Super-fast grocery startup Jokr is looking to supplement its delivery business with a new venture – an advertising platform.
On Wednesday, May 11, the company is launching a service allowing advertisers to place digital ads in the company’s app and physical ads on driver bags and in delivery slips, according to a Bloomberg report. As part of this effort, Jokr will leverage purchase data to help brands be effective in their media placement.
“If we can share with retailers what people are buying, that gives a very targeted opportunity to advertise,” company CEO Ralf Wenzel told the outlet.
The news comes as super-fast grocers struggle to make the model’s economy work. A January report found that losses from these on-demand delivery services can amount to up to $20 per order on average, including ad spend. Fast-paced, Russian-backed grocer Buyk was unable to secure the financing it needed to meet the sanctions challenges posed by the invasion of Ukraine and was therefore forced to close shop. Jokr has also struggled, with a report earlier this year indicating the company was looking to sell its New York business.
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Additionally, those in other online grocery categories are expressing skepticism about the long-term viability of the model.
“Everyone is talking about…the potential rise and fall of this super-fast, small-basket, 15-minute delivery phenomenon,” Chieh HuangCEO of a non-membership wholesale eTailer Canned, said in an interview with PYMNTS last month. “So where is it going and how is it reshaping the online grocery world, and is it just a fad or is it here to stay? … This industry consumes so much money, because if you send baskets of 20 to 25 dollars, there’s just not enough gross profit to play with after delivery, after staff, after marketing.
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“It’s definitely structurally better if your article arrives in an hour than if it arrives in a week or more because you don’t have to plan that far in advance,” he said. declared. “However, at a certain point, marginal returns decline.”
See also: eGrocery customers expect more than digital shelves; They expect personal relationships
Across all online grocery categories, many players are ramping up their advertising capabilities. In March, Kroger announced it was expanding advertiser access through its retail media business, Kroger Precision Marketing, enabling greater e-commerce ad placement capabilities. Earlier this year, Instacart announced a suite of new marketing products for brands, including brand pages and new display ads, as well as a partnership with advertising agency WPP on new advertising solutions and measurement tools for consumer packaged goods (CPG) brands that will give customers early access to Instacart Ads products, tools and features.
Additional details: Kroger boosts its digital advertising business
Instacart intensifies the advertising offer for brands
WPP, the Instacart team on online grocery ads