Funds continue to pour in for ultrafast grocery in spite of the economic challenges of the model. On Thursday (March 17), Turkish 10-minute grocery delivery company Getir announced that it raised $768 million in its Series E funding round, raising the startup’s valuation to $11.8 billion.
“We are defining the ultrafast delivery sector, and this latest round of funding is a testament to Getir’s position as industry pioneer,” Nazim Salur, founder of Getir, said in a statement. “In such an exciting and competitive market, we cannot afford to stand still. This investment will enable us to further develop our proposition and technology, as well as invest in our employees to continue to attract the best talent.”
Those in other eGrocery categories are skeptical of the feasibility of the economics of the ultrafast model. In fact, a report earlier this year found that on-demand delivery services’ losses can amount to as much as $20 per order on average.
Related: Ultrafast Grocers’ Losses Mount in the Face of an Uncertain Future
“It’s definitely structurally better if your item arrives in an hour than if it arrives in a week or longer because you don’t need to plan that far ahead,” Alex Weinstein, chief digital officer at online grocer Hungryroot, told PYMNTS in January. “However, at a certain point, there’s just diminishing marginal returns.”
See also: eGrocery Customers Expect More Than Digital Shelves; They Expect Personal Relationships
Instacart Gets into Contextual Commerce with Shoppable Recipe Launch
As eGrocery companies seek to drive adoption, many are turning to contextual commerce to embed shoppable moments into consumers’ typical web browsing routines. Instacart, for its part, announced Wednesday (March 16) the launch of shoppable recipes through content providers including TikTok, Tasty and select Hearst Magazines publications.
“We’re expanding our touchpoints beyond the weekly grocery shop or late-night cravings, and meeting people when food inspiration strikes and they want to discover new meals and cooking experiences,” Asha Sharma, COO of Instacart, said in a statement. “It’s a win for both consumers and the retail partners they shop from on our marketplace.”
The program allows consumers to add items to their Instacart basket through designated buttons on the recipe page. On TikTok, those who post the videos can earn payouts through the feature.
“The boundaries, the walls, between being on a retailer’s site and being on high-intent content are starting to blur,” Yuni Sameshima, co-founder and CEO of grocery marketing platform Chicory, which specializes in integrated shoppability in recipes, said in a January interview with PYMNTS. “So, if you’re a Kroger shopper, if you’re a Sprouts shopper, of course, if you’re on that retailer’s site, you have high intent. But just because you leave that retailer’s site, does not make you not a Kroger shopper.”
Read more: Shoppable Recipes Turn Brick-and-Mortar Grocery Shoppers into Omnichannel Customers
Cashier-less Checkout Tech Provider AiFi Raises $65M Series B Round
As digital technologies continue to influence the way consumers engage with physical stores, frictionless checkout is catching on.
On Friday (March 11), the Santa Clara, California-based technology company AiFi, which creates computer vision-powered solutions for consumers to pay for their purchases without stopping at checkout, announced a $65 million Series B funding round. Participants in the round include grocers Aldi South Group and Rewe, convenience retailer Żabka Group and others.
“The pandemic heavily influenced consumer preferences, including the need for quicker, more seamless shopping experiences,” Steve Gu, AiFi CEO and co-founder, said in a statement. “We relentlessly improve our AI algorithms to ensure we have a strong foundation to support our platform, and the success we’ve seen with diverse store formats, speed of deployment and a frictionless customer experience attests to the flexibility and maturity our product has achieved.”
According to data from PYMNTS’ study Today’s Self-Service Shopping Journey: The New Retail Expectation, created in collaboration with Toshiba, about a third of grocery shoppers reported that they had used self-checkout options for their most recent purchase. Additionally, more than two-thirds of grocery shoppers utilizing self-service checkout report doing so because they believe it is faster than traditional checkout, and more than half of grocery’s self-checkout users are motivated by a desire to skip the traditional checkout line.
More details: Consumers Want Self-Service Checkout Options But Rarely Get to Use Them
Giant Eliminates Pickup Fee as Grocers Struggle with Delivery Economics
Between the narrow margins of grocery retail, the high labor costs of delivery and consumers’ frustration with added eCommerce fees, it can be difficult for grocers to make the economics of grocery delivery work. Buy online, pickup in store (BOPIS) options, however, offer grocers the opportunity to meet the rising demand for digital convenience without needing to transport goods to consumers’ homes.
In an effort to incentivize adoption of this more cost-effective channel, Ahold Delhaize-owned grocery chain Giant Food, which operates 164 stores in the DMV area and Delaware, announced Tuesday (March 15) that it is making its pickup service free, offering fulfillment within four hours of purchase.
“eCommerce demand continues to escalate as more customers discover the time-saving benefits of online shopping at Giant,” said Gregg Dorazio, director of eCommerce for Giant Food, said in a statement. “Free pickup on all orders makes this personalized service even more accessible.”
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