In this exercise, we will apply some concepts and models from OM to study the business process Instacart, an online grocery delivery and pick$-$up service that operates in Canada and the United States.

The business model of online retailing goes back to $1982[1],$ and the world witnessed its rapid growth in the late $1990$s and the $2000$s$.$ The grocery industry, which is the largest single sector of retailing, also had its bid to go online in the early of e$-$commerce. Two early pioneers were HomeGrocer.com and WebVan. The former was acquired by the latter in $2000.$ The latter, however, went bankrupt in the same year. In retrospect, the executive teams of the two companies admitted that their demise was due to expanding too fast and overinvestment on infrastructure $($distribution centres, transportation fleets, etc.$).$ Indeed, the grocery industry is known to have low margins despite its large sales volume.

In the $2010$s$,$ grocery delivery was revitalized, thanks to the rise of the sharing economy business model. Founded in $2012$ by Apoorva Mehta, Instacart is the major grocery delivery service using this business model. By collaborating with local grocery stores and personal shoppers $$ people who are willing to shop and deliver grocery for others as a gig or part$-$time job, the company was able to avoid overinvesting on infrastructure, which is a major cause that led to the failed early ventures.

Two different types of personal shippers run Instacart$$s daily operations of shopping and delivering grocery:

Full$-$service shoppers usually shop the items on a customer order from the store and then deliver to the customer$$s location in their personal cars. Those shoppers are not assigned to a specific grocery store. Rather, they may visit different stores to shop and deliver.

An in$-$store shopper, however, is stationed at a specific store. $($See figure $1$ for a demonstration of the positioning of the two types of shoppers$).$ In$-$store shoppers checkout the items ordered by Instacart customers and place them in a staging area, where customers may pick up the items at their booked time slots. It is also possible that a customer order is fulfilled by both an in$-$store shopper and a full$-$service shopper. This happens when the order is checked out by an in$-$store shopper, and then the platform assigns a full$-$service shopper to pick up the ordered items and deliver them to the customer.