Individuals like to reach out to me off the record to ask for my opinion on strategy, robotics, and operations. In return, they provide me with information. For example, for nearly 2.5 years, I’ve had discussions with individuals from Walmart and dunnhumby about different projects taking place within their companies.
Through the discussions, I have inside knowledge about a retail insights service launched by Walmart in 2021 called Walmart Luminate. Luminate is a suite of data products that gives U.S. – based merchants and suppliers access to rich, aggregated, customer insights that enable smarter, faster decision-making. 345 Global should be part of the platform.
I am unveiling exclusively that Walmart negotiated rights to a perpetual license with dunnhumby, a leader in analyzing shopper data, and selling the insights to CPG companies, to power Luminate. Walmart has created their version of Kroger’s 84.51˚analytics company.
I’ve stated to Amazon and Instacart executives, that they should have created a platform similar to Luminate. Neither company chose to do so. Luminate is an Amazon and Instacart killer in my opinion.
According to Amazon sources, Walmart Connect is pulling CPG digital insight spend and add dollars away from Amazon. Amazon is far behind Walmart in grocery.
I’m a fan of Instacart but I think they’re in a world of hurt. Here’s why. Instacart is trying to run out the clock with the hope that they can launch an IPO. Industry analysts I’ve spoken with think investors won’t find anything remotely valuable in Instacart’s platform minimizing the chance of an IPO. I believe Instacart is worth between $4B to $6B but it’s only my opinion.
Instacart is doing everything they can to convince investors that their technology platform is leading-edge, and that Instacart can leverage the platform for continued growth. In my opinion, Instacart may struggle for several reasons:
1️⃣ Kroger, Albertsons, Publix Super Markets, and other Instacart customers, will not sit back and watch as Instacart takes CPG advertising dollars away from them. Instacart’s potential for growing their advertising business is low.
2️⃣ Fidji Simo, formerly of Meta, sees the value in shopper data, and it is her intention to sell digital insights captured by Instacart to CPG companies and Instacart’s customers. Here’s the problem – Instacart doesn’t have a platform anywhere near as capable as Walmart’s Luminate.
3️⃣ Walmart has plans to offer Luminate to independent and other grocery retailers. GoLocal can make deliveries.
Instead of being so focused on an IPO, Instacart should have built a better platform. Instacart should have fired their “tech bros” that lack grocery and CPG experience and instead partnered with dunnhumby. Instacart should have acquired Ocado Group or AutoStore™ to legitimately raise their valuation.
Target, DoorDash, or Uber should assess acquiring Instacart.
Walmart generates nearly 57% of their revenue from groceries. The company has invested heavily to become a leader in digital insights, analytics and advertising. Walmart will claim that they’re doing so because it makes sense for them to want to add value to their customers. Is it the real story?
Based on discussions with personnel from dunhumby, Walmart personnel from Walmart Data Ventures Group, Walmart Grocery, Walmart Stores e-commerce team members, and based on my own store visits and analysis, I have come to the following conclusions:
1. Walmart has every intention of converting 30% or more of their store business to e-commerce with a goal of significantly increasing at-store pickup. Walmart is adding a significant number of pickup spots at their stores.
2. In my opinion, Walmart is going to become a direct competitor to Instacart by offering independent and small to mid-size grocery retailers free use of Luminate and other Walmart tools to manage their online grocery ordering.
3. Walmart will deliver groceries leveraging GoLocal and other last mile delivery options also at lower costs than what Instacart, Shipt or DoorDash charge.
4. It’s plausible that Walmart will become a grocery wholesaler.
