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Instacart Acquires Caper AI to Redefine Grocery Shopping Experience

October 29, 2021

Instacart, the North America-based grocery delivery platform has recently announced the acquisition of Caper AI, a software technology company that develops AI-powered shopping carts, smart checkout counters, and applications notably designed for retailers, grocers, and convenience stores.

The deal is valued at approximately $350 million, aimed to support Instacart’s efforts of marking a presence in offline grocery shopping by using smart hardware technologies. The focus is toward reducing customers' wait time standing in long queues, browsing through the aisle of products, and going through a long checkout line.

Grocery Delivery Software ➜

Rise of hybrid shopping behavior

Retailers are experiencing a dramatic shift in terms of consumer buying and spending behavior since the beginning of the pandemic. There is an increase in the movement of consumers from traditional retail stores to online retailers and e-commerce marketplace. US retail e-commerce sales have seen a significant increase from 15.1% in 2019 to 33.6% in 2020. However, the year 2021 witnessed a contraction in e-commerce sales growth by 13.7% as traditional brick-and-mortar stores have started to open up. According to Brick Meets Click/Mercatus analysis, a similar contraction was also seen in the US online grocery market currently valued at $7 billion, down by 16% from May 2020.

US retail e-commerce sales analysis: eMarketer

Source: eMarketer

This signifies the importance of traditional retailers still looming large in the world of groceries. However, the focus here isn’t the never-ending battle between online versus offline shopping channels on who has a higher market share; rather, it dives deeper into the retail innovation taking place, no matter how the customer chooses to shop. Consumers shop online at their ease, but they also love having an in-store shopping experience, which ultimately gives rise to hybrid shopping behavior. Thus, the need for retailers to be omnipresent isn’t a choice anymore, it is a must as per the current market scenario.

So why has Instacart acquired Caper AI?

Caper AI, a leading smart cart and smart checkout technology startup shares the same goal of creating a unified online and in-store solution for retailers. This acquisition will help Instacart to diversify its retailer enablement platform, ranging from Instacart marketplace, e-commerce solution for grocers, and fulfillment technology supporting pickup and delivery service. 

Fidji Simo, Instacart's CEO, says:

“We’re excited to bring Caper’s leading smart carts and smart checkout platform to more retailers around the world, as we all reimagine the future of grocery together.”

Caper AI’s smart cart and smart checkout solutions come with an object recognition system integrated with cameras and sensors to recognize items placed in the cart without scanning or weighing them, hence enabling an easy and quick checkout at the store.

G2 recognizes retailer’s e-commerce effort

As the COVID-19 pandemic continues to take a toll on businesses at large or small, retailers need to keep up with the ever-changing dynamics of the industry. Many traditional retailers are interested in adding an e-commerce front to their business, and the existing e-retailers are in search of a more personalized kind of integration to their e-commerce website.

g2 category traffic to e-commerce categories

This is visible from the influx of traffic to G2’s E-Commerce category that has increased by 192% from March 2020 to September 2021. Similarly, there is a spike of 66% in the Omnichannel Commerce category and 128% in the E-commerce Personalization category respectively.

With increasing competition in the retail landscape, it’s time for retailers to address the need for the right software that fits the overall business strategy, and Instacart’s acquisition of Caper AI is a step in the right direction toward achieving this goal.

E-Commerce Platforms ➜

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