Picinc is an online grocery shopping app that was launched last year. The company aims to disrupt the egrocery industry, which is largely domintated by Albert Heijn. This industry generated an annual revenue of €450 million and grew by 55% last year. Impressive numbers, to say the least. As of know, Picnic is online in six cities, including Utrecht and Almere. Should their competitors start worrying about this newcomer or is the country not ready yet to fully embrace online grocery shopping?
Let’s take a look at Picnic’s business model. The company offers all kinds of groceries on its online platform and claims to be the cheapest player in the industry, despite free home delivery. In order to achieve this, Picnic minimizes its costs by not having any physical supermarktets and using only one distribution centre in Nijkerk. Picnic only orders the products once the customers have actually bought them online, thereby preventing costly inventory. The company then uses electric vans to deliver the orders to its customers at a time that is convenient for them. Simultaneously, and this is also one of its main selling points, the food is very fresh because it spends no more than one day in the supply chain of Picnic.
On the other hand, Picnic is also dedicated to (benefiting from) the customer experience. The app suggests previously ordered products to customers, enables them to schedule standard deliveries a few times a week and provides real-time delivery updates. If something goes wrong, the customer is always right and will be compensated for it. The data that customers produce while shopping, can be used by Picnic to improve its product line and attract more customers to its app.
However, Picnic has a relatively small product range compared to its large competitors, while 53% of consumers actually value a larger product range when they pick a supermarket. Therefore, Picnic is not yet causing trouble for companies like Albert Heijn and Jumbo, but its app seems to be where the future of shopping is going. I would say that we give Picnic a few years to establish itself all over the country and then we will see whether the company ends up being a threat to the current market leaders.
