Instacart signs cost-cutting deal to use warehouse robots

Instacart is joining e-commerce technology start-up Fabric to equip fulfilment centres with robots in an effort to speed up delivery and cut costs as it prepares for an initial public offering.

The company is planning to build new standalone warehouses as well as fulfilment centres for supermarket partners, Instacart said on Thursday. The multi-year deal is the first step in what the grocery delivery service calls a “next-gen” fulfilment process that will use Fabric’s robotic technology to pick items, while gig workers deliver food to customers’ doorsteps.

“Our next-gen fulfilment work will also help reduce some of the things that make in-store shopping cumbersome for Instacart shoppers, like crowded store aisles, out of stock items and long checkout lines,” chief technology officer Mark Schaaf said.

Bloomberg reported in June that Instacart was planning to build automated fulfilment centres but had fallen behind schedule. The company plans to start pilot schemes with supermarket partners in the coming year.

San Francisco-based Instacart announced the partnership as it looks to revamp its labour-intensive model, which currently depends on 500,000 gig workers. The pandemic catapulted Instacart from a start-up to a delivery behemoth as consumers looking to avoid shops rushed online.

After Walmart, the company is now the second-largest grocery delivery and pickup company in the US, with 45 per cent of the market as of June, Bloomberg Second Measure data shows. Instacart doubled its valuation to $39 billion in a funding round in March when it raised $265 million from investors.