Picnic: the modern milkman transforming urban distribution
The Netherlands is home to one of the fastest-growing e-commerce markets in Europe, estimated to reach a turnover of 36 billion euros by 2021. Consumers increasingly depend on buying online, and this is not restricted to electronics and clothing. More than 1 in 6 Dutch people do their grocery shopping online, reflected by the high density of Dutch supermarkets setting up online stores.
But while e-commerce and online groceries continue to grow, retailers have not developed effective urban distribution to match demand. Inefficient strategies result in cities becoming flooded with multiple delivery vans from the same company, causing traffic congestion and increasing greenhouse gas emissions. In addition, the service that consumers receive is unreliable and people often wait hours for a delivery to arrive.
As customers look for a better service, more convenient home delivery and on-time arrival, the stage is set for a radical improvement in urban delivery.
Picnic is revolutionising urban distribution
With a fleet of electric vehicles (ePVs) designed to deliver in the urban setting — they don’t create dirty emissions and due to their small size they never block streets — and a friendly team of Runners, our customers enjoy groceries at a low price as well as free delivery to the doorstep.
By selecting a 20-minute delivery window, there’s no more waiting for groceries, and as 95% of Picnic’s orders arrive on time, people trust us to be punctual. On top of that, an evolving algorithmic model plans distribution so that ePVs only visit a street once and sufficient time is scheduled for a customer-friendly service.
Picnic’s traditional approach combined with modern technology has been well-received: in just three years, our service has grown from delivering in Amersfoort to over 60 locations across the Netherlands and Germany, and each day new customers join. With an ever-expanding consumer base, we use smart planning and innovative tech to ensure that everyone is able to buy high-quality groceries and receive on time, free delivery.
Innovation supporting the modern milkman
Distribution logistics are difficult and not easy to get right. Most famously, the Travelling Salesman Problem describes the dilemma of how a salesman tries to efficiently use his time to drive to a maximum number of cities, give sales pitches and, hopefully, sell products.
Picnic has developed a new solution to this well-known problem. A team of software developers and data scientists have crafted an in-house distribution model to find optimal routes for thousands of deliveries at the same time as minimising vehicle usage. Otherwise known as the Vehicle Routing Problem with Time Windows (VRPTW), this cuts the time our Runners spend driving to delivery locations and allows for highly efficient fleet management. Moreover, the distribution model ensures that we only visit the same street once a day.
By using a combination of advanced AI techniques with cloud-based computing, Picnic’s distribution model processes millions of data points in just milliseconds. As our customer base is ever-expanding, the distribution model is scaled across an increasing number of delivery locations. We continuously evaluate this multi-factor optimisation to ensure that on-time delivery is not just theoretical but succeeds on a day-to-day basis.
The work of Picnic’s team has been so effective, that Picnic’s distribution model has been — according to both the Solomon benchmark and the Gehring & Homberger benchmark — tested to be the most efficient in the world.
However, a world-class distribution model is not enough on its own. We also require Picnic’s electric hero: the ePV.
The ePV: cute and suited to the urban environment
A well-designed delivery vehicle is critical to a short drop time. Most delivery companies have too many requirements, they want vehicles that can drive long distances at high speeds as well as deliver in cities. Ideally, on the outskirts of a city, a delivery vehicle would become smaller, shed the ability to travel long distances and switch from diesel to electric. This would make them better adapted to the urban environment, making deliveries more efficient, while keeping cities clean.
As our distribution centres are located almost within the areas they deliver, Picnic’s ePVs are not constrained by having to travel at high speeds or long distances, so the fleet is fully adapted to the urban environment.
The ePVs are small, and Runners are able to park neatly next to each house. Groceries are easy to find and unload: each Runner has a device to quickly identify the correct crates. There’s no squinting in the dark or fiddling with a flashlight to find the right deliveries. This saves minutes, allowing Runners to carry groceries into a customer’s kitchen, better explain the concept of Picnic and collect any plastic bottles and bags for recycling.
Boodschappenradar: on the minute arrival
Within the Picnic app, the selection of delivery time is oriented to the user. After a Picnic customer places an order, they first select an hour delivery window. Let’s say, between 1500 and 1600 on Tuesday, or 1800 and 1900 on Friday. Once the delivery route is planned, this time-window is reduced to twenty minutes, 1840–1900.
In addition to a short delivery window, customers know to the minute when we arrive.
The Runner’s location is given in a Picnic-app feature, the ‘boodschappenradar’. Thanks to this, people are ready waiting for our Runners, making deliveries even quicker.
Pioneering urban logistics and keeping customers happy
The all-star team of software developers and data scientists, combined with innovative technology and a well-designed ePV, makes Picnic’s radically new distribution model a reality. Each delivery leads to greater improvement, and as our method is scalable, we continuously roll-out a punctual and first-class service to a fast-growing customer base.
In the future, we will make further improvements to our distribution. With advancing technologies, such as vehicle automation, there will be new ways to increase efficiency and cut time spent on the road. Additional enhancement to ePV design would make it easier for Runners to identify the correct groceries per delivery location, thus reducing individual drop time and improving overall efficiency. By better understanding the characteristics of each delivery location, our team can plan extra time to allow a Runner to climb eight floors of stairs and deliver groceries to the doorstep.
In the meantime, with innovative technology and smart planning, Picnic works towards keeping customers happy while paving the way for logistics and urban delivery.