RECYCLING GOES PROMOTIONAL AND OPENS A NEW VISTA OF RETAIL OPPORTUNITY
Recycling. For many retailers in those states that have bottle deposit laws, recycling may seem like a necessary function. It’s important to be in compliance.
But this long-standing paradigm may in fact be changing-changing fast and very much for the better. Retailers, as well as reverse vending platform suppliers, are now looking at recycling as a business-building opportunity that has by and large lain untapped and ignored for a long time. The new paradigm views bottle recycling as an extension of the front end, with a host of advertising, promotional, marketing, image-reinforcing, selling and couponing options to take advantage of.
Indeed, some see it as such a major opportunity that it overshadows the purely compliance aspects of bottle recycling. “Retailers have not really capitalized on the opportunities presented by an automated recapture system for bottle recycling up to this point,” says Warren Stoll, vice president, sales and marketing for Tomra North America, a reverse vending platform supplier. “But they are now starting to take this idea very seriously and are seeking to implement programs which will allow them to benefit from bottle recycling opportunities.”
The promotional functions that can turn recycling into a business builder are straightforward. Reverse vending platforms provide the consumer with receipts for cash or discounts at checkout; and that hasn’t changed. Added to this, however, are some really open-ended options. For example, the reverse vending platforms can also be platforms for billboard quality advertising. They are interactive with consumers and can dispense coupons, not only for branded products but also for private label. They can give out prize tickets and incentives. They can provide video. The messages can be product-oriented-or image-building, such as one that demonstrates to customers the retailer’s commitment to going green. And, this opens a whole new area in which to partner with manufacturers.
Perhaps the most potent aspect of reverse vending marketing is that, unlike the front end, consumers hit the recycling site at beginning of the shopping trip, not its end. Moreover, they hit it just prior, likely seconds prior, to entering the store’s traffic pattern. This, to say the least, increases the probability that promotions, advertising and messaging at the recycling site will be acted upon as the shopping trip unfolds in the aisles.
Several market developments are prompting this new interest in recycling as a lucrative business-building model for retailers. One is that consumer behavior is favorable for developing a recycling-based sales and promotional program: Consumers buy 52% more on a shopping trip when they recycle beforehand, according to an independent survey.
Another is that, of the 11 states that currently have bottle recycling laws, two-Connecticut and New York-have passed legislation to include water bottles, hitherto not included. Since these two populous and important states have taken this step, it is probable that other states may follow, especially since recycling provides state governments with revenue streams, and states, in these challenging economic times, are seeking ways to increase revenues.
But more importantly, inclusion of water bottles in recycling programs will considerably increase the volume of recycling. It’s a huge market. Some 8.6 billion gallons of bottled water were consumed in the United States alone in 2008, and major shelf allocations are given to bottled water in most supermarkets. This increase in bottles to be recycled will give reclamation sites higher levels of traffic and exposure than they have ever experienced.
In addition, going green is gathering a great deal of momentum for retailers as they seek to satisfy consumer needs. Recycling certainly fits that mold, and more and more consumers, according to Tomra North America, who have containers to return will seek out the best recycling solution. A final development is the availability of reverse vending platforms that are designed to incorporate promotional and media functions, as well as recycle used soda and water bottles.
Packaging-specifically new, pristine product packaging on the shelves-has always been an enormously powerful marketing tool in addition to its purely functional role. Now, it looks like old, discarded packaging has in its own right and in a real sense become an effective promotion force. Retailers that take advantage of this stand to benefit.
Roy White is a vice president of The Food Institute and has devoted his career to serving the mass market retail and consumer packaged goods (CPG) manufacturing industries. Contact Roy at 201-791-5570 or firstname.lastname@example.org.