InstaBuggy delivery service launches in Toronto

It just got even faster for consumers to have groceries delivered in downtown Toronto.

A startup called InstaBuggy launched its grocery delivery service on Monday. Now in pilot stage, the service says it will get groceries to customers’ homes or offices in one hour.

To order groceries, users visit InstaBuggy’s website or use its app, put in their postal code and choose which store they’d like their groceries from. Users can pick from a selection of stores in their area. InstaBuggy’s online portal contains more than 10,000 SKUs to shop. Once an order is made, groceries are delivered in an hour.

Co-founder Julian Gleizer told Canadian Grocer that InstaBuggy has its own “pickers and packers" stationed in each of its "partner" stores. When an order comes through it instantly goes to the pickers. Since these pickers will be assigned to specific stores, they'll become well acquainted with them and be able to gather groceries faster, he said.

This differs from other companies' delivery models in which pickers visit multiple stores to fulfil orders, Gleizer said. “Our orders come directly to the pickers and packers so it saves a lot of time and is more efficient.”

Among the stores that InstaBuggy is working with is the FreshCo in the Leslieville neighbourhood of east Toronto. During the company's pilot, two pickers will work out of that store. Gleizer declined to name which other grocery banners InstaBuggy has deals with, but said they are a mix of “top-tier names” and specialty stores.

The magic question is: how will InstaBuggy make deliveries in an hour in Toronto, a city known for its maddening traffic congestion?

The company, explained Gleizer, will use a two-pronged approach to get groceries to customers fast. One is an “internal delivery system” in which InstaBuggy’s own vehicles and drivers deliver groceries. In addition, it will also deploy “a crowdsourcing model like Instacart uses,” said Gleizer, referring to the increasingly popular U.S. online grocery service.

Using both its own drivers and crowdsourcing will ensure one-hour delivery and give InstaBuggy a unique advantage in the grocery delivery space, Gleizer said. “We’re doing something that’s very disruptive in the grocery industry.”

Gleizer added that InstaBuggy is also working on a plan to use “emission-free vehicles” to make deliveries.

InstaBuggy will charge customers a $9.99 fee for orders from $10 to $39.99; a $5.99 fee for orders $40 to $59.99; and delivery will be free for orders $60 or more.

Delivery fees will make up the bulk of InstaBuggy’s revenues; it will also earn income from price markups on products.

“People are willing to pay a little bit for the convenience ,” Gleizer said. This is especially true for downtown residents who don’t own a car. Spending an hour-and-a-half grocery shopping can be tiring for someone with small kids in tow, he added. “You’ll pay 50 bucks just to get out of there,” said Gleizer, laughing.

He said that InstaBuggy plans to expand outside of downtown Toronto. “We’ll be scaling out to cover the major population of the , and then going across in terms of Vancouver, Calgary, Montreal and Edmonton,” he said.

In the works for roughly a year, InstaBuggy was founded by Gleizer, who has a marketing, sales and e-commerce background, and Zack Kaplanov, who has food industry experience. The company’s advisory board includes grocery and financial industry professionals including former KPMG equity partner Shubo Rakhit and former Loblaw produce and fresh foods executive Bill Binder.

Instabuggy is joining a growing crowd of grocery delivery services. Among its competitors: Urbery, which began testing its grocery delivery service in Toronto earlier this year, and Longo's longstanding Grocery Gateway service.

In addition, Loblaw now runs a click-and-collect service in some of its Toronto-area stores whereby customers can order online, then pick up at a Loblaws. The service started last fall.