Engagement & Retention project | Swiggy Instamart

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Engagement & Retention project | Swiggy Instamart

Swiggy is an on-demand platform. It started off through it's online food delivery, it also has Instamart vertical for its online grocery deliveries, Dineout vertical for booking tables at restaurants, and Genie for delivering items from one place to another.For the Engagement & Retention Project, I have chosen Swiggy's Instamart vertical.

Core Value Proposition

To redefine the way a user orders groceries- "Swiggy redefined the way you order food. Now, we are redefining the way you order groceries." You can order your groceries from the convenience of your home, from 7 am to 1 am every day and it will be delivered within 10 to 45 mins.

Core Value: Groceries and household items are delivered at your home or at any location you of your convenience within 10-45 mins. It does so by the following-

an inventory of commonly used grocery and household items in a city/region in relevant dark sites,
A fleet of delivery partners that also delivery Swiggy's food orders
Attractive discounts and coupons on the app.

User Experience:

Good look and feel, easy to use UI on the app and easy to navigate to Instamart section.
Instamart is updated with latest offers and attractive discounts
items are easily segmented such as Wholesale prices, snacks and sweets, cooking essentials, etc.
Most commonly bought items are highlighted.
Users order on the app, pays with their payment option , to a selected location of their choice
Receives fresh vegetables, fruits, meat, dairy and other household items within the promised time.

Frequency:

User	Natural Frequency	Reasoning
Casual User	5-6 times in a month.	Buys most of the grocery shopping through walk in stores and only orders online if there is an immediate need- such as important ingredient missing or guests are over.
Core User	8-10 times a month	Likes to buy some groceries in person like bread or veggies but opts for convenience for standard items
Power User	3-4 times a week	Uses Instamart as the primary source of buying and topping up grocery/household inventory at home

What is the ideal Engagement Framework for Instamart?

For Instamart frequency is the core, this means-

No of orders per week- the more orders per week, the more its impact on the revenue and more engagement that a customer has with the app.
Average Order Value- the average value per order multipled with the frequency of users has the most impact on Annual Revenue,
No of types of items bought- the more different varieties of items bought, such as fresh fruits, meats, bakery items, household cleaning and supplies, the higher the retention. This has an impact on the revenue and ensuring the customer remains a core customer.

Who is your Active User?

These are the actions that make an active user for Instamart

An user buying groceries on Instamart - may or may not be a Swiggy One customer or use other verticals of Swiggy
The frequency is atleast 2 times a month on a recurring basis.

Instamart's Business Goal:

Instamart's primary business goal is growth and profitability. The North Star Metric would be Total number of new users, frequency of orders and order size (average order price)

Important Metrics for Instamart

Metric	Relevance	Real-Time Example
Annual Recurring Revenue (ARR)	Provides a macro view of Instamart's business revenue	Total no of orders in a year * Price per order + Swiggy One Membership purchased in a year
Monthly Recurring Revenue (MRR)	Offers a micro view of Instamart's business revenue	Total no of orders in a month* Avg price per order + + Swiggy One Membership purchased in a month
No of active users	No of uses regularly using Instamart	This is important to track user base, and has a direct correlation to total no of orders and frequency of orders
No of new users	No of new users signing up or using instamart services for the first time	This is a direct correlation to Swiggy's growth and profitability
Frequency of Order	No of orders per user per month	This tells us the user segment and helps Instamart define its engagement and retention campaigns
Average order value	This is a good indicator of the revenue that can be generated from a user in a month	A good trend would be to see if over a period of time the order value is going up or down as this impacts ARR
Order range and variety	The variety of items being ordered on Instamart	If a user orders different type of items, it's easy to retain them as power users.

Detailed Segmentation for Active Users:

For Swiggy Instamart I am going for the segmentation of Power/Core/Casual User

User/ICP Type	Casual	Core	Power
ICPs	ICP 1- Older Generation	ICP 2- Senior Professionals	ICP 3- Young- Mid Senior Professionals
Usage Characteristics for Instamart	Occasional user on Instamart	Frequent user on Instamart	Daily user of Instamart
Usage Characteristics for Swiggy	Primarily uses for occasional food delivery and dineout options	Uses Swiggy primarily for food delivery and Instamart	Very high usage frequency of the app in total with exposure on all the verticals
Gender	Male/Female	Male/Female	Male/Female
Age	50+ years	40-50 years	25-40 years
Current City	Tier 2, Tier 3	Tier 1 & 2	Tier 1 & 2
Native City	Tier 2, Tier 3	Tier 2 & 3	Tier 1 & 2
Occupation	Self employed/Retired	Mid Senior professionals	Actively working
Source of Money	Self	Self	self and parents
Lives with	Spouse, teenage kids	Spouse and young kids	Self/with spouse /or with parents
Used Social Media	FB, Whatsapp, youtube, Amazon, Streaming online content- Hotstar, Sony Liv etc	Instagram, LinkedIn, Whatsapp, Netflix, Amazon, Quora etc	Snapchat, Instagram, Youtube, Facebook, Telegram, Medium, Quora
Recency of use case	Low	High	Very High
Natural Frequency	Low (Less than 6 orders per month)	Medium-High (8-10 orders a month)	High- Very High (3-4 orders per week)
Monetary/AOV/Revenue Generated	Low (<INR 200 per order)	Medium (Average value > INR 200 and <400)	High (Average value >INR 400)
Pain Points	Low	Medium	High
What pain point is Instamart solving	They don't depend on Instamart a low- so pain point is low	Instamart can solve their time crunch in delivering items in a timely manner	Pain points are high as they look at Instamart as a one stop solution for all their needs
Valued Features	On demand delivery	Bouquet of products, timely delivery	Solution to all of my grocery needs
Core Value Proposition (CVP) being utilized	Yes to a limited extent	Yes	Yes
JTBD of the persona	Fulfill grocery needs in a emergency situation on a contingent basis	Using Instamart atleast for 40% of their monthly grocery needs	Uses instamart for >80% of their grocery needs
Discovery	Low	High	High
What do they order? ( Instamart/Other delivery apps )	Emergency cooking items Cold drinks and sweets Bakery items Fruits	Regular household staples Daily veggies, fruits Meat and Dairy items Occasional non essential item such as eaarphones , grooming products	All household and grocery needs
Level of Engagement	Low	High	Very High
What alternatives do they have	Zepto	Blinkit Primary Zepto Secondary	NA
Reasons to leave Instamart	Late delivery/delay in delivery	Delay in delivery time Out of stock items	Bad customer service and experience

Engagement Framework	Relevance	Key Metric to be tracked	Rationale
Breadth	Tertiary	Which segmentation of products do they engage with	Engagement with wide variety of products makes a user a core or a power category user
Depth	Secondary	No of users landing on the app, adding items to cart, no of new users daily + no of existing users	Second most important metric as directly affects ARR when multiplied into frequency
Frequency	Primary	No of orders a user makes in a month- frequency of using Instamart to order	Most important metric.More the number of orders per user, higher CLV

Validation of the segmentation:

The validation of segmentation was done through interviews (phone and text based and desktop reviews).

Goal: Getting users to order a greater number of times of Swiggy, increased frequency and increased average value per order.
Success metric: Monthly Active Users, Order frequency and average order value per user.
Problem statement: Users need to get used to buying groceries online from Swiggy, they need to have that trust with Swiggy
Current alternative: Zepto, Blinkit
Solution - Do more with Instamart's Tier System Membership system free with Swiggy One Membership
User Flow- Open app → View personalized home page →Apply for a discounted Swiggy one Membership-> Enjoy a tiered system of benefits for all verticals including Instamart

Name- Instamart Membership Level

Strategy	Instamart Gold/SIlver/Platinum member
Goal	Engagement with the app, incentivize loyalty
Focused User Segmentation	Core/Casual/Power Users
Pitch	Enjoy a tiered system of benefits - as your your tier and badge
Offer	Upto 5% off for Silver level of users Upto 10% off for Gold Level of users Attractive discounts and coupons for Platinum Level of Users
Applicability	Casual Users would be Silver level Core Users would be Gold level Power Users would be platinum level
Channel to Promote	Social Media, Streaming Content Services, Youtube, In app notifications
Frequency & Timing	In app push notifications biweekly- you are at this level- only x more orders to move to the next level! When app is open with level highlighted When an order is placed - you have now only x more orders to move to next level
Metrics to track	Opt in for this tiered system increase in frequency of orders engagement with the app Progression with Badge levels
Milestones	15% of users opted in to the tiered ranking moving to from Silver to Platinum levels in a 1 month period
Why it will work	Gamefied experience, progression for better benifits
Proposed flow	Opted in Users start at Silver -> place more than 6 orders in a month-> move to Gold -> Place more than 10 orders in a month -> move to Platinum

Note:
The Tiered Membership Strategy has been crafted keeping in mind all user groups and segmentation.
This strategy is only for assignment purposes and has been made with insights from user calls.

The main aim of this strategy is to encourage - engagement and order frequency on the Instamart vertical- users are rewarded for their purchase behavior, more frequency of orders, they move on the next tier of membership, with attractive discounts at each tier. This encourages loyalty and incentivizes users to use the app more for all their grocery and household item requirements. In a way this tiered system- helps in converting the casual user to core and core to power users.

Please find 5 engagement Campaigns as below- please scroll to the right to view all of the details

Engagement Campaign	Hypothesis	Channel of Distribution	Persona/Type of User	Theme	Target feature	Pitch and Content	Goal of the campaign	Details	Offer	Frequency and Timing	Success Metrics	Milestones for the campaign
Campaign 1	Offering a curated cooking experience on Swiggy will draw in Casual users and keep the Core users engaged	Digital Campaign through the App, and Social Media	Casual and Core User	Cook curated meals with Instamart	Grocery segment of the app	Today's special - Green Thai Curry- all ingredients available delivered within 10 mins to your home!	Converting casual to core users, and to move core to power users	Encouraging users to cook home cooked meals - by delivering all items required via a speedy delivery.	Highlighting availability of gourmet ingredients as well as regular ingredients available on the app	Once a week the meal of the week will run, allowing a user time to anticipate and want to buy the handy ingredients on iinstamart	Click through rate, no of orders for the package., frequency of increase in orders for casual and core users.	15% Percentage of casual users moving to Core Users in 6 months
Campaign 2	Showcasing popular brands on Swiggy Instamart will convert Core users into loyalists	Social Media campaign, In app notofications	Core Users	How popular brands choose Instamart- building trust	Brand highlighting section on the app	Brand Lifebuoy trusts that Instamart will help in keeping you and your family safe faster!	Converting Core and Power users to loyalists	Top named brands such as Lifebuoy, Dettol, ITC showcasing their band on Instamart- building trust and connection.	Highlighting trust and reliability of the app.	Bi weekly - on Social media and the app	No of purchases for brand showcased on Swiggy Instamart	Increased purchases by 10% of brand when compared Month on Month
Campaign 3	Swiggy One deal for Core Users , will help in converting them to power users	Through the App, as per user data	Core Users	You are special for us, become a member/renew your membership for just Rs.49	Swiggy One Membership	We are one, you are part of our family, special membership for you at just Rs.49	Converting Core users to Power users	Showcasing how a Swiggy One customer can have various benefits and how they need to only pay a small fee for the membership	Highlighting you can do more with the membership and what the user stands to gain	After every 10 purchases- if one is not a Swiggy one member	No of Swiggy One Memberships purchased	15% increase in Swiggy One Memberships
Campaign 4	Offer of the day 1-2 items at a lower price will help engagement of Casual User	App notifications, Social Media	Casual User	Steal deal of the day	Deals Section	Special offer on Lays today at 20% off only on Instamart	Converting casual to core users, and to move core to power users	Encouraging purchase behavior on swiggy for users who don't use the app regularly- impulsive items such as snacks sweets etc	Highlighting it is easy to buy snack items or cravings on Swiggy	Weekends and on mid week (twice a week)	No of orders made as per push notifications of the app- eg, chips, choc etc, Increased Frequency of orders	Percentage of casual users moving to Core Users in 3 months, increase in frequency of orders for Casual users
Campaign 5	Swiggy Roulette for Power Users will keep them engaged as loyalists	App notifications	Power User	Free item every month for power users	Offer Section	Did you try the Instamart Roulette this month? Try and win a week's groceries !	Converting Power users to loyalists	A roulette to win a weekly grocery voucher for 2K run once a month- to keep engagement with Power users	Highlighting why Instamart should be your top choice for groceries	Once a month on last weekend of the month	No of users signing up for the Roulette	No of spins on the Roulette

Bird's eye View:

Sources:

Swiggy collaborates with SwopStore, to boost sales and customer retention

Swiggy Business Model & Growth Strategy - GrowthX Deep dive

Possible Reasons for Retention:

Swiggy uses a single app for all its verticals unlike Zomato- so users ordering food, or using Dineout can end up exploring Instamart and end up ordering and becoming an Instamart user.
Swiggy's retention rate is high due to its item availability and ontime delivery availability, especially when compared to Blinkit and Zepto. (This data is based on user interviews).
Swiggy's retention percentage of 15% by fourth week is across all verticals.
Instamart Grocery items are easy to search for and find, unlike Blinkit - (validated through user reviews)
Habit of Ordered and familiarity with the app, makes an user stick to Swiggy rather than use Blinkit
One unfavorable experience with a competitor -causes users to switch and keep using Instamart due to the quality and timely delivery.

Microscopic View:

Which ICPs drive the best retention?

The order in which the ICP's drive retention is ICP3> ICP2 > ICP1

ICP 3: Drive the highest retention, these are the users who completely rely on Instamart to order their products. These users are working professionals living alone or with kids who have very limited time to buy items from convenience or grocery stores. They usually have a cook and rely on Instamart to buy groceries for their daily menu planning- because often cooks at the last minute inform them of missing key ingredients. When the cook is absent, they order food through the Swiggy food delivery app.

ICP 2: These are the people who like cooking some of their own meals and like to go out to grocery shop for gourmet items. They look at Instamart for they daily needs for household items and staples. Their primary use is ordering groceries and also using Dineout to try different places to eat. These are the foodies.

ICP 1: These are the users who use instamart very less frequently, they are infrequent users of Swiggy itself. They open the app rarely , and when they do its to order food for special occasions, or grocery items in case of sudden emergencies like guest at home , or very crucial ingredient missing etc. These users still trust their local convenience store and like the comfort of doing it their old way.

Which Channels drive the highest retention?

Instamart drives the second highest retention after food delivery. It is growing at a very high speed. This is because

Groceries are required by every household in the country
On time deliveries are essential factor driving retention
Availability of location specific ingredients and spices are crucial factors
Location of strategic dark stores all over the city

Desktop Research - Source - Statista
The Grocery Delivery market in India is expected to generate a revenue of INR US$30.65bn by 2024.
This projection indicates an annual growth rate of 19.24% (CAGR 2024-2029), resulting in a market volume of INR US$73.89bn by 2029.
The average revenue per user (ARPU) in the Indian Grocery Delivery market is estimated to be INR US$183.40 in 2024.
Additionally, the number of users in this market is expected to reach 263.8m users by 2029.
Furthermore, the user penetration rate in the Grocery Delivery market is projected to be at 11.6% in 2024.
The rise of online grocery delivery services in India has revolutionized the way consumers shop for groceries, providing convenience and accessibility like never before.

Reasons for Churn

Reasons	Type	Explanation	Negative Action
Longer delivery timelines	Voluntary	One of the most important reasons for churn, if a user finds a longer delivery timeline for their Instamart order they will likely switch to a competitor offering to deliver faster	Items removed from cart Order not completed/cart abandoned Decrease in order frequency and order value
Delay in delivery	Voluntary	The core value proposition of Instamart is on time delivery, if a customer gets delayed delivery- they end up having a negative experience with the product	Increase in user using the delivery tracking page Increase in users using the chat functionality - asking " Where is my order?" Increase in open tickets- asking orders to be cancelled or refunded. Increase in late delivery feedback Increase in 1–2-star ratings
Bad quality of items delivered	Voluntary	Items delivered are spoilt, or spilled/damaged in some manner, violating the basic expectation of a customer - leading to a negative experience	increase in refund requests for bad quality items Increase in 2-star ratings Request for replacement items Decrease in usage frequency
Incorrect Items Delivered	Voluntary	Wrong items delivered instead on the ordered items- leading to unpleasant customer experience	Refund request Pics uploaded via support tickets of wrong items delivered. Decrease in order value or frequency
Moved Abroad or to a location where Swiggy Instamart does not deliver	Involuntary	Moving to a Tier3 city in India, or abroad where there is no Swiggy Instamart	App inactivity Notifications of unserviceable area
Moved to a location where competitor has a better delivery service	Involuntary	Moved to a city where Blinkit /Zepto has a better network and availability	Periods of app inactivity Reduced frequency of use/reduced order value Notifications of items not available or location not currently serviceable
Lifestyle Change	Involuntary	Moving with a partner or parents - where the family members are responsible for majority of the shopping	Periods of app inactivity Reduced frequency of use/reduced order value
Proximity to good local grocery shops	Involuntary	A new local grocery shop in the area which is within walking distance and also delivers orders home	Periods of app inactivity Reduced frequency of use/reduced order value

Here are 5 resurrection campaigns for Instamart:

Campaign 1: Our delivery partners are trying very hard to get your items to you, please enjoy a complimentary chocolate/dessert for our delay on your next order!

Hypothesis	Customers don't like a delay in delivery time and switch to alternatives/competitors. This campaign appeals to the emotional side of them by showcasing the delivery partners Adding a complimentary dessert on the next order will motivate the customer and drive engagement
Channel of Distribution	Online/Social media/In App
Persona/Type of User	Casual user/Core User/Power User
Pitch and Content	"Our delivery partners are our heros here's how they get your order to you, but even superheroes are caught in traffic, to make up for this, we have added in a complimentary desert on your next order"
Goal of the campaign	To lessen the negative experience an user has when getting a delayed order
Offer	Free icecream/choc with every delayed order - on the next order
Frequency and Timing	Peak Order times, Festivals, Adverse weather situations
Success Metrics	Reduction in delivery delay complaints, reengagement with the app
Milestones for the campaign	10% reduction in delivery delay complaints with a month of implementation
Reasons It will work	Appeals to emotional side of the customer, customers love a free gift
Proposed Flow	User gets a popup Order delayed- > You are eligible for a free dessert on us-> Please click to apply to your next order

Campaign 2: Gourmet items Wishlist

Hypothesis	Users going to grocery stores to buy Gourmet Items will choose Instamart if they knew they know they have the option to buy on the app
Channel of Distribution	Social Media, In app push notifications
Persona/Type of User	Core User- the one who uses Instamart for 50% of their grocery needs
Pitch and Content	"Can't find your favorite Grocery/household item? Please put it on your Wishlist and we will get it to you!"
Goal of the campaign	Reengage users who go to grocery stores for shopping gourmet items
Offer	Swiggy Instamart will get the wishlist items in their inventory
Frequency and Timing	Bi -Weekly
Success Metrics	No of wishlisted items, reengagement rate
Milestones for the campaign	Having 3 wishlisted items onboarded in a month
Reasons It will work	Users feel valued, and like to give in their inputs
Proposed Flow	Search for an item ->Not found-> Add it to your wishlist-> User wishlists item-> Swiggy Instamart onboards it-> User gets a notification that your item is available

Campaign 3: 10 min Delivery promise

Hypothesis	It will reinforce Swiggy's core value proposition about on time delivery , and build confidence in Swiggy for customers
Channel of Distribution	In app push notifications
Persona/Type of User	Core/Power Users
Pitch and Content	"We promise to deliver your products in 10 mins, guaranteed 10 minute delivery or you next order up to INR 200 is on us!"
Goal of the campaign	To get the users engaged with the app, who left due to longer delivery times
Offer	Next order upto INR 200 free if we miss 10 min delivery time. ** Voucher valid for only 15 days
Frequency and Timing	Bi weekly, during weekends
Success Metrics	Increase in orders, reduction in delivery complaints
Milestones for the campaign	10% increase in orders in the first month
Reasons It will work	Directly addresses the problem with delivery timings, and gives the user the incentive to buy again on Instamart
Proposed Flow	User places an order-> receives in 10 mins-> if not gets a voucher of INR 200 that is automatically applied on next checkout

Campaign 4: Instamart Seal of Safety and Freshness

Hypothesis	When items delivered are of bad quality, it results in negative experience for the user. A seal of safety assures the user that the items will be of good quality
Channel of Distribution	In app push notification
Persona/Type of User	Power Users
Pitch and Content	"Instamart's seal of safety and freshness ensures your order is of high quality"
Goal of the campaign	Reinforce trust in Instamart quality of items
Offer	Customers when ordering on Instamart will be shown a green tick stating you order quality has our seal of safety.
Frequency and Timing	Once in two weeks
Success Metrics	Reengagement with the app, fewer quality complaints
Milestones for the campaign	Increase in orders after implementation by 10% from Power Users
Reasons It will work	Assures the customer about order quality
Proposed Flow	User orders-> Shown notification that this order has Instamart's safety seal

Campaign 5: Personalized Discounts based on Order History

Hypothesis	When users get personalized discounts based on their order history, they are more likely to be repeat users
Channel of Distribution	In app push notifications
Persona/Type of User	All types- Causal/Power/Core users
Pitch and Content	"We saw you ordered this on your last 2 orders, here is a special discount only for you!"
Goal of the campaign	Promote loyalty and retention to the brand
Offer	Discounts based on order history on products
Frequency and Timing	Once in 2 weeks
Success Metrics	Feedback on orders, repeat orders of discounted items.
Milestones for the campaign	10% Users ordering discounted recommendations
Reasons It will work	Customers love personalization and discounts
Proposed Flow	In app notification - we saw you bought Whiskers for your last two orders-> Here is an exclusive discount just for you-> Click to repeat your order-> user orders-> gets a discount