Next month, Dutch online-only supermarket Pickit will expand a pilot program in Dusseldorf, with plans to expand across North Rhine-Westphalia. Pickit’s expansion plans highlight the gap between German consumers’ e-commerce habits and native retailers’ capabilities.
Launched in 2015, Pickit operates in 30 cities in the Netherlands. The company delivers groceries for free for order values above €25, a much lower threshold than the comparable online grocery delivery threshold for UK giants Tesco and Ocado. Pickit operates a vertical distribution model, owning its own fleet of cars to reduce delivery costs.
Only two German grocery chains rank as Gifted in L2’s Digital IQ Index: Retail Europe. One of them, Lidl, recently announced plans to shutter its e-commerce platform, citing the lack of a path to future profitability. Kaufland, ranked as Average, did the same.
While local supermarkets can’t stomach the costs of e-commerce expansion, others are filling the gap. Pickit raised €100 million to fund its expansion, while DHL-backed AllYouNeed Fresh is attempting to compete as a local player. Amazon, the largest online retailer in Germany, is also getting in the game, expanding Amazon Fresh from Berlin and Potsdam to Hamburg and Munich. As e-commerce natives fill the gaps left by local retailers, it becomes harder and more expensive for brick-and-mortar retailers to develop digital and logistic capabilities to catch up.