Percentage of income
Before selecting a fixed percentage per product, let's first see how competitors are doing. For this, we looked at Thuisbezorgd, Ubereats and Deliveroo.
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Costs are based on the following sources: Trouw, FNV, Cashdesk and Volkskrant.
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Thuisbezorgd: €0.19 (administration costs) + 13% per order excluding delivery. Including delivery, this is around 30%.
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UberEats: 13% per order excluding delivery, 30% including delivery.
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Deliveroo: Similar to those of Thuisbezorgd and UberEats, exact figures are unknown to us. Deliveroo indicated that these costs vary by region.
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This image represents the percentages of Thuisbezorgd. 12% is a client orders via Thuisbezorgd, and another 13% for if they have to deliver it.
According to the cost calculations in the chapter below, 25% is needed to make profit throughout the year. But taking 25% from the sale price is quite high. Therefore, we will ask 15% from the sale price of a product and add 10% to the original price. In that way, we still earn 25%, and the farmers only need to put 15% apart.
This image represents our percentage monetary model.
Cost Estimations
In order to get a clear overview of how many customers we need per selling spot, we made an excel document consisting of indirect costs, variables and labour costs.
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Please download the non-editable excel file here. A short summary is given below:
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With the estimated planning of having 20 spots per week, the netto selling time will be 100 minutes per spot. When estimating that a consumer spends 20 euros on average per visit, and taken into account that we will earn 5 euros per consumer (25%, based on 10% + 15%), then we will need one consumer per 4.9 minutes. Since we estimated the indirect costs relatively high, and the price per consumer relatively low, then this will be a feasible formula. In summer days, there will relatively be more people than during winter days due to the weather, so the average will still be feasible.
Pre-order reservation
Based on the midterms, we looked into whether people would like to have products reserved for pick up, or that they want to have ‘on the spot shopping’ only. Before the midterm, we only had the option of shopping on the spot, since this was a conclusion from one of the expert meetings, however, not all people seemed to prefer it. Therefore, we took a survey, with a small amount of questions. We needed to have answered two questions actually:
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Do people like to reserve products for pick up?
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If yes, what percentage of products on stock should be reserved for pickup?
Pre-shopping grocery list
With 4 respondents saying they always made a grocery list and 11 saying they often make a grocery list, it can be said that there are the prerequisites needed for people to reserve specific items before going to the grocery store. The prerequisite being the advanced knowledge of what exactly the customer wants to buy once they reach the store.
Likelihood to pre-order:
75.2% of respondents say they would make use of the pre-order option if it were available, indicating a majority of consumers would likely make use of the feature, making it an important value proposition.
Supplementing the reserved shopping:
Of those who indicated interest in the pre-order feature, 90.9% said they would also like to supplement their reserved shopping with other options at the van itself, a further 9.1% said they might be interested. This indicates that it is important to ensure a large percentage of the product is kept as non-reservable.
Planned vs Impulse purchases:
Overall respondents seemed to have little preference between the two shopping methods, however it should be noted that 5 respondents fell on the “buy what i need” side compared to only 3 on the “shop spontaneously” side.
This data shows that it is important for us to balance the amount of preorder and impulse buy stock.
Conclusion
Given the overwhelming willingness to use a pre-order feature, we estimated that at least 40-50% of stock should be pre order. However, we believe there should be space for an increased/decreased percentage for different products down the line as analytical data from the app tells us which products are more popular with the pre-order feature.
How will this be implemented? In the app, you are able to see the storage for the day after or same day and you will get the option to reserve these products for one of the locations on that day. In the evening of every day, the storage will be updated with the newest food. On Monday and Thursday, this will be in the morning.
