Picnic, will this be the future?


hoi

Picnic is possible competitor of Albert Heijn and other supermarkets. A lot of startups tried to accomplish to be an online supermarket. Picnic is one of them. The different with Picnic is that the delivering costs are low because of a good logistic system, unlike other startups. Picnic does not have francize companies and does not have expensive buildings. Overall, this can lead to a low cost online supermarket company (z24.nl, 2015). Online shopping will be the new standard as if people are getting used to the fact that the daily groceries at scheduled times are delivered to the door. The consumentus digitalis is coming. Albert Heijn was for a long time the only supermarket with a delivery service. Nowadays, Jumbo also Jumbo started online shopping and a delivery service. Picnic is the first company that get guarantee very low delivery costs.

The online supermarket phenomena has a quite interesting history. In the United Kingdom, according to research of IDG, less than 5% of the daily groceries ordered online. So overall, as if it is possible for consumers to order groceries online, firms are losing money. In Netherlands less than 2% of the consumers orders daily groceries online. But, as I told before, as if people are getting used to it, it can be the new standard. Overall, selling food over the internet is not easy, but there are more products of which everyone mistakenly thought that no one would buy them digitally. A very good example is shoes. Zalando disrupted this market.

On the other hand, Albert Heijn targets consumers also in a inventive way. Albert Heijn opens stores, which are close to the consumer in terms of location and product offering. Molenaar (2013): in the Netherlands, we see a growth of one-person households. Smaller quantities, get something to eat on the go and not necessary eating at home are characteristics of this people. AH to go creates value for this kind of consumers.

What do you guys think? Will Picnic be the next big thing? I’m curious what the future holds.

Sources:

FD (2015). Boodschappen bezorgen heeft de toekomst. Available at: http://fd.nl/ondernemen/1115647/boodschappen-bezorgen-heeft-de-toekomst

Z24.nl, (2015). 3 redenen waarom Picnic Albert Heijn en Jumbo pijn kan doen. [online] Z24. Available at: http://www.z24.nl/ondernemen/3-reden-waarom-picnic-met-succes-albert-heijn-en-jumbo-kan-kietelen-580179 [Accessed 22 Sep. 2015].

Rijlaarsdam, B. (2015). Zo maak je Albert Heijn weer succesvol. [online] NRC Q. Available at: http://www.nrcq.nl/2015/01/16/dit-is-de-to-do-list-van-de-nieuwe-directeur-van-albert-heijn [Accessed 22 Sep. 2015].

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9 responses to “Picnic, will this be the future?”

  1. 375253nl says :

    I had never heard of Picnic, but after reading your post I got curious. So I visited the Picnic site and I think this can be a great threat for Albert Heijn and Jumbo. PicNic delivers groceries for free, while Albert Heijn delivers from € 4.95 and only if you place an order above €70. Besides PicNic guarantees the lowest price which makes it extra attractive. I think that Albert Heijn will try hard to adjust their logistics in order to compete with PicNic. It will be difficult since PicNic has totally different business model without a physical store and stocks. It will be the question whether Albert Heijn will win this battle or not.

    http://www.ad.nl/ad/nl/1012/Nederland/article/detail/4113975/2015/08/05/Nieuwe-online-supermarkt-daagt-AH-en-Jumbo-uit.dhtml

    375253nl

  2. 373227yj says :

    Interesting concept, fully utilizes the make-to-order concept. Definetly better than Jumbo in my opinion, since Jumbo only offers online grocery that needs to be picked up yourself, you might aswell go to the supermarket. However, I doubt whether Picnic can stands against AH due to several reasons.

    First of all, AH has an excellent accessbility; where ever you go in The Netherland, you will stumble across a branch of AH. Their delivery service is nation wide with distrubtioncentres spread across the country, their huge number of outlets can potentially back up the delivery service and fulfil the order on the spot. Picnic on the otherhand, needs at least as many distrubtioncentre to compete with AH, which is a huge financial burden for a start-up.
    Secondly, it is to me unclear if Picnic has a order threshhold (I downloaded it and registered but couldn’t use because there are 3525 people in the queue waiting to use the service, therefore I was not able to check if there is any order threshhold), AH does have an order threshhold of 70 euro to justify their delivery effort and they are planning to deliver for free in the near future as a countermove to online grocery companies such as HelloFresh and Picnic (Goossens, 2015). But lets assume that Picnic does not have any order threshhold, which means you can have an order delivered to home at any price. Then I really do doubt the financial feasiblity of this free delivery service. For example, someone orders a bag of banana and let it delivered for free, there is no way that it is gonna be profitable no matter how innovative their logistic chain is. Therefore Picnic must have certain order threshhold and it must be significantly lower than their counterpart, in this case AH, if they want to compete with them. Because AH’s order threshhold is what put me off to order from them.
    Last but least, people prefers status quo especially with so many AH supermarkets just around the corner. Why would people bother to change? Also the reputation that AH has gained throughout the years further enhances this status quo, same applies to the ever increasing offerings of AH. Therefore PicNic really need to stand out and have some unique selling points that people can’t take their eyes off in order to make current AH customers switch to their side. As for now, I do not really see that this is likely going to happen, especially that AH is planning to deliver for free aswell.

    PS: if you know about the order threshhold of PicNic, please let me know.
    Source
    Goossens, R. (2015) Albert Heijn gaat gratis thuisbezorgen, http://daskapital.nl/2015/08/albert_heijn_gaat_gratis_thuis.html, 5 Oktober 2015.

  3. Maxim Grgurevic says :

    The first time I heard of Picnic was the day before I went to Asia for two months. It was a new disruptive concept, founded bij Michiel Muller and his team. On the news they said Picnic would be launched in September. Between now and then I didn’t read anything about Picnic until now. You wrote a really good blogpost I have to say.

    In my opinion online grocery stores are the future. For people who are working full time jobs it is perfect. In the end it takes a lot of time to buy your groceries for the week, in my case it costs me 1.5 – 2 hours per week. Not speaking of the fact that, if you go to a grocery store in the evening some products are sold-out. Now it is possible to order your groceries online. The thing what is holding me back for now are the delivery costs. Picnic would be very interesting for me because of their low delivery costs and a good delivery schedule. So in the future I will only buy my small groceries at the physical stores, like bread, meat, cheese.

    I only found one problem for Picnic. Normally when you buy your groceries in a physical store you also buy a lot on products whom are not on your shopping list (In my case..), because they have a good promotion or the product is new. When you buy your product online, I think, you will online buy the product you actually need. You wont be buying a lot of these promotion product anymore and you wont try more new products. For the big grocery brand it will be not really interesting anymore to give a promotion deal, because not many people will buy it. So, how will Picnic sell these products?

    At the end the concept of Picnic is great. For me it would be a great outcome. But I think I’ll keep on buying the same products every week and try less new products.

  4. Maxim Grgurevic says :

    The first time I heard of Picnic was the day before I went to Asia for two months. It was a new disruptive concept, founded bij Michiel Muller and his team. On the news they said Picnic would be launched in September. Between now and then I didn’t read anything about Picnic until now. You wrote a really good blogpost I have to say.

    In my opinion online grocery stores are the future. For people who are working full time jobs it is perfect. In the end it takes a lot of time to buy your groceries for the week, in my case it costs me 1.5 – 2 hours per week. Not speaking of the fact that, if you go to a grocery store in the evening some products are sold-out. Now it is possible to order your groceries online. The thing what is holding me back for now are the delivery costs. Picnic would be very interesting for me because of their low delivery costs and a good delivery schedule. So in the future I will only buy my small groceries at the physical stores, like bread, meat, cheese.

    I only found one problem for Picnic. Normally when you buy your groceries in a physical store you also buy a lot on products whom are not on your shopping list (In my case..), because they have a good promotion or the product is new. When you buy your product online, I think, you will online buy the product you actually need. You wont be buying a lot of these promotion product anymore and you wont try more new products. For the big grocery brand it will be not really interesting anymore to give a promotion deal, because not many people will buy it. So, how will Picnic sell these products?

    At the end the concept of Picnic is great. For me it would be a great outcome. But I think I’ll keep on buying the same products every week and try less new products.

    Maxim Grgurevic
    372850

  5. 358345mh says :

    Thanks for sharing this interesting post with us! I really like the concept of Picnic, and I am curious about the future of the online grocery.

    After reading your post I was also curious about the business plan of the online grocery. How does the company think they will be able to compete with the well-established physical groceries stories in the Netherlands? And how about the web shops of Albert Heijn and Jumbo?

    Are Dutch people ready for online grocery stores? In my opinion, more and more people will use the online groceries for shopping since most of us are having full time jobs and do not want to spend too much spare time in the supermarket. Picnic has conducted a survey, in which 80% of the consumers said they would like to have their groceries delivered to their houses .

    Michiel Muller, one of the cofounders of Picnic, said they found two obstacles for consumers to shop at online groceries: consumers are not willing to pay for delivery costs and consumer do not want to wait for their groceries to arrive. To solve those obstacles, Picnic came up with some good ideas. Customers are able to choose a delivery time, and the company promises that the actual delivery will be within half an hour of the chosen delivery time. Besides, Picnic promises free delivery.

    Will this be enough to persuade the Dutch customers to change from physical grocery stores to Picnic? The company guarantees the lowest price to its customers. Furthermore, shoppers are able to order their groceries by using the Picnic application. In this way, they are able to order their groceries wherever and whenever they want.

    For me, this way of grocery shopping sounds convenient. Let’s see what the future of Picnic will be!

    http://www.nltimes.nl/2015/08/05/online-supermarket-promises-free-delivery-lowest-prices/

    http://gas2.org/2015/09/21/picnic-uses-evs-to-deliver-groceries-for-free/

    https://www.picnic.nl/

    http://www.retailwatching.nl/formules/artikel/uLJZqDH0SiCrtQXNM1Rqqg-0/zeven-feiten-over-de-innovatie-die-picnic-heet.html#.Vg0yLqITNHU.linkedin

  6. 371212vs says :

    Picnic was a new organization for me, I never heard of them. After doing a little research on them I discovered that Picnic is very innovative and is ahead of other grocery shops when looking at the online aspect. Delivering groceries for free and offering the lowest price are two features that will lead to a great competitive advantage for Picnic.

    I started to imagine me ordering groceries at Picnic, but I do not believe that Picnic is able to make a profit on delivering groceries to the village I live in. There are approximately 1400 inhabitants in my village and it is located near to Belgium. We have a very small supermarket in the centrum of our village, but for a large one like Jumbo or Albert Heijn we have to drive about 6 kilometers. I cannot believe that Picnic can operate profitable by offering free delivering to the inhabitants of my village. Because we are so hard to reach, the distribution costs will probably exceed the revenues.

    So in my opinion, Picnic will be profitable and a strong competitor for Albert Heijn and Jumbo in the crowded areas of the Netherlands. But the little villages, which together are a large part of the market, will never be profitable for Picnic.

  7. 353958bk says :

    Interesting topic!

    I personally believe Picnic will not be able to sustain an advantage in the long-term. Currently, they offer optimized delivery services at a lower cost, but this is likely because competitors such as Albert Heijn are still focusing mainly on retail sales. As stated, the share of groceries purchased online is still low. The online grocery business will surely expand however, and Albert Heijn will probably focus more and more on digital natives, and making their online delivery system more competitive. This will only be intensified by the rise of mobile grocery shopping. The increased expenditure on online and mobile e-commerce, in combination with the stronger brand names of Picnics competitors may be a significant risk for them. Competitors such as Albert Heijn, who have large-scale infrastructure, extensive customer information they can use to tailor offers, and a strong brand name, will continue building their online capabilities. Furthermore, by focusing on optimizing logistics, they can further decrease delivery costs. Therefore, if Picnics main selling point is cheaper delivery, they may have troubles becoming a significant threat to competitors. Nevertheless, it will be interesting to see how large retailers adapt to the growing online delivery segment, whilst efficiently running their retail business, and whether or not new start-ups can become a serious threat for them.

  8. 370033ss says :

    I do believe that online supermarkets can work, but they will not replace physical stores. For me, they could work as complements. Commodities such as cereal, milk, washing detergent, etc. could be delivered. They are also heavy to carry and having them delivered (especially in the Netherlands, where I have to bike to do groceries, would help). But for example fresh fruit, vegetables and meat, I would prefer to pick out myself. For these perishable and fresh products, I prefer to smell them and assess the quality myself.

    I think it will be extremely difficult to compete with the big supermarket chains on grocery deliveries in general, if you are just a small startup. However I do believe that if you set up your delivery business in a smart way, you can still get a good shot. I think focusing on vegan and organic products could be an option. I think focusing on a certain niche is what is important here. Even though big supermarkets are also offering vegan and organic products, the selection is still relatively limited. I think offering a good range of these products could help a start up such as picnic to compete with the bigger players.

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