Same-day delivery has become a must-have for most major retailers over the last few years, but 24 hours doesn’t cut it anymore. Fifteen-minute grocery-delivery services—see: Fridge No More, Gorillas, Jokr, and 1520—hit American cities seemingly all at once, with branded bikes and fulfillment centers popping up left and right.
“It’s really low capital to start these companies, so when the first one opened in Europe...there were many copycats, to the point where now it’s actually a fairly big business,” said Brittain Ladd, chief supply chain and marketing officer for tech solutions provider KPI.
- Grocery delivery companies worldwide have raised $8.9 billion so far this year, per data provided by PitchBook.
Jokr, which closed on a $170 million Series A this summer, is one of the new players in this growing space. Founded in March, the startup has expanded from Europe almost as quickly as it delivers: It counts 100 hubs worldwide, across seven countries; 10 alone are in the New York metro area.
We recently stepped inside Jokr’s Williamsburg hub to see what goes down behind the scenes.
How the sausage gets delivered
The warehouse was relatively small (they’re usually anywhere from 2,500 to 3,500 square feet) and organized like a mini specialty supermarket. Aisles were stocked with kava beverages, almond milk, fun-sized candy, non-GMO dried fruit, chickpea pasta, ramen, frozen cauliflower pizzas, eggs, cleaning supplies, cereal, organic protein snacks, spices, taco shells, diapers...
While inside, I browsed the bubbly blue Jokr app and tapped to buy a pamplemousse LaCroix. A siren rang upon checkout and a nearby printer spit out my order. A Jokr-employed packer retrieved my beverage from the stacked seltzer section(LaCroix is one of the platform’s biggest sellers across all NYC hubs), placed it in a branded bag, and handed it to me while a manager marked and filed away the receipt. All in a tight three minutes.
Another order came in shortly after and the pickers performed the same dance, this time with apples and granola bars, before handing a packed cooler to a courier who was already positioned on an e-bike in the doorway.
Bada bing, bada boom, groceries to your door in under 20 minutes.
Jokr
Notably, Jokr doesn’t charge a delivery fee or require a minimum order amount. Tyler Trerotola, who helps lead Jokr’s US operation, told Retail Brew that the company is betting on its tailored hubs to deliver for the startup. (The company is not yet profitable.)
- A Jokr warehouse normally carries ~1,800 SKUs, verus a grocery store, which might have 15,000, Trerotola noted.
“We’re turning over things daily. Ideally, we’ll get to a world where what’s in our fridges during the day is different from what’s in the fridges at night, where there’s such high turnover from orders that we reduce wastage and reduce inventory costs,” Trerotola explained.
Think local
Hub locations are chosen based on population density (the higher the better) as well as consumption trends, according to Trerotola: “Where is the best area that is going to drive the highest basket size?”
- Jokr’s delivery range spans about a mile from each hub.
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From there, Jokr gets even more local. The company tailors each hub’s product selection to the neighborhood, counting on this hyper-specific approach to set it apart. “One of the ways we’re going to differentiate is at the neighborhood level. We’re looking at the data every day, seeing what’s being bought,” Trerotola continued. “What do the customers care about? Who is the target in that neighborhood? Williamsburg is a different customer than Union Square.”
A young family is going to order different kinds of groceries than, say, a finance bro. Jokr might stock baby products in LIC and pong balls in LES.
- Brittain Ladd said it’s a smart tactic: “That helps [Jokr] make really more informed decisions on what products to store or to purchase and what to have available.”
For example, last month, when Jokr noticed more app sessions in the AM hours, the team added fresh bagels to its assortment. It also found users searching for challah bread on Thursdays and Fridays, so Jokr signed a local partnership with Breads Bakery to get fresh challah every day.
The right stuff
Getting the product assortment down will play a huge role in determining success. Jokr buys inventory directly, so it owns the end-to-end process. Plus, the no-fee model is a risky one, Zachary Dennett, who heads things up with Trerotola, has previously acknowledged.
- “In a theoretical sense, it’s a big risk, and of course we can’t run our business if all of our orders are 50 cents. But we’re not seeing that happening. What we’re seeing is that the distribution and the average [purchase] are making us very comfortable,” he told Grocery Dive in an interview. (Trerotola declined to share Jokr’s average order value.)
Speed, on the other hand, sounds like a given. Both Trerotola and Ladd think most grocers will move to 15- to 30-minute delivery soon enough. “It’s about who can focus on not just the last mile….but everything on the other side: the end-to-end experience, procuring items, managing inventory,” Trerotola said.
“If you build the infrastructure and you have the right logistics, you can sell anything in 15 minutes. That’s the future.”
Ladd has similar predictions as shoppers embrace instant delivery: “Consumers will start asking, ‘Why is it that I can get my groceries in 15 minutes, but I can’t get a pair of shoes or a blouse?’ Retailers need to be prepared,” Ladd said.
“This has a big potential to be much more disruptive than many retailers understand.”