The Cost to Build an On-demand Grocery Delivery App like Instacart

We have seen a mixed impact of Internet-based businesses in the past. Some ideas disrupted the global markets, while many were ahead of their time, as the consumers were not really ready for them. One such underrated idea was online grocery shopping, which until now was not as popular as regular shopping websites like Amazon, eBay, BestBuy, and others. The trends for online grocery shopping were visible merely in metropolitan cities. However today, the trends have shifted to another level, and there is a big reason for it.

Why is the Online Grocery Store a perfect business idea today?

There has been a shift in the home delivery needs amidst the COVID-19 pandemic. Lockdown and an imperative need for social distancing have made it clear that consumers are avoiding going out and looking for ways to get every possible aspect of their shopping needs delivered right to their doors. 

From the past 2-3 months, a countable number of grocery shopping apps that existed in the market beforehand look busy now. It’s hard to find a delivery slot, even for the next 3-4 days; forget about same-day delivery on Instacart or 2-hours delivery on Prime Now. There is a massive spike in the demands here. About 49% of the US grocery consumers say that they are buying more groceries online after the COVID-19 pandemic.

Source: Supermarketnews.com

Besides, a report on CNBC by a consulting firm, Bain & Company, suggests the following-

• Before COVID-19, overall expense on online grocery shopping in the US was only about 3% – 4%. However now, the numbers have rushed to 10% -15% in a short period.  
• The surge in the demand will stay so as the consumers who have downloaded the apps have now tasted this new habit and discovered the convenience of online grocery shopping.
• The shift in the demand for online groceries and challenges to remain in the business during these tough times is inspiring traditional grocers to rethink their approaches, too.

As the old saying goes – where there is demand, there will be an eventual supply, led by a wise businessperson. Online grocery shopping is the need of the hour, and at this point, the pandemic has opened a market for grocery shopping apps in the global context. A trend that was not going anywhere up, a few months ago, is now one of the biggest on the globe. 

So, if you have been following the market for the past few months and wondering how to set up a grocery store online, this article will give you a base, to begin with. Instacart is one of the biggest players in the online grocery shopping market and an inspiration for many entrepreneurs who are looking to drive the benefits to their sides. This article will give you a detailed overview of how Instacart works and how much it takes to build a similar app like Instacart.

What is Instacart and how does it work?

Instacart is an online grocery shopping app. As the name suggests, it lets customers place grocery orders online and get them delivered to their doorstep. The service itself is not new, as traditional hypermarkets and grocery retailers have been offering home deliveries in the past to attract consumers. However, the service is more organized, more connected, full of options due to the introduction of app-based mediums like Instacart.

You no longer need to call the grocery stores and struggle for an hour to ensure they have everything you need. Simply, open the app, check the catalog, add the products to cart, checkout virtually, and they will deliver your order to your doorstep.

However, there could be a lot of alteration between how different grocery delivery platforms work and how they fulfill a consumer’s orders. This is how Instacart works in the background-

1. Consumers place their orders via the Instacart app and make the payments
2. The app transfers the order details (product list and delivery address) to a Shopper. 
   • A Shopper is an Instacart employee who shops on a consumer’s behalf and delivers the order at his/her doorstep.  
   • Shoppers who are in the vicinity receive a notification when a customer places an order
   • Shopper accepts the order, purchases the listed products, and delivers it 

Concisely, an app-like Instacart combines all these steps on a single ecosystem. The app acts like a communication medium that connects different businesses and persons associated with fulfilling the grocery shopping needs. The whole purpose of such an app is to make the experience as smooth as possible.

Some points to note:

• Instacart is merely a shopping or delivery app, Instacart does not sell groceries 
• Instacart merely connects different nodes of the whole supply chain on its app
• Stores like Costco partner with Instacart to offer grocery delivery services   
• Instacart now allows customers to choose if they want to shop from specific stores
• However, when it began, Instacart used to hide the store details from the customers
• Customers could just list the products they want, and Shoppers would shop for those

Most Important Features for an app like Instacart

Since the grocery delivery model is not new or innovative in itself, you need to offer some major attractions via innovative features to make the best use of it. Before, diving into development, or calculating the cost of development, make sure you have a list of all the innovative features you need. 

An Instacart-like platform will have at least the following solutions in its suite, communicating with each other in the real-time:

• Customers- Android-iOS mobile apps
• Shoppers/Delivery Person- Android-iOS mobile apps
• Admin Panel – A web-based interface

Features for Customers app

• Sign-up
• Sign-in 
• User profile 
• List of stores
• Store filters
• Product catalog
• Product filters
• Virtual shopping cart
• Payment gateways
• Order Status tracking
• Order history tracking
• Return/Refund Management
• Real-time location-tracking
• Push and email notifications  
• Consumer support panel

Features for Delivery app

• Sign-up
• Sign-in
• User profile
• Order details
• Order notifications
• Location-wise order allocation
• Geo-navigation via map integration
• Delivery history tracking
• Shoppers’ earnings tracking 
• Push and email notifications  
• Shoppers support panel

Features for Admin Panel

• Customer database
• Shopper database
• Store management
• Catalog management
• Order status tracking
• Revenue analytics
• Refund management
• Payments management
• Customer support panel
• Shoppers support panel
• Store-affiliation management
• Revenue channels management
• Coupons and discount management
• Ratings and Review Management

Besides these necessary features, you will need tons of APIs to manage your platform for example-

• WebSocket API in your back-end
• Payments gateway APIs
• SMS notifications API
• Push notifications APIs 
• Chatbot or Live chat API
• Social Media APIs

How much does it cost to build an app like Instacart?

Now that we know all the most important features and the number of solutions that we need to create the entire ecosystem, let’s find a cost-estimation of building these from scratch. Be advised that the cost will differ from place to place and from time to time. Besides, it will increase or decrease based on other factors such as the number of resources, the complexity of the tech-stack, outsourcing firm, cost of APIs, etc.

Let’s assume the following scenarios:

• You are outsourcing your entire project to a software development firm
• The plan is to build different Android and iOS apps for customers and Shoppers
• You want to build, test, and deploy the app under 6-months

The minimum numbers of resources that you need for such a project are-

• Project Manager -1
• Android developers- 1-2
• iOS developers – 1-2
• UI/ UX developers – 1-2
• Quality Analysts – 2
• Back-end developers -1

With the above resources, we can calculate the time-frames for major development stages as following:

Taking the average development charges as low as $35/hour, the average cost to build an app suite like Instacart will start from $75,000. However, the cost will go up based on the above-explained factors. 

Is there a more cost-effective way?

Developing anything from scratch demands a lot of research and time. As the time frame increases, the cost of development increases with it, too. The best way to minimize this cost is by using a ready-made solution. There is Instacart clone script in the market with ready-made features and solutions. If you use an Instacart clone script, you will get most of the features out of the box and you can avoid paying for development from scratch. 

You can find a decent Instacart clone for as low as $1.5k -$3k. Besides, you can pay a little more and ask the developers to personalize the script as per your unique brand identity. Most of these scripts come with open source-code access, so customization would not be an issue. It’s your decision, as its 75K Vs 3-5K.

Think and research more before you act on it. Good luck to you!