Delivery: The green kind of efficiency
Shopping for groceries online with Jumbo is easy. In the Jumbo app or on our website, our customers fill up their shopping basket, pick a date and delivery period and wait for their delivery. These simple actions set in motion a complex logistic process in which Technology plays a vital role. In the early days of e-commerce, a nearby Jumbo supermarket would get the order, receive the necessary goods from one of our distribution centers and deliver those to the customer.
Nowadays, we supply our customers directly from Hubs across the Netherlands. The number of kilometers our drivers make quickly add up. To reduce our Co2 footprint and to help keep our home delivery service affordable for our customers, we focus strongly on efficiency. Frank Gerritsen is Product Lead Ordering, Shopping and Last Mile. That ‘last mile’ is what this story is about. Frank tells us all about the possible gains of optimizing that final part of the grocery-shopping-journey: the last mile. Or, to stick to our metric system: the last kilometer.
Delivering smarter
Grocery delivery is not a core activity for a supermarket. It requires time, effort, and considerable investments to integrate it into an organization. Even one that already deals with complex logistics. It is a service we provide. One that has become an integral part of what Jumbo stands for in the eyes of our consumers. So, before we change anything, we think it through carefully. The changes must result in tangible improvements. For our customers, for Jumbo and for the environment.
In this case all three boxes were ticked. Frank: “By making the delivery system smarter, we can keep the cost of having your groceries delivered as low as possible. Jumbo benefits from more control over planning and logistics, amongst other advantages. But most importantly: less kilometers driven means less Co2. That’s a win-win-win situation.
The evolution of planning
Previously, customers could choose a delivery period up until three weeks in advance. “These were fixed slots”, Frank explains, “Once they were booked, that was it. Our flexibility was very limited. And so was our efficiency.” Now, Hubs have taken over from local stores as distribution points. That provides us with more control over the process and more opportunities to make it smarter.
Jumbo develops its own software that generaes a real-time calendar that takes several internal and external constraints into account and is tailored to the customers. This gives Jumbo a lot of flexibility and a gain in efficiency.
Flexible pricing and ‘nudging’
The price customers pay for delivering is flexible. It is calculated based on several aspects like length of the delivery window, promotions and if customers have a Bezorgeloos subscription. Frank and his team came up with a few ways to seduce customers to choose a specific delivery period that would make delivery more efficient. Frank: “You could raise the price. But, if you were to truly want to make up for the additional kilometers driven, cost of personal, etc. you would have to charge higher delivery fees. And that would chase customers away, which clearly doesn’t fit Jumbo’s proposition.
But there was another way, besides pricing, to reach the desired outcome: psychology. Frank: “Based on customer feedback and data analysis we noticed that customers were asking question about the frequency of our vans driving to their neighborhoods. Customers were worried about the impact on the environment. That gave us an idea. We started ‘nudging’ them towards delivery periods in which more people in their neighborhood want their groceries delivered. That way, they themselves have a direct impact on how often we would have to drive out to them.”
More flexibility
“The nudging worked”, Frank continues, “We were able to start clustering deliveries. But we wanted to give ourselves more flexibility to plan smart. So, we arranged our delivery periods in a way that customers would pay less if we had more freedom to plan. For example: delivery periods between 10:00 and 16:00 would be cheaper than between 10:00 to 12:00.”
Frank is convinced the future will bring more improvements. “Currently, we have no idea when customers will order with us. If we can make better predictions, it would help us in reaching our objectives.” According to Frank “We must continuously optimize our delivery proposition. It’s just a matter of time before local and national governments will restrict transportation within city limits even more. Even when that transport is done using electric vehicles.”
A prime example of teamwork
According to Frank “what we do, can only be done through real cooperation. We meet on regular base with our broad group of stakeholders to understand the challenges they are facing and to determine if software is a solution to the problems. The outcome is fuel for our Now Next Later roadmap.
From gaming to groceries
Frank started at the Jumbo Tech Campus in 2017. Before that he worked for a company that developed online games. He describes himself as “more of a startup person, less of a manager”. After some time, he felt the need for something new. He wanted to experience the retail world and Jumbo caught his attention. Here, he makes the most of his startup mindset. He went from product owner for the Order Domain to product owner for the Foodcoach app to his current role.
Frank: “There’s plenty to do here and plenty of opportunities. What you won’t find, however, is someone holding your hand. So, when you see a change, take it. And make it work.
You want to make it work at Jumbo Tech Campus? Check out our open positions!