RETAIL VIEW: Prospect of increased sales is in the bag
- January 07, 2007
If truly there is such a thing as a win-win proposition, it might be the new environmentally friendly grocery bags being promoted by several companies including Earthwise Bag Co. Inc. in Commerce, CA.
The reusable shopping bag allows environmentally conscience consumers to forego the traditional "paper or plastic" choice; provides a stronger alternative for toting product from the store to the car and ultimately to the consumer's home; allows grocery stores to utilize the bag for advertising and promotional purposes; and can also help the bottom line of a grocery chain as the sales of the bag creates a new revenue source and their reuse decreases the cost of buying bags.
Steven Batzofin, co-founder and vice president of Earthwise, said that the company was founded in early 2004 and has developed a very good niche for itself. The firm has many customers ranging from the single market to large chains such as Albertson's. Earthwise Bag Co. sells a lightweight, reusable bag that is 100 percent recyclable. The bags are constructed from non-woven polypropylene, which makes them strong, durable and washable. An individual bag has a price point that allows it to be sold at retail for about $1. "Many stores price it as a multiple such as five for $5 or 10 for $10," he said.
The bag is produced as a blank canvas, and Earthwise will print anything on it the store wants, from its logo to an environmental message. Typically a store wants its name and logo on the bag, which give it an advertising piece that its customers take home with them and keep.
Mr. Batzofin said that when the bag is first offered to a store's customers, experience shows that 5 percent of the shoppers will buy it immediately with each customer buying five to 10 bags. He said that if the bag is merchandised properly, a store could expand that 5 percent to 10-25 percent in a relatively short time.
The Earthwise executive guessed that the average individual supermarket in the United States has a customer base of 15,000 to 20,000 people, with the more densely populated areas in the 20,000 to 30,000 range. It doesn't take a mathematician to realize that sales can add up quickly.
And the best part is that for each bag sold, the store -- and the local landfill -- is potentially saving dozens upon dozens of bags annually. Mr. Batzofin said the Earthwise bag will last two to five years depending upon how it is used by the consumer. While some use these bags only for groceries, other consumers utilize them for a variety of uses, which obviously cuts down on their life span. However, each use potentially prevents one plastic bag from ending up in a landfill, where it takes 1,000 years to decompose.
Earthwise cites statistics from The Wall Street Journal estimating that U.S. consumers use 100 billion plastic shopping bags each year with 99 percent of them going directly into the trash. Paper bags are recycled at a higher percentage level but far less than might be expected.
To maximize sales within a store, Mr. Batzofin recommends merchandising the bags close to where the customer is entering the checkout line prior to sale. Earthwise has a display rack that it would like to have placed at the front of each checkout stand. If a store uses only one or two display racks, he said they should be placed near the Express Checkout, which is where the most traffic is located.
Ideally, Mr. Batzofin said that sales could grow exponentially if the baggers would add the "recycled bag" option to their typical "paper or plastic" question. "That would be the ultimate selling technique," he quipped.
He said that successful retailers have also featured the reusable bag in their advertising circulars and some have offered it as a giveaway when their loyalty card customers reach a specific dollar level. For example, one chain offered a Thanksgiving promotion that gave a free turkey in a reusable bag when the customer spent $100. Still other retailers have tied the sale of the bags to a local philanthropic cause pledging to donate a nickel or a dime to a local charity for every bag sold.
Such promotions allow the chains to increase environmental awareness, position themselves as environmental champions and ultimately lower their cost of doing business.
Surprisingly, Mr. Batzofin said that the bags have sold pretty well everywhere without regard to geographic location. While it might be expected that the East Coast or the West Coast would be more receptive to an environmental pitch, that has not been the experience of the Earthwise Bag sales force. "We've done very well throughout the country," he said, noting that all geographic regions as well as conventional, organic and natural food store customers seem to understand that using a reusable bag is an important environmental statement.
The firm's business objective is as lofty as it is simple: reduce the amount of plastic and paper shopping bags in the nation's landfills.
It appears as if it has a winner.