SAME DAY DELIVERYStrategic Bets, Emerging Solutions, Path

Forward

What is Last mile?

Retailer DC

Manufacturer DC

Retailer Store

Converted / Dark Store

Home or Office

Lockers

Store for Pickup

Movement of goods from the last inventory point to the point of consumer chosen access

U.S. last mile delivery is $27B and growing

Last Mile Rapidly Growing

•2% of online orders

•$0.6B market

•Significant CAGR in urban

2014 2015 2016 2017 2018

US Same Day Forecast in 20 Cities

Same Day Emerging

$27B market

10% CAGR

Same day seen as a strategic “bet” today

Argument For …

Argument Against …

60% of Millennials expect Same Day

52% consumers willing to pay for Same Day

Supply side innovation show consumers what is possible (Amazon effect)

Modest 9% of shoppers said Same Day will lead them to buy more online

Will not scale beyond dense urban centers

Majority of consumers still want low delivery cost over speed

Role of Same Day in omnichannel?

Are consumers ready? Which segments and occasions?

How does Same Day delivery fit within the retailer’s broader omnichannelstrategy?

How important is Same Day delivery in driving omnichannel growth and retailer differentiation?

Several Same Day models emerging

Retailer Managed

3PL Managed(Owned)

3PL Managed (Crowdsource)

Marketplace (Crowdsource)

Marketplace (Outsourced)

Each type has its own structural pros and cons in terms of…

Cost Adoption Scale Flexibility Control Innovation

Source: A.T. Kearney

Emerging solutions

Which geographic and category segments are you in today? Where do you plan to be in 3 years?

Please describe your Same Day offering? How is it different than other solutions?

What aspect of your solution do customers love today? How does your platform enable innovation beyond speed?

Provider View

Google and Instacart are marketplace based … what are the demand and supply side drivers for scaling in a region?

Privileged & ConfidentialGoogle Express

The Stores you Love

Delivered Fast

Google Express

48 Merchants

Platform for merchants

Google Express

Same Day + Overnight Delivery

overnight

Google Express

11

Infrastructure Free Grocery e-Commerce

Consumers Grocery StoresRetailer Marketplace

Double Digit M-o-M

Growth

1 Hour/Same-day

Delivery & Pick-up

18 Major

US Metros and Growing

100+ Retailer Partners $275MM+ in Funding

12

18 Markets and Growing

Seattle

San Francisco

Bay Area

Los Angeles

Chicago

Austin

BostonNew York

Philadelphia

Washington, D.C.

Current City

www.instacart.com/locations

Denver

Atlanta

San Jose

Portland

Houston

Boulder

Miami

Indianapolis

Minneapolis

13

Industry defining offering driving a differentiated customer

experience

Rich, digital customer

experience

Instacart receives high praise from its customers for its clean, easy-to-use interfaces that instantly sync across

customers’ devices

Ability to engage with

customers

Visual and UPC/PLU based confirmation of desired items

Active Substitution Management

Engage proactively while in the store –text, email, phone

Monitor performance and make it right – no matter what! 24 hour customer service

Sophisticated fulfillment algorithms to ensure

timeliness, flexibility and efficiency

Intelligent in-store technologies to ensure

efficient picking/packing/ check-out

Cutting edge technology enabling

unmatched service

Adoption considerations

What are you looking for in a scalable solution? What do you need to see in terms of (performance, referencing, strategic

considerations)?

Are you piloting Same Day solutions today? What are the trigger points for scaling a Same Day program?

What are the broader omni-channel supply chain enablers and challenges in driving Same Day?

Retailer View

Path forward

Tell the audience something we don’t know about Same Day

How and what technology will materially enable Same Day delivery in the next 3-5 years?

Where will Same Day be 3-5 years from now?

Thank you – please continue the dialog!

Michael Hu – Principal, A.T. Kearney | michael.hu@atkearney.com

Marie Robinson – COO Michael Kors | marie.robinson@michaelkors.com

Raj Kumar – Partner, A.T. Kearney | raj.kumar@atkearney.com

Brian Elliott – GM Google Shopping | brianelliott@google.com

Vishwa Chandra – VP Retail Accounts, Instacart | vishwa@instacart.com

Dwight Herlong – VP Supply Chain iCracked Inc. | dwightherlong@yahoo.com