Where Does Instacart Fit in My Company’s P&L? - Episode 175
INTERVIEW WITH STEFAN JORDEV
DESCRIPTION
Last week Stefan Jordev, my colleague from Bobsled Marketing and co-author of the book Instacart for CMOs, and I talked about advertising on Instacart and what type of ad campaigns are available on Instacart, how to choose the most important for your brand and we shared some tips for advertising.
Where does Instacart fit in my company’s P&L? is the second topic in the series we would like to cover before our book Instacart for CMOs is available for readers.
In our book Instacart for CMOS, we dig into performance, advertising, demand generation, leaders, available brands on Instacart, and many other topics. P&L (Profit and Loss) responsibility is one of the most important responsibilities of any executive position. Having P&L responsibility involves monitoring the net income after expenses for a department or entire organization, with direct influence on how company resources are allocated. Instacart is a pretty awkward place in a brand’s P&L. This is the issue we discovered and discussed in our book. Stefan interviewed dozens of e-commerce digital leaders from different brands to understand how these companies are organizing themselves, where does the marketing aspects of Instacart fit on the team and how do they think about P&L.
Make sure to tune in to find out more!
“Digital is a skill, not a single person’s job. The digital or ecommerce team needs to take the time to educate the sales team on ecommerce fundamentals like product availability, content, ratings, reviews, and search.”
KEY TAKEAWAYS
Sales on Instacart show up on a brand manufacturer’s account. The spent between merchandising and advertising is allocated to the e-commerce team, the digital team and that creates a bit of confusion because the sales from Instacart can’t really be lined up against the e-commerce spent and these efforts might be allocated to different teams.
There are two main places for Instacart to sit in an organization, there is sales team and marketing team.
The model where marketing department owns the Instacart relationship comes with a lot of benefits and the most obvious one is that e-commerce usually reports to marketing and when it comes to ownership if the e-commerce team or anybody around the performance marketing pulls this relationship, they can easily transfer knowledge in data from other e-commerce platforms they advertise on.
One additional very big disadvantage is that the e-commerce team doesn’t have to sync dept of relationship with retailer partners as oposed to the sales team. Even when it comes to negotiating about inventory levels, which products are in stock, or even when it comes to just measuring performance.
Sales team manages the retailer partnerships and so much of the product experience on Instacart falls on the shoulders of the retailers. This puts brands in a tricky situation and if retailer partners are not so engaged with Instacart or it’s not really a priority for them brands really suffer from a lack of control over the product experience. In this situation, it is really helpful if the sales team involve because they can leverage that relationship with the retailer.
The marketing team might prioritize new product launches with ROI might be poor and the sales team might do the opposite and focus on high ROIs sortment.
It is highly important that each of these departments work and coordinate really closely with each other and they have to know what is the other team doing.
Having an Omni-channels approach allows strategies that have both physical and digital elements to customers and this is how Instacart revolutionized the way we think about the digital and physical advertising channels.
E-commerce is both, marketing and sales activity and they will always need to exchange experience and keep each other up to date about what the other department is up to.
Instacart operates differently compared to other marketplaces. There is 4 side marketplace with Instacart: shopper, in-store shopper, end customer, and retailer and the brand.
MENTIONED IN THIS EPISODE
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