Online delivery of food and beverages is growing in Germany and with it the number of impressive start-ups with innovative business models. flaschenpost was founded in Munster in 2016, now boasts 8,000 employees and delivers more than 500,000 crates per week. We talk to Christopher Huesmann, Chief Marketing Officer at flaschenpost, about how they achieved these incredible figures in just 4 years.
How would you describe flaschenpost’s unique offer?
We are an online drinks delivery company, and it is our service which sets us apart. We promise to deliver the customer’s drinks order within 120 minutes, taking away and refunding the customer’s deposit on their returnable bottles and without charging them for delivery. Our core offer is drinks because these are the most heavy and bulky to transport when you go to the supermarket and we want to ease that burden on people; but we now also offer complementary products like snacks and chips, coffee and milk for offices, hygiene products and even Christmas trees at Christmas time.
The service is relevant for everybody. Our customers range from students that perhaps don’t have a car to pensioners who maybe don’t like driving, plus families who would rather spend the weekend with their families rather than standing in front of the bottle return machine! Our flexible delivery means that we take the need to plan off our customer’s shoulders. They can order the drinks they want as and when they need them.
How exactly does the flaschenpost model work?
We have a very strong IT and logistics focus. We have built an in-house ERP (Enterprise Resource Planning) system that integrates online ordering through our website and app with our logistics, journey planning and billing systems. Because everything we do is integrated, we can tell our customers when the drinks have been packed and loaded into the vans and correctly estimate when the drinks will arrive. We even deduct the bottle deposits from the customer’s final bill right at our customers doorstep.
Your CEO has already explained that as soon as flaschenpost has won a customer, you see a "subscription-like behaviour". What exactly does that mean and how did you achieve that?
The subscription-like behaviour means that on average our customers order from us more than once a month. The fact is, drinks eventually run out. We offer an excellent service, so when the bottles are empty, the customer simply returns for another order. We see customers integrating us into their weekly routines, putting the order in at the same time each week or fortnight. We find that we don’t have to put resources into additional marketing activity for our existing customers.
That sounds good from a resource perspective. How do you win new customers?
Organic word of mouth marketing is extremely important for us. We strive for operational excellence which keeps our existing customers happy, which means that these customers promote us via word-of-mouth. We have an NPS (Net Promoter Score) which regularly exceeds 80 or 90. It helps of course that flaschenpost is a great brand and people like to identify themselves with it. Drinks are very emotional products and people connect them with positive experiences. Drinks remind you of happy times: when you come back from sport and you are full of endorphins, when you go to a party with friends.
What would be your top tips for start-ups with similar business models launching in new cities?
Be courageous, both financially and creatively. Because we have an extremely broad target group, essentially anyone between 16 years to over 80 who can use a website or phone app, it is important to generate maximum volume and reach at the start. That means out-of-home campaigns, display and also TV. This creates a basis from which word-of-mouth and searches can grow.
That being said, it is important to apply this broad strategy intelligently. Broad does not equal scattered. For example, when we launched in our second location in Cologne, we learned from our first location (Munster) to not invest in advertising billboards on the long-distance platforms at the train station, but on the regional and underground platforms instead. This meant we would reach people who lived in Cologne and, because it was public transport, people who perhaps didn’t have a car.
That means you also invest in search and social media?
That’s right. In fact when we started our second location in Cologne we launched a social post to announce we were there. We found that many of our customers from Munster – where we had launched previously – excitedly tagged their friends under the picture saying how much flaschenpost had made their lives easier. It is exactly this kind of activity you have to encourage. Keep your existing customer community engaged and give them the tools to spread the word.
How do you manage to keep your prices equal (or not much higher) than in the supermarket?
We have a very streamlined service. Düsseldorf and Neuss areas are good examples. To service this entire area with supermarkets you would need dozens of supermarkets, but we service both areas from one warehouse. This is combined with the fact that in areas like this we also have an extremely high order density with 2,000 to 3,000 orders per day. This means our delivery drivers only end up driving a few hundred metres between customers. We are extremely efficient, much more efficient than if the customer went to pick up their drinks themselves.
There has been a lot of talk about Amazon becoming part of the critical infrastructure during the pandemic. Is it your goal that flaschenpost becomes as important in people's lives and, if so, how do you intend to achieve this?
First and foremost, our goal is to make people’s lives easier. We now get over 500,000 orders per month, so we are already an essential part of people’s lives and that comes with a certain responsibility to guarantee supply. When the pandemic reached Europe our first priority was obviously to ensure the safety of our employees and customers. Because the pandemic led to increased demand, the next step was to ensure we could meet that demand so that nobody who might be in higher risk groups had to leave their home in such times. We increased our maximum delivery time by one hour to 180 minutes for the two weeks at the start of the pandemic, which allowed us to increase our capacity and ensure the beverage supply for everyone. Because we informed our customers of this before they ordered they were very understanding. In these situations it is vital to be open, honest and upfront with your customers.
The future looks very bright for flaschenpost. How do you plan to grow in the coming years?
There are many ways for us to expand. Internationalisation is an exciting subject but there is still vast growth potential in Germany too. To enable us to cover Germany completely, we will operate 40-50 warehouses – we currently have 23. We also have plans to expand our range of products. At the end of the day we have built an infrastructure which doesn’t just enable us to deliver drinks; we have shown with our Christmas trees that we can deliver almost anything! One thing we do know however is that expansion will happen one step at a time.