Why would Amazon pick and pack from a retail store and not a distribution center?
And what does Instacart bring to the table?
Amazon already has a website and seems to have no trouble building gigantic on-demand workforces. What else does Instacart have? I would guess close to 100% of Instacart users already use Amazon for things as well.
I don't see things ending up well for Instacart at all.