How Picnic in small steps became a big success
Picnic has become big by taking small steps. In the digital innovations that the online supermarket chain is going through, ‘less is more’ is the adage, explained CTO Daniel Gebler during his keynote at TBX 2022 in the Jaarbeurs.
Gebler outlines the growth from startup to a “disruptive scale-up. ‘When we started in 2015, the share of online shopping within sales in the food industry was only about 1.5 percent. People often found it too expensive, were annoyed by waiting for the delivery guy, and providers were copying online sales models from retail that don’t work at all within the food industry.’
Picnic decided not to charge a delivery fee. Fewer times were offered for delivery in order to be more timely. The app was structured very differently from those of online grocery providers. Gebler: “When shopping online, customers choose almost 70 percent of the same products as in a previous order.
That data analysis also impacts operations. Picnic belsluitt to not include 15,000 products in its offerings as is usual for supermarkets, opting instead for three thousand products at first. That number was expanded after customer feedback.
Gebler’s story consistently shows where technology and business operations reinforce each other. To put its digital models into practice, Picnic also chooses to take control of logistics with its own fulfillment centers and self-designed delivery vehicles.
Natural speech recognition
Another example where technology is the flywheel for operations: the use of natural language recognition software. Gebler: “Complaints didn’t always come through properly because they weren’t processed properly. He explains that there are multiple ways customers report about the same thing: ‘The milk started leaking in the bag,’ ‘Milk spilled on all my groceries,’ ‘My groceries are wet because the milk carton broke.’ The software aggregates those complaints, despite those different descriptions.
And there are other examples where technology improves operations. The cto talks about the delivery app in which customers can track the delivery truck in real time. ‘That feature is used by about half of our customers.’ ‘They are already at the door when our delivery driver arrives and have often already collected the shopping bags that are going back and the deposit bottles. So that addition of tracking the delivery driver makes delivery more efficient.
The company is also implementing analysis in an app that tracks driver behavior: the Runner app monitors the speed and braking and steering of the delivery driver. If that delivery driver scores below a desired limit, they can receive tips to improve their driving style via the Driving Coach. Delivery drivers also have access to the Service app, which gives them customer information for each delivery address and lets them know whether there was anything wrong with the groceries or the delivery time during the previous delivery. Gebler: “Customers appreciate it when the delivery driver gets back to them on that.
The company, which has largely automated the collection of groceries since this summer in a brand new fulfillment center in Utrecht, also sees opportunities for greening. Gebler: “Our electric cars always drove back empty, but we also have a return service. For example, delivery drivers accept returned products from Wehkamp customers. Then the car doesn’t have to drive around empty.
- Picnic’s cto shares five lessons for companies looking to innovate and grow through the fusion of tech and business:
- Dream big and start small;
- Focus on the goal and use data to support that mission;
- Data-sience comes first, then ai;
- Launch the product first and then try to scale up;
Successful products come from small teams.