Ultrafast Grocery Delivery Service Jokr Leverages NYC Lessons to Drive Boston Expansion

With many digitally connected consumers now taking the ability to get groceries brought to their door for granted, eGrocers need to step it up in terms of speed and convenience to stand out. And now, rather than expecting delivery within hours, customers are starting to expect them in minutes.

It might have seemed an impossible demand a few short years ago, but a new breed of ultrafast delivery services is rising to the challenge — and providing other players in the eGrocery space a taste of what it takes to compete in an underpenetrated market.

For instance, on Thursday (Dec. 2), Jokr, a 15-minute grocery delivery startup operating in three continents, rolled out an expansion in Boston, nine months after its U.S. launch in New York City.

Tyler Trerotola, the company’s U.S. co-founder, spoke with PYMNTS’ Karen Webster about how Jokr is leveraging what it learned in the Big Apple to better the needs of the City on a Hill from day one.

“With New York, it was our first time ever in the U.S. We didn’t know what to expect. We went in very occasion-based thinking with our assortment: what do people need at the last minute, right?” Trerotola told Webster. “We quickly see people actually fulfilling all of their groceries through Jokr, and from there, we’ve worked our way up to a lot more fresh dairy, meats, your fruits and vegetables.”

Jokr is bringing that wider assortment to 11 neighborhoods in Boston’s dense urban core — what residents call “Boston Proper” — and plans more U.S. cities to come in the near future.

Hex Code

At first glance, Jokr’s geographic expansion could look a little random. The company operates in Lima, São Paolo, Vienna and Warsaw, among other locales. However, this expansion comes down to a hexagon-based system that the company uses to choose its next markets.

“We split the entire world into small hexagons, almost our own version of Google Maps, and we rank every single one of those hexagons by the attractiveness to our business model,” explained Trerotola. To determine this, the company takes into account factors such as  consumption trends, grocery indices and population density.

Density is especially important, given that the ultrafast delivery model works best when there are more consumers to reach within a given area, allowing riders to get to more customers within a shorter period.

“Once we have that ranking … we try to find real estate within what we feel are the most attractive hexagons around the world,” Trerotola said.

The Ultrafast Advantage

In fact, flexible real estate options are one of the advantages of the model Jokr and other ultrafast grocery delivery services use, in which riders on micromobility devices — think bicycles, eBikes and scooters — deliver from dark stores.

As such, they don’t face the same constraints as consumer-facing stores, opening up possibilities and reducing real estate costs, since stores do not need to be in high-congestion sites. Additionally, with the speed enabled by the model, ultrafast services can meet consumers’ increasing need for flexibility.

“When you have these [2-to-3 hour] windows … on an Instacart … you have to block this large portion of your day where you’re stuck at home,” Trerotola said. “So [ultrafast delivery is] both the timing and the reliability — knowing it’s going to be there at that time … really allows you to plan for your day.”

The Road Ahead

Demand for online grocery is on the rise. Before the pandemic, online channels generated only a small share of total grocery sales. Now, according to data from PYMNTS’ report, What Consumers Expect From Their Grocery Shopping Experiences, created in collaboration with ACI Worldwide, 34% of consumers are buying groceries online.

Additionally, 18% of consumers prefer these eCommerce options to in-store shopping.

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The study also found that millennials and bridge millennials are especially likely to take advantage of online grocery delivery services, with more than 40% of these consumers utilizing these channels. Seventy-six percent of shoppers who have been purchasing groceries online more often report being motivated by a desire for ease and convenience, and 57% are motivated by a desire for speed.

Plus, Jokr’s data shows that consumers who try ultrafast delivery options, perhaps first utilizing the service to meet a last-minute need, tend to use the services more.

“The first order up to the fifth order, you just constantly can see that basket size increasing in both number of orders and also total spend on the platform,” Trerotola said.

Given the soaring demand, he argues, Jokr doesn’t need to be concerned about competition in the ultrafast grocery delivery space — the market remains underpenetrated.

“[Online grocery] is maybe around the 10-ish percent [of the grocery market], and probably in the next three to five years, that will double or even triple, which gives a huge opportunity to many players,” he said. “Now, it will be a bit of a race as to who can capture that demand.”