Supermarket plastic bags and credit cards
Since October 1st 2015, in England, supermarkets are not allowed to give away plastic carrier bags. They make a charge of 5 pence (about 4 US cents) for each bag. Up to that date, shoppers could take away a free bag in most of the larger chains of supermarkets. There are some exceptions to this law, and smaller shops are allowed to give away a free bag, but very few do. A few days ago, a news item recorded that one company making plastic bags for supermarkets had been forced to close, leading to 40 employees losing their jobs. That was sad news, but was one demonstration of the way that the nominal charge of 5 pence had altered the behaviour of the shopping public. Instead, people have bought long life plastic bags (see next paragraph and later) or cloth bags which they bring with them to the stores. Estimates from the retail sector suggest that the consumption of "One trip" bags has fallen by 80%. Hence the effect on the manufacturer.
Supermarkets sell long life plastic bags, which are tougher than the free bags - but most of them have a policy that you can exchange a worn-out long life bag for a new one for no charge. The long life bags are, naturally, emblazoned with the shop's logo and name, to act as a mobile advert. The same news item that revealed the closure of the manufacturer reported the obvious phenomenon that shoppers are taking the bags from company X when they shop at supermarket Y. Tina and I have been doing that for ages. We have a "bag of bags" which contains long life bags from at least four different companies.
I wonder how effective the long life bags are as mobile adverts. This is the sort of question which O.R. scientists might study with the aim of determining an appropriate marketing strategy. My gut feeling is that they will have a tiny effect on other shoppers; when did you last notice the brand of the carrier bags of the person at the neighbouring check-out? Yes, I have been aware of them a few times - once when I passed a shopper with a bag for life from a French hypermarket, and a couple of times when the bag seemed out of place, with a discount supermarket bag in an upmarket store, and vice versa. But there is a possible marketing opportunity to target the owner of the long life bag. And it depends on using big data.
Supermarkets issue loyalty cards which offer their users different benefits (Tesco Clubcard, Sainsbury use Nectar, Morrisons has "Match and More", Waitrose use MyWaitrose). Using one of these loyalty cards allows the supermarket to build up a picture of the shopping habits of the owner of the card, which can be coupled with the data that had been needed to register the card. And some of the supermarkets have credit cards linked to the loyalty cards. So, without giving away too many details, we have two such credit cards. The first we use for most of our shopping, whether in the parent supermarket or not. The second we use in its parent supermarket and for online shopping. So the first parent supermarket can track how much we spend in some of its rivals, and know that we are not completely loyal to it. The second can see that we do not do all our grocery shopping with them.
What incentive could these stores give us to try and change our habits? Could they devise an extra incentive to encourage regular loyal shopping? And I suggest that bags for life could be used.
Consider the scenario. This shopper has a credit card linked to supermarket Z. According to the big data, that shopper spends 40% of their monthly food shopping at Z and the other 60% at two or three others. Supermarket Z might find it to their advantage to offer the shopper a free bag for life with a minimum spend, or a discount if they do their shopping in Z with an old bag for life from Z. The data exists - how do you want to use that data to make profits?
Supermarkets sell long life plastic bags, which are tougher than the free bags - but most of them have a policy that you can exchange a worn-out long life bag for a new one for no charge. The long life bags are, naturally, emblazoned with the shop's logo and name, to act as a mobile advert. The same news item that revealed the closure of the manufacturer reported the obvious phenomenon that shoppers are taking the bags from company X when they shop at supermarket Y. Tina and I have been doing that for ages. We have a "bag of bags" which contains long life bags from at least four different companies.
I wonder how effective the long life bags are as mobile adverts. This is the sort of question which O.R. scientists might study with the aim of determining an appropriate marketing strategy. My gut feeling is that they will have a tiny effect on other shoppers; when did you last notice the brand of the carrier bags of the person at the neighbouring check-out? Yes, I have been aware of them a few times - once when I passed a shopper with a bag for life from a French hypermarket, and a couple of times when the bag seemed out of place, with a discount supermarket bag in an upmarket store, and vice versa. But there is a possible marketing opportunity to target the owner of the long life bag. And it depends on using big data.
Supermarkets issue loyalty cards which offer their users different benefits (Tesco Clubcard, Sainsbury use Nectar, Morrisons has "Match and More", Waitrose use MyWaitrose). Using one of these loyalty cards allows the supermarket to build up a picture of the shopping habits of the owner of the card, which can be coupled with the data that had been needed to register the card. And some of the supermarkets have credit cards linked to the loyalty cards. So, without giving away too many details, we have two such credit cards. The first we use for most of our shopping, whether in the parent supermarket or not. The second we use in its parent supermarket and for online shopping. So the first parent supermarket can track how much we spend in some of its rivals, and know that we are not completely loyal to it. The second can see that we do not do all our grocery shopping with them.
What incentive could these stores give us to try and change our habits? Could they devise an extra incentive to encourage regular loyal shopping? And I suggest that bags for life could be used.
Consider the scenario. This shopper has a credit card linked to supermarket Z. According to the big data, that shopper spends 40% of their monthly food shopping at Z and the other 60% at two or three others. Supermarket Z might find it to their advantage to offer the shopper a free bag for life with a minimum spend, or a discount if they do their shopping in Z with an old bag for life from Z. The data exists - how do you want to use that data to make profits?
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