Costco Expands Instacart Partnership with New Prescription Delivery Program

Thu. November 7th, 2019
- by Maggie Mead     

ISSAQUAH, WA - Delivery start-up Instacart has found a spot for itself in the grocery retail space, and has been forming partnerships with grocers for some time. Instacart has partnered with major retailers like Costco, Walmart, and Whole Foods (the latter of which saw the partnership terminated earlier this year). But now, Costco has expanded its partnership with Instacart to test a free prescription drug delivery program. The deepening of its relationship with Instacart seems a prudent move as the retailer seeks to strengthen its convenience capabilities.

The test program will take place in California and Washington, according to CNBC, and includes delivery with no fees on orders over $35 (minus tip), to a Costco member’s home or office. The pilot program offers a range of delivery speeds—some in as quick as an hour—that will require additional delivery fees, though usually less than $10. The news source reports that customers will receive updates on their orders via text, just as Instacart does for its other grocery delivery ordering.

Costco has expanded its partnership with Instacart to test a free prescription drug delivery program

There is one key difference between the new service being tested and standard grocery delivery services—only customers over the age of 18 may order, and they will be required to show proof of identity upon delivery. The service also requires the Instacart workers receive extra training and earn a Health Insurance Portability and Accountability Act (HIPAA) certification.

Costco has recently been trailing behind major retailers in the e-commerce space, so the expansion of its Instacart partnership could potentially give it a leg up on the competition. Because Instacart is such a major player in the grocery delivery sector, a more concrete partnership would be a boon for Costco.

However, Costco won't be alone in the $300 billion pharmaceutical market, as CNBC reported many big-name retailers are trialing their own services. That's not to say that Costco's new program, when paired with its already thriving grocery delivery services, won't prove to be a pivotal strategy in the crowded market.

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