’t have big budgets to change stores, said Lipsman. “They have the potential to power a large portion of the in-store grocery experience, particularly regional and independent grocers,” he said.

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Instacart Is Selling More Ads on Its Smart Grocery Carts

New ad formats help brands reach in-store shoppers

Lauren Johnson

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