Instacart Pens Strategic Partnership With Fabric

In what it calls the first phase of its next-generation fulfillment initiative to bring automated technology solutions to retailers across the U.S. and Canada, Instacart has signed a multiyear strategic deal with Fabric as a fulfillment automation partner.

The deal follows months of speculation over Instacart's pursuit of such technologies, and would suggest that in addition to a technology partner that at least some retailers are willing to come along.

The next-gen fulfillment initiative will pair Fabric software and robotics with Instacart technology and shoppers to power a new fulfillment process within dedicated warehouses and existing retailer locations. The new process will enable faster fulfillment of customers’ full grocery shop, from packaged goods, household essentials and produce to deli items, frozen food and alcohol, the San Francisco-based grocery platform said.

Once orders are packed, shoppers will deliver orders to customers’ doors or place them in staging areas for curbside pickup. Instacart plans to kick off early-stage concept pilots in partnership with Fabric and grocery retail partners over the coming year and beyond. 

Does the strategic partnership involve Instacart making a financial investment in Fabric, and is Instacart ultimately planning to acquire the software and robotics company? Instacart responded to WGB’s request for comment by saying it doesn’t publicly disclose the details of its partnership contracts. Instacart also declined to say in which markets and with which retailers the pilots would be launched first.

WGB was unable to confirm a report this spring suggesting the companies were working together with Publix on one such facility.

“Our next-gen fulfillment initiative combines our robust technology suite and dedicated community of shoppers with robotics solutions to give retailers even more innovative ways to compete and serve their customers online,” said Mark Schaaf, chief technology officer of Instacart, in a statement.

The strategic deal also aims to reduce the friction of the in-store experience for Instacart shoppers.

“Our next-gen fulfillment 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,” added Schaaf. “Over the long term, we believe partnering with retailers to bring next-gen fulfillment technologies together with the personal touch and care of Instacart’s shopper community will create an even more seamless online grocery experience that’s faster and more affordable for customers and delivers even more value and growth to retailers.”

Fabric was launched in Isreal and currently operates a handful of microfullment centers in the U.S. including one in partnership with FreshDirect. Officials say its technology represents a more efficient solution to in-store picking while reducing aisle congestion and a plague of out-of-stocks for retail stores.

“Everything about our microfulfillment solution has been built for speed, efficiency and elasticity to meet today’s on-demand requirements,” said Elram Goren, CEO and co-founder of Fabric, in a release “Our software-led robotics and modular solution gives grocery retailers the flexibility to build the fulfillment solution that best fits the needs of their business. With Instacart as a partner, we see an enormous opportunity to integrate our product and services into Instacart’s e-commerce solutions to provide a compelling service offering for grocers.”

However, Instacart doesn’t foresee the added efficiencies introduced with the Fabric deal as impacting its need for Instacart shoppers. The Instacart shopper community will continue to play an important role, picking and delivering orders for more than 600 retailers across nearly 55,000 North American stores, said the company, which has brought on more than 300,000 new shoppers since March of 2020. 

In the future, Instacart expects to have more shoppers, not less, even with automation and robotics to complement that fulfillment solution, said the company.  

Instacart’s next-gen fulfillment initiative adds robotics solutions to the company’s existing grocery e-commerce offerings. Those offerings include the Instacart marketplace, which features more than 600 national, regional and local retailers; Instacart Enterprise, the company’s white-label enterprise-grade technology solution; and Instacart Ads, which connects thousands of CPG brands directly to customers online.