Picnic co-founder Michiel Muller talks about a modern rethink of the "Milkman" as a business strategy, a logistics overhaul and expanding in Germany in the OMR Podcast
We’ve all been there, were there last week and will probably be there next week: the supermarket. One of the weekly TO-DOs that elicits excitement at the notion of having a full fridge and annoyance at having to spend time shopping in equal measure. Picnic is betting on leveraging the latter to get more people on board to have their groceries delivered. Michiel Muller is co-founder of Dutch online supermarket startup and joined OMR founder and CEO Philipp Westermeyer in the OMR Podcast to discuss what factors motivate people to order groceries online, why having top customer service is essential and how Picnic aims to be a modern version of the local milkman.
“The way we deliver groceries makes it possible for everyone to do online groceries,” Michiel Muller tells OMR CEO Philipp Westermeyer in the OMR Podcast. Before it was a premium product synonymous with high delivery costs and wait times that made the product “unsexy.” We went from a premium market to a mass market and so many people began taking advantage of our offering, which leads to traction and brand recognition and then you’re off.” “We developed a model where we have all of your groceries for the lowest price free to your door.” And an environmentally-friendly option at that—more on that later.
The return of the milkman
When asked about what Picnic would do differently than some of its competitors in terms of logistics, Muller has a simple answer: The company draws inspiration from the milkman of yesteryear. While other companies have to be extremely flexible when it comes to delivery times (which means running the risk of the delivery truck having to deliver to the same street on multiple occasions per day), Picnic employs set delivery times per street in each city it services. Meaning that if there are several deliveries planned for the same street or neighborhood, they are all carried out in one go, which has a massive impact on efficiency. “We are sort of a bus,” says Muller. “We always stop at the same time and place.” Just like a milkman coming to your door once a day, augmented through the right technologies that combine the two worlds.
The company hopes to build off of local attention and relevance: “Picnic is for everybody. You do not have to live in a big city. It’s for the smaller towns. We are not a massive American company—something that customers have taken a liking to. Picnic hopes to increase its profile and awareness through a combination of online ads (including Google Ads, Facebook, members recruiting new members, etc.), word-of-mouth recommendations from happy customers, local PR and, of course, a fleet of branded eAutos that can hardly be overlooked.
Going from delivery service to love brand
Having set delivery times based on where you live is one thing, but how to dispatch them to where they need to go? To address this question, Picnic has built its own fleet of eAutos, which are especially small, lend themselves to quick and convenient delivery and thus increase time savings. Their compactness also helps drivers find and allocate deliveries quickly and efficiently. However, should a delivery be incomplete or a customer be unhappy with what they ordered, Picnic has a solution that addresses such issues quickly: Customers can quickly pull up their orders in the app, adjust them or make a complaint.
To make a good impression at launch, Picnic came up with the “waiting fun” concept, which tides customers over until the arrival of the next order (if it’s taking longer than usual). This includes an array of products that can be added to the shopping cart that are free of charge—including bananas, milk and other small-ticket items. Furthermore, customers can create family accounts with the Picnic app, which let several people edit the same shopping cart and thus promotes a modern form of “family shopping.” One thing that jumps out at you when visiting the Picnic website is that no orders can be placed through the site. Muller told Philipp Westermeyer that it was a conscious decision to offer the product exclusively through the app, so that customers can access their shopping cart at any time, from anywhere.
To find out how the company hopes to expand further in Europe, why OMR CEO Philipp Westermeyer thinks it will be valued at EUR 10b in the next decade and why else you should be keeping an eye on Picnic, check out the latest episode of the OMR Podcast right now!
The OMR Podcast with Michiel Muller at a glance:
- Michiel Muller on the concept behind Picnic and the shift from a premium market to a mass market
- What the founders did before creating Picnic and how the idea for Picnic came about
- How the company’s core logistics differ from its competitors and what role the “milkman” strategy plays
- Where the company sources its products
- Why Picnic decided on the region of North Rhine-Westphalia for its start in Germany
- What the company has planned for the coming months
- Why Picnic deploys electric cars and manufactures them in-house
- What the revenue structure is, how much Picnic has in Germany and how important are growth and profitability at the moment
- On Picnic’s vision and user loyalty
- On the point at which a so-called “City Hub” is worth having, by the number of households, active users, etc.
- On the company’s growth strategy and the impact the corona crisis has had
- Why Picnic has had so much success with its waiting list
- How the company generates awareness—and leverages it to acquire new customers
- Why Picnic is so focused on local awareness and relevance
- How it decided on the name Picnic, which gimmicks the company has in store and why it’s focussed on developing further each day
- Muller on his previous career stops and the motivation for Picnic
- Which competitors figure to be the biggest moving forward and what are Muller’s impressions of Amazon (Fresh)
- What is essential when it comes to customer retention and why order number 6 is decisive
- On Picnic’s launch in Germany and its fast, user-friendly customer service
- Why Picnic consciously decided against having a website through which purchases could be made
- Who the investors are and how the company is currently set up
- On whether or not Picnic could go public in the future