Like a "real-time strategy game" • 13.06.2018

Beverage retail market: revolutionary route planning crowned by success

Flaschenpost – successful two-hour delivery service

The German online retail business Flaschenpost (a pun meaning “message in a bottle” or quite literally “bottle delivery” in English) successfully delivers beverages within two hours in Münster and Cologne, with more cities to follow in the near future. The concept is based on optimized logistics planning services, assisted by state-of-the-art technology.

 ”We aim to be better than Amazon or REWE," announced Niklas Plath, COO of Flaschenpost GmbH, at the HIS conference in Münster, where the company, which launched its online beverage store in 2014, showcased its concept. How does the startup plan to do that? By expanding the business and providing dependable delivery service.

While other companies are increasingly struggling with customer services requests such as same-day delivery because they lack the necessary logistics capabilities, this small business seems to be able to keep its promise to deliver within 120 minutes.

“Our small company in Cologne orders beverages from Flaschenpost. So far, this has always worked and delivery stayed right within the time frame, " says client Vera Stetig and adds that “they also pick up our empty bottles and the prices are perfectly acceptable.” Previous orders made at REWE have not always been quite so successful.

"An intelligent route planning algorithm is at the core of our business model" (Flaschenpost)

In 2018 the company expands to the German cities Mannheim, Heidelberg,...
In 2018 the company expands to the German cities Mannheim, Heidelberg, Ludwigshafen und Düsseldorf. left: Gero Hippke, Head of Expansion; right: Christopher Huesmann, Chief Revenue Officer at Flaschenpost
Source: Mörs/iXtenso

The team from Münster started in 2014 and quickly added 30,000 customers within its first three months of operation. After a short break, they returned with a new warehouse, logistics concept and the implementation of a route planning algorithm. Now the company delivers nearly 50,000 cases per week, doesn’t charge a fee for delivery and requires a minimum order value of about ten euros. Bottle deposit fees are directly deducted from the invoice total. Payments can be made via PayPal or direct debit.

The software behind the success: All internally developed

The Flaschenpost example highlights a trend that more and more companies are taking up. They no longer use mainstream commercial software that’s ready-made, but move in the opposite direction: both the algorithm and software for the handheld devices for the drivers are "homemade" and tailored to the specific needs of the company. This ensures a successful digital supply chain implementation.

The algorithm behind the route planning calculates the best delivery route. It combines and coordinates the incoming orders throughout the entire city. Within two hours, the order is validated, the ordered product is picked in the warehouse and then loaded onto the vehicle, driven to the customer and delivered at his/her doorstep.

Drivers save time since the system calculates the best route – while also factoring in whether the delivery window of a specific order is too narrow. "What’s more, optimized route planning also helps save the environment," says Christopher Huesmann, Chief Revenue Officer at Flaschenpost.

The speakers add that the entire concept is far more cost-efficient than brick-and-mortar beverage stores. One of the many reasons for this is that the warehouses are close to the city and there is no need for intermediate storage and movement of goods.

How digitization makes route planning more efficient

At the "headquarters" in Münster, four large digital screens display the routes and current operations in real-time. "It reminds you of a real-time strategy game," says Huesmann with a grin. This brings everyone up to speed and allows them to immediately respond to unique settings.

Having said that, things aren’t always as easy as the system with the algorithm makes it sound. As is the case with other retail settings, many factors play a role in cost/benefit considerations – such as delivery driver availability and varying order volumes, which in turn depends on weather conditions, holidays, events, marketing etc. The intelligent system is in a continuous learning loop.

Dependability trumps order size/quantity

The company believes it is more important to keep its delivery promises than to receive as many orders as possible. "Needless to say, this type of concept is only feasible with a large number of orders," says Huesmann, "but we reserve the right to occasionally close the online store when we realize that we would no longer be able to deliver the requested number of products. After all, we only have a certain number of drivers at our disposal and close shop at 10 p.m.” It would be far worse for our customer relationships to not be able to deliver the merchandise as promised. "Of course, we don’t want to be forced to close our online store in the future. That’s something we are currently working on."

Author: Natascha Mörs; iXtenso - Magazine for Retailers

related articles:

popular articles:

Thumbnail-Photo: eBay to launch end-to-end fulfillment service for sellers...
15.08.2019   #services #logistics

eBay to launch end-to-end fulfillment service for sellers

Storing and shipping through logistics partners managed by eBay

eBay is introducing Managed Delivery, a cost-effective fulfillment service to launch next year, beginning in the U.S., that will provide shoppers faster and more reliable delivery on millions of popular products. The initiative will enable sellers ...

Thumbnail-Photo: Walmart begins pilot with autonomous vehicle company Gatik...
08.08.2019   #logistics #delivery

Walmart begins pilot with autonomous vehicle company Gatik

Self-driving cars for customer delivery and transporting goods between stores

Walmart announced a new pilot with autonomous vehicle company Gatik. The company has been exploring a few pilot projects with self-driving car companies that include both customer delivery as well as transporting goods between locations.Tom Ward, ...

Thumbnail-Photo: “Worldwide shipping: I need it - now!“
24.06.2019   #e-commerce #logistic solutions

“Worldwide shipping: I need it - now!“

Helping eCommerce businesses succeed through international shipping

Micha Augstein, CEO and founder of shipping service provider PARCEL.ONE GmbH is on a mission. He wants to revolutionize online retail with his innovative logistics approach and support online retailers.How does he do it? Retailers simply send their ...

Thumbnail-Photo: UPS applies for certification to operate drone delivery unit...
05.08.2019   #logistics #delivery

UPS applies for certification to operate drone delivery unit

Subsidiary will develop and operate unmanned aerial systems

UPS said it has applied to the U.S. Federal Aviation Administration (FAA) for Part 135 certification to operate commercial drone flights in the UPS® network under a subsidiary business called UPS Flight Forward, Inc.The new subsidiary is a ...

Thumbnail-Photo: Today’s supply chain threats: tariffs, terrorists and tsunamis...
16.07.2019   #security #supply chain management (SCM)

Today’s supply chain threats: tariffs, terrorists and tsunamis

Agile strategies required to combat potential supply chain disruptions

The recent increases – and threat of increases – in tariffs are causing disruptions to today’s retail supply chains. According to a new report from BRP: ‘Tariffs, Terrorists & Tsunamis: Minimize the Impact of Supply Chain ...

Thumbnail-Photo: Start-up offering consumers free same-day delivery...
09.07.2019   #customer satisfaction #logistics

Start-up offering consumers free same-day delivery

New online service for online shopping convenience with no membership fees

A new e-commerce company called Waybuy is changing the way consumers shop online, combining the best in convenience and affordability to make it easier than ever to get the products shoppers need.Founded by Houston-area married couple, Ann and Erik ...

Thumbnail-Photo: Retail imports surging ahead of more tariffs...
16.09.2019   #retail #data warehouse management

Retail imports surging ahead of more tariffs

Imports at major retail container ports in the US reached unusually high numbers

Imports are expected to surge again before another round of tariffs takes effect in December, according to the monthly Global Port Tracker report released by the National Retail Federation and Hackett Associates.“Retailers are still trying to ...

Thumbnail-Photo: TÜV SÜD: Certification for the Cartonplast Group...
10.10.2019   #logistic solutions #packaging

TÜV SÜD: Certification for the Cartonplast Group

French location of the company in Dagneux complies with international standards

On 3rd October 2019 Cartonplast France successfully completed the certification audits by TÜV SÜD Management Service GmbH according to ISO 22000 and ISO 9001. Cartonplast (CPL), the leading European supplier of reusable plastic layer pads ...

Thumbnail-Photo: Blockchain traceability in olive oil supply chain...
03.07.2019   #supply chain management (SCM) #monitoring software

Blockchain traceability in olive oil supply chain

Blocksyte and Caroli share results of monitoring application

Blocksyte, a SaaS-based blockchain supply chain application company focused on the food industry supply chain, and Caroli, producer of extra virgin olive oil, announced the successful introduction of end-to-end blockchain traceability into the olive ...

Thumbnail-Photo: Thyssenkrupp presents artificial intelligence alfred”...
19.07.2019   #data management #digitization

Thyssenkrupp presents artificial intelligence "alfred”

AI as an essential component of the holistic digitalization strategy

Thyssenkrupp Materials Services continues to drive digital transformation: Since early 2019 an artificial intelligence solution (AI), supported by Microsoft’s cloud platform Azure, has been integrated into the processes of the largest ...