🧠 Food for thought

Implications, context, and why it matters.

Average order value (AOV) drops as consumers shift to smaller, frequent purchases

• Instacart saw AOV fall 4%, which tracks with more convenience top-up trips over big weekly hauls. That pattern tends to cut margin per order and raise delivery cost against revenue.
• Retail media (ads on retailer-owned apps and sites) can gain from this shift. More small baskets create more sessions, which adds impression chances and can balance margin pressure through ad inventory.
• Orders grew 14% while AOV fell. That mix implies more habitual users who convert better on sponsored product placements than one-time bulk shoppers.

Enterprise partnerships create untapped retail media inventory for media agencies and advertising technology (adtech) players

• New enterprise partnerships widen Instacart’s retail media reach beyond its app. Instacart Ads daily spend rose 12% quarter-over-quarter (QoQ) in Q4 2024 per Pacvue benchmarks 1, and Pacvue is an ecommerce ad analytics firm.
• Media agencies alongside measurement providers (firms that quantify marketing performance) can win budget with planning tools that compare Instacart cost per thousand impressions (CPM) plus return on ad spend (ROAS) with Amazon or Walmart. Brands such as BUILT (a consumer packaged goods brand) posted triple-digit growth using Instacart Ads to reach new-to-brand consumers 2.
• 83.4 million quarterly orders add impression inventory. Adtech vendors can stand out with attribution models (methods that tie ads to purchase outcomes) that link Instacart display ads to incremental household penetration (i.e., additional households that would not have purchased otherwise) and tackle the 74% cart abandonment rate 1 with retargeting.