I originally posted this on my blog LogisticsMatter.com, but figured this might be interesting to share here as well:
Albert Heijn’s Online Customers can drop by a Pick Up Point to get their ordered groceries
Albert Heijn, the largest grocery chain in the Netherlands, premiered a new service on November 1st: the Pick Up Point, where consumers pick up groceries ordered online at a scheduled time and pick up point. As the service is only available in a small town near Amsterdam at this time, the choice for pick up point is easy.
Albert Heijn has a history of innovating the shopping experience for their customers. A few of the highlights:
- In 1952 they were the first grocery store in the Netherlands to let customers move around the store with basket and carts to pick their own groceries. Big logistics improvement, as the shop personnel used to be the only one moving around collecting the orders.
- In 1994 Albert Heijn introduces an new concept for supplying their stores: Today for Tomorrow. Shops get supplies within 18 hours after ordering, significantly improving product availability for consumers.
- In 2002 Albert Heijn started the Albert.nl service, with which customers could order their groceries online and have them delivered to their kitchen. The to the kitchen part is a distinction which I personally really like. Usually anything you order online is brought to your doorstep, so this being groceries I love the fact that they offer bringing it to your kitchen.
- In 2006 they started with self scanning, equipping customers with scanning devices, so they could scan their own groceries, paying at a checkout point with random checks. Result was shorter lines at the regular cashiers lines.
- In 2010 they made another great logistics improvement: walking routes! Customers can create their shopping lists online and select their supermarket location. The website will then create the shopping list in store order. As a warehousing nut I love this: real life order pick optimization. How cool is that!
- November 1st 2012 they started with the first pick up point. Watch the movie below to see how this works. It’s in Dutch but language is no issue. Just see what happens (and enjoy Stevie Wonder singing Signed Sealed Delivered…:
You can view the video here
In words: Costumer orders groceries online and enters desired pick up time. Albert Heijn sends you a text reminding you that you need to pick up your order at the pick up point. The pick up point is not a store, but a dedicated pick up point specifically located and designed for that purpose. Most important in this set up is limiting waiting time. If this is too long people will decide to have their groceries delivered or go to a store and do it themselves.
What Albert Heijn does in this setup is optimizing picking. It costs less to have a warehouse operator pick an order and put it in crates ready to place in the boot of a customers car, than having people pick orders for stores. Stores have to put in on shelves, and then customers have to pick it off the shelves (additional handling), after which they have to put it on the conveyor at the cashier (additional handling), where the cashier scans everything (additional handling), the customer pays, and packs it all in bags or boxes (additional handling). Talk bout eliminating waste!*
*Lean Comment (Waste)
To give credit where credit is due: Albert Heijn is not the first retailer to try this concept in the Netherlands. A few retailers with a more regional setup are already operating similar pick up concepts, such as Deka, Boni and Coop. The difference between the concepts of these regional operators and Albert Heijn is that the Albert Heijn pick up point is dedicated. I have no details about how the regional retailers are operating their pick point, but looking at the websites I get the impression that they are based at stores. The main benefits of the Albert Heijn model is that the pick up station is not a store, so people picking up their groceries are not disturbing “regular” shoppers, picking is not done in the store (disturbing regular shopping), and people are not parking at regular stores.
To me this concept sounds like the perfect setup. I don’t have to go through the store, being distracted by all the products I don’t actually want or need. I don’t have to stand in line at check out. I don’t have to be home to wait for my delivery, depending on a time slot which usually is several hours.
A few things Albert Heijn needs to take into account: Cost – this service is currently available to try out for free, which suggest that in the future a fee may be charged. Should be cheaper than having groceries delivered. Waiting time – this should be very limited. Just an idea: most people have smartphones (especially the ones ordering groceries online), so maybe linking an app to this service could speed up the pick up process. Customers could let Albert Heijn now they are on the way ( could be automated if linked to GPS positioning), so orders can be staged in advance.
As soon as this comes to Rotterdam, I will be among the first to try this!