This Startup Will Deliver Your Groceries By Electric Van, For Free!
It will save you money, it will save you time, and it will save the environment. The Dutch startup Picnic is about to go into business, and it has the potential to really disrupt the grocery market.
Picnic is a concept that has been under development for the past three years by a team of 30 specialists. Backed by four investors, it tried to come up with a new business that would be able to gain a position in a market dominated by giant companies in the grocery market. After having conducted a survey that made clear that a whopping 80% of consumers would like to have their groceries delivered to them, Picnic initiators wondered why the share of actually delivered groceries is still very low.
Michiel Muller, a Picnic cofounder who was involved in establishing some other successful companies, said in a broadcast of current affairs program “EénVandaag” that they found two obstacles. One is that consumers are in general unwilling to pay for delivery costs. The second obstacle is that consumers don’t want to have to wait at home for a couple of hours for their groceries to arrive, as a result of inaccurate and inconvenient delivery times.
Picnic seems to have gotten rid of those obstacles. Customers can choose when they want to receive their order, and the company promises that the actual delivery will take place within half an hour of the agreed time. Concerning price, Picnic aims at doing more than just eliminating delivery costs. It says it will be cheaper than all other supermarkets that are currently active in the area. No matter which product, for every item they sell, the company guarantees the lowest price.
So, how is this possible? Picnic is organized in a completely different way from conventional supermarkets. Where these competitors have to invest in physical stores and maintain them, Picnic’s main concern might be keeping their app up and running — because that’s where the Picnic’s customers “go.” They don’t go to the store; they just open their Picnic app on their smartphones. This is also the reason why delivery tends to come with additional costs for many other supermarkets — they have to operate both the conventional and the delivery system, while Picnic just focuses on the latter.
An additional benefit of the new formula might be waste reduction. Conventional supermarkets have to buy their goods in advance. Suppliers deliver a quantity to the them based on expectations about how much will be sold, but in reality, these expectations often turn out to be a bit too optimistic, resulting in a substantial annual waste of (primarily fresh) food. Picnic doesn’t need to order in advance. It knows for each day exactly how much of each product is demanded, and simply orders that quantity from the suppliers. This is not only great for the environment; it also reduces the costs of operating this kind of business, making it even more competitive compared to the conventional supermarkets. So, no waste (or close to no waste) on Picnic’s side.
However, this might also shift the waste problem to the suppliers, which will be confronted with less predictable demand. Therefore, I am not sure yet whether the amount of waste in the whole product chain will be substantially lowered as well.
The great thing is that the company decided to use electric vehicles for all deliveries. Picnic seems to be operating commercial utility vans from the company Mega, which states its EVs have a range of roughly 110 kilometers. That’s not too much, but considering the fact that Picnic operates only in densely populated areas at the moment, the range should be enough to distribute the limited load of the car over all of the customers.
Groceries are put in crates, which perfectly suit the modified cargo space of the Mega EVs.
Currently, Picnic is running a pilot project that involves 150 households, all within the city of Amersfoort, the Netherlands. Sometime this month, the startup will open up its services to all inhabitants of the city. If this turns out to be a success, the company will expand further.
Analysts are divided about the future of Picnic. There is skepticism because the startup will have to compete against enormous established grocery companies, which already have experience with delivery services. Moreover, the market for online grocery shopping is relatively small and the average grocery shopper is unaccustomed to the way Picnic will serve them. But there is also optimism. Picnic seems to have a lot of knowledge and some features consumers might really fall in love with. Books, clothes, and consumer electronics are just a few examples of things that are already for a large share bought online. Groceries might be the next big thing that will shift to the digital domain, and in doing so, might well reduce the overall environmental impact of the industry.
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Would that not be something along the lines of some other start ups, like Tesla?
Change a few things how stuff get done currently.
I think it is a cool idea! 🙂
In the dotcom bubble of the late 1990s, several companies in the USA and UK tried to make a go of online shopping plus home delivery. They all failed. Supermarkets now offer both delivery and drive-in pickup (known in France as “le drive”). A big store is its own warehouse.
They didnt just fail….they failed spectacularly! losing millions from day 1 and never showing any indication of turning a profit. I dont know anything about the Dutch market, but in North America- grocery profit margins are very thin. Promising the lowest prices and fast free delivery is a sure fire way to bankruptcy.
Here (in the Netherlands) margins are very thin too.
There are some regional *) organic delivery services that run for about 10 years already, but they deliver only once a week. (totally different concept).
In itself Picnic is interesting,. But the concept only works when they succeed in delivering to many clients in a small area. As they say that they will make it easy for people and having more possible deliveries/week they might be right that they will serve more costumers, but with more deliveries/week I guess that more people will order the same amount/week but spread over 2-3 deliveries. (driving up the cost/delivery.
The dominant supermarket chain AH (Ahold) is delivering for some years and says it still doesn’t make a profit. And I think I can agree with that. Only the time the driver is in front of my house delivering is more than the cost of delivering.
*) regional in the Netherlands is less than 50 sq miles.
I like the little Mega electric truck shown in the pictures. It’s the sort of thing you know probably wouldn’t stand a chance in hell of getting on the streets of America,
but it’s still cute . . .
http://www.mega-vehicles.co.uk/en-e-worker-basic-versionchassis-cab.html
Regarding the food delivery business model: I would only use something like this for prepackaged goods and non-perishables. My wife and I typically prefer to not trust anybody else picking out our fresh produce sight unseen. Some stuff you just want to physically view before buying.
Also . . . when I’m in the grocery store with a list, I often buy at least one or two things I didn’t intend on buying in the first place. I read labels for ingredients and this sort of detail might or might not be on a web site where I would order things to get delivered.
As a service tech in a VERY small company, I find that after insurance, etc., fuel costs are the biggest expenditure. With sufficient daily range and payload capacity, a capable EV van would be most welcome, should the price make good business sense.
I saw some like that when in Amsterdam. They are apparently used for various city purposes.
I think the fresh produce will make the difference in what supermarket will win the delivery war. I have tried some. So far only 2 could win my confidence. The others fucked up with fresh or frozen stuff.
The winner for me was an organic farmers cooperative that is in this business for 10 years now.
This is basically how Restaurants get their food, it doesn’t come from a retail store, it comes directly from the wholesaler/distributor (who is the one supplying the grocery store as well) and is delivered daily so this is not as radical as it may seem.
The viability today is going to come from greater consumer willingness to use online apps to order with so that customer density is higher.
Here you see wholesalers entering the consumer market very effective, but still on a small scale. For consumers it is cost effective if they buy a large enough order.
I am personally very curios how this team of 30 specialists seemed to have
copied the idea from my startup. Not only that, but their branding looks similar
too. Kudos!!!
I always told my students that, when doing research, look for the best idea that can be found and then build on it.
Plus, there’s always a chance that two or more people learned to knap flint independently of each other.
Tosses rock on harder rock. Observes piece with really sharp hard edge. Contemplates what to do with it. Doesn’t work well as a toothbrush but it cuts stuff really well….
Do you still accept new students? You sound like a very wise person, and I would like to sign up.