The Amazon Effect   //   July 2, 2021

Why Amazon is investing in unplanned grocery purchases with Anycart

An Amazon-backed grocery startup hints at a new strategy to steer customers toward bigger online purchases.

In 2019, Amazon invested in a company called Anycart through its Alexa Accelerator program — and after a year in beta, Anycart formally launched this spring. Anycart is a kind of for online grocery that aggregates goods from a number of different online stores, including Amazon, Whole Foods, Vons, Safeway Albertsons and Stop & Shop and Giant. Anycart is a marginal player for now, but it is exploring a new method for how to inspire people to make more impulse purchases online: build a platform for shoppable recipes. Retailers and food brands have yet to figure out how to steer people toward impulse purchases they might have previously made in store, and Anycart presents one potential solution for this.

The Amazon investment — paired with the partnerships from incumbents like Albertsons and Ahold Delhaize — hints at how, even as online grocery gains steam, grocers of all types are still exploring ways to get people to increase the size of their online shopping carts. And to do it, they are hoping to jumpstart a company that, unlike Instacart, doesn’t retain customer data — Anycart passes off orders to retailers, which means that each store keeps the information about the people they are serving.

Online grocery’s impulse purchase problem

Though online grocers do push shoppers toward add-on items or similar items before checkout, in one recent study from the analytics company IRI, 51% of consumers said they make fewer impulse purchases when shopping online. Online marketplaces are helpful for finding products that customers already know they need, but they’re less equipped for inspiring big basket sizes.

Laura Kennedy, a senior lead analyst at CB Insights, said that customers who buy online tend to know what ingredients they are planning to order in advance of their search — and as a grocery retailer, “it’s not good for you if the consumer always knows exactly what they want to get in their basket and they don’t add extra,” she said.

She said that Amazon, for example, is not well curated enough to inspiring customers to buy an assortment of items they didn’t expect to need. “Amazon’s own issue is that it’s always good for spearfishing, which is, you [as a shopper] know what you want” and can easily add those items to cart and order it, said Kennedy. The problem for Amazon, she said, is “it doesn’t inspire basket-building.”

A new approach

Anycart’s strategy is oriented around recipes. Its site is populated with over 1,000 recipes broken out by categories (“Quick & easy” breakfast, for instance) and themed trips or events, prompting shoppers to “Plan a barbecue” or “Pack a picnic.” Alongside each recipe is the total cost of ingredients, plus an option to add all of them to cart in one click. Sidney Chang, the chief business officer at Anycart, told Modern Retail that the company relies on in-house chefs to come up with recipes from scratch and upload them to Anycart. “We’re able to crank them out pretty quickly,” he said.

This focus on recipes aims to increase basket size. Chang said that the average order value for Anycart customers is 49% more than when those same shoppers buy online from other grocers.

The idea that shoppable recipes could facilitate more purchases online has quietly gained popularity with other retailers. Walmart has continually added cooking videos to its platform over the last year, relying on celebrity hosts to demo a recipe, then asking customers to add all of the ingredients to their carts before the video finishes. General Mills, meanwhile, has been creating cooking videos for other grocery platforms that includes ingredients from across General Mills product categories — the idea being that it could drive customers to purchase General Mills products they weren’t already planning to buy.

Outside of recipes, Chang also pointed to the site’s “personal aisle” feature — where a dropdown displays a list of recommend groceries based on a user’s browsing history — before they even type into the search tool as helping to inspire more orders.

As online grocery has gained ground over the last ten years, brands — especially candy companies — have experimented heavily with ways to get customers to spend more. Albertsons itself has several digital shelfs on its homepage, including a collection of featured items and “Bestsellers In Your Area.” Hershey’s — which makes a significant share of its revenue from impulse purchases — in 2017 partnered with the online grocer Peapod so that, when customers order groceries for pick-up at in-store lockers, Hershey’s products can be purchased at those lockers. The candymaker Mars, meanwhile, struck a deal with Alibaba so that its products would pop up at checkout if customers were close — but not all the way — to the free shipping minimum. Buoying the logic of these approaches, a pre-pandemic study found that 28% of impulse purchases online happened when customers “needed additional things for free shipping.”

One lingering question is why a well-resourced company like Amazon would back a third-party grocery aggregator instead of building out functionality on their own sites that would inspire more impulse purchases. Kennedy hypothesized that they might get access to some insights about how effective recipe-based browsing and other strategies to increase basket sizes online are. Chang said that part of Anycart’s appeal is that, because it doesn’t do fulfillment and merely refers purchases out to its retail partners, retailers retain all of the customer data. That’s in contrast to the other major grocery marketplaces, like Instacart, which share very little information about each customer with retailers. 

“If you look at e-commerce in general, I think it’s hard for one person or one company to be everything to everybody,” he said, noting that even the major grocers accept that customers will order groceries from third-party apps. The difference, he said, is that “we see ourselves as a friend to these retailers.”