A new way to shop in the Netherlands and beyond
Parking his electric van outside of a house in Amersfoort, Daniel Gebler grabs his grocery delivery and hands it to a customer waiting by their door. With a smile and a wave, he is on his way to his next stop as quickly as the time it takes for the customer’s cat to pull himself off the couch to find out who’s at the door. It’s a scene which seems completely normal, but what this customer doesn’t know is that the man who’s just dropped off their shopping is actually the chief technical officer of online supermarket Picnic, and one of the architects of a company which is revolutionising the online food shopping sector in the Netherlands and beyond.
But what drives a CTO to spend time making delivery runs for the firm he helped build into one of the Netherland’s most successful online retailers? “At least once per month we go out on a round, as we want to feel what the customer is feeling and how our teams are doing,” Gebler explains, sitting down with I amsterdam at Picnic’s headquarters in Amsterdam Zuid.
A gap in the market
Picnic’s determination to foster healthy relationships between customers, partners and even its own staff can be seen from the moment you step into its extensive office. The first thing that greets you is a table-tennis table, and after being whisked upstairs staff regularly pass by to ‘island hop’, visiting other team’s desks to ask for feedback and share achievements about projects. Not just computers, on one table sits a chessboard, its pieces patiently waiting for the next game to start.
It’s here that German-born Gebler holds court, explaining how after moving to Amsterdam to do his PhD at Amsterdam’s CWI he ended up as part of a team of 30 engineers who developed Picnic from scratch. The idea started when the firm’s founders saw the growth of online shopping for clothes, electronics and other goods and realised that no one was doing the same for food. “That surprised us, as half of the retail market is books, travel, fashion and all other goods, and the other half is food,” Gebler says.
The secret to Picnic's success
How it works is simple, customers use an app to order their goods and choose a delivery time, and after they have ordered the items are packed by a ‘shopper’ in one of its distribution centres, then delivered by a ‘runner’ at the designated time.
After an official launch in Amersfoort in August 2015, within the first-day Picnic had thousands of new customers. Over the next two years the service was launched in more cities around the Netherlands, and in early 2017 Picnic started building new warehouses to keep up with the growing demand. They are now building their fifth distribution centre in Rotterdam, and serve more than 60 locations in the Netherlands and Germany.
“The most important thing is that you should not be discouraged by early failures or naysayers,” Gebler says. “When we started only 1.5% of the market was buying food online, and people kept saying that food doesn’t work online. Instead, we saw 98.5% worth of opportunity. This switch of mindset is the most important one. We wanted to build a new category and market, and this is what keeps us busy day and night.”
Securing new investment and entering new markets
After securing more than €100m in investment during a series B funding round in 2017 and launching in Germany earlier this year, the company’s meteoric rate of growth shows no sign of abating. Picnic’s sales are predicted to more than double this year, from 100 million euros in 2017. “We have more than 120,000 customers using the service and another 50,000 on the waiting list,” Gebler explains. “But there’s a limit to how fast we can grow while providing a top service. To do that we have to limit how many customers we can take in.”
Talking about his industry, Gebler says that the automation of warehouses is one of the biggest changes currently taking place, which helps to make the order collection and picking operation much simpler. Another is Picnic’s work with other retailers to organise their delivery drivers picking up items that the customer is returning – they’re currently working closely online retailer Wehkamp to implement one such scheme. “We have such a great relationship with our customers and we’re seeing some of them multiple times a week, so it makes sense for us to organise helping them in this way too,” Gebler says.
A dedication to sustainability
This new scheme fits in nicely with the company’s dedication to sustainability and the circular economy. Another is Picnic’s reassessment of what packaging is needed when delivering food to customers. “If you take cornflakes you get a huge box, but half of what you buy is air,” Gebler explains. “That’s because if it’s on a shelf it needs to be attractive and needs to be transported easily. If you do the picking in a warehouse you don’t need this extra packaging – and so you can make it much more efficient, much more sustainable and better for the customer. We’re working to reduce the amount of packaging we use substantially.”
Another green scheme that Picnic has introduced is adding solar panels to their warehouses, which help power the firm’s fleet of 600 electric vehicles, and the company also uses a smart grid to route excess power back into the grid to help conserve waste. “We want to revolutionise and reinvent the food supply chain, from the producer to the consumer, and we want to be as sustainable as possible doing it,” Gebler adds.
As much as Picnic relies on its distribution model and technology to keep costs down and profits up, its most important relationship is the one that it has with its customers. As well as its senior management team regularly spending days delivering goods to the teachers, accountants and shop assistants (among others) who use their service, they also look for runners with a particular set of skills. “We don’t try and employ the traditional delivery person, but instead look for people who have come from a hospitality background,” Gebler explains. “Those people have grown up in an industry that knows how to serve and enjoys serving customers. That makes our business, and our customers appreciate it."
“Our focus is delivering perfect service to customers. We want to keep a top service for our existing customers, and then however much we can grow on top of that without disappointing them, we will do.” Whether stopping by with a delivery or planning the company’s next move from their office, it seems that the customer is always on Picnic’s mind.