Why we need to discard using disposable plastic and paper bags

I am fond of buying those eco-bags in the groceries especially if they have sturdy material or have attractive designs.  Since I have been blogging about retailing and groceries, market planning and the likes, I want to delve on writing something different that will make every environmentalists smile by pointing out the negative use of plastics and paper bags in grocery shopping. 

Disposable shopping bags are everywhere. From department stores to gas stations, they are the way we tote our purchases. These lightweight containers were introduced in the 1970s as a means of making shopping easier for consumers. So what’s the big deal? We’ve compiled 10 facts about plastic bags and paper bags that we think are good reasons for you to pick up a reusable bag and make the next bag you throw out your last.

1.       How long does it take for plastic bags to decompose? A plastic bag can take from 15 to 1,000 years to break down, depending on environment. In a landfill, kept away from the environment that would help them biodegrade more easily, paper bags don’t do much better.

2.       Plastic bags don’t biodegrade, but they can break down through photo degradation. When photo degradation, decomposition through exposure to light, happens, the bag breaks down into small, toxic particles.

3.       An estimated one million birds, 100,000 turtles, and countless other sea animals die each year from ingesting plastic. The animals confuse floating bags and plastic particles for edible sea life such as jellyfish and plankton. Once ingested, the plastic blocks the digestive tract and the animals starve to death. Other animals drown after becoming entangled in plastic waste.

4.       The cost to recycle plastic bags outweighs their value, so most recycling facilities will not take them. Instead of being recycled, they are thrown out with the rest of the trash.

5.       According to the Environmental Protection Agency, which has been collecting plastic bag statistics for more than a decade, roughly 2% of plastic bags are recycled in the United States. The rest are left to live on indefinitely in landfills or decompose in our oceans, where they leech toxins into the water and soil.

6.       Thanks to their light weight, plastic bags in landfills don’t always stay there. They are likely to fly away and can settle in trees, block storm drains, and clutter beaches.

7.       Plastic bags make up more than 10% of washed-up debris that pollutes any countries coastline.

8.       Plastic bags are made from petroleum products and natural gas, both non-renewable resources, and their manufacture helps to drive up gas prices.

9.       Think paper bags are better? Think again. We cut down 14 million trees a year to supply the raw material to make paper shopping bags.

10.   Paper bag production involves the use of chemicals and high temperatures, and it releases toxins into the atmosphere at nearly the same rate as plastic bag production.

More than a dozen nations have banned or taxed disposable bags in the past five years.

Reusable bags come in a wide variety of stylish shapes and prints, making shopping a bit less routine and more fun.

Some grocery stores offer discounts to customers who bring reusable bags: Now that’s an incentive!

The average reusable bag has a lifespan equal to that of more than 700 disposable plastic bags.

One person using reusable bags over their lifetime would remove more than 22,000 plastic bags from the environment. Isn’t that an even better incentive?

There are thousands of other facts about plastic bags and how they impact our planet. But despite the damage they do to the environment, some people still haven’t given up their plastic bags, facts or no facts.

So my advice, always make use of your eco-bags, they are highly stylish rather than the usual plastics or paper bags.  Let us take care of our mother earth by being ecologically conscious of our moral and civil duties of causing less harm to our environment, one shopping and grocery at a time.

Forecasting is Efficient Planning

Most companies must-haves are good planning and inventory management, this not only applies to retailers, but is also being highly implemented all across different corporate and small business spectrum.  Since overstocking or understocking let say, tissue papers for the company's restrooms, can mean either additional monthly cost above budget if the purchaser overbought these tissues that can be good for 6 months stocks, or lets say for understocking, immediate needs that would require having to purchase to fill in the vacuum of insufficient stocks and this can also arise another additional cost of buying retail to fill the immediate needs rather than buying it on a wholesale price.

Today, I wanna discuss the importance of forecasting, Different companies call the process of forecasting the need for future goods or services different things, demand-forecast, sales forecasting, product forecasting, business planning. No matter what terms are used, market demand, market potential and sales forecasting are inextricably tied together by virtue of the end result - knowing what, how much and when consumers want to purchase goods or services., the ultimate aim is to have cost-savings for the company and result in a more fluid, cost-effective and if not appropriate budgeting.

Market Demand

Demand reflects the willingness of a consumer to purchase a good or service. Market demand reflects the willingness of all consumers within a given market to purchase a good or service. Companies spend millions of dollars on software and experts to help them predict or forecast market demand. Companies forecast market demand because it fluctuates and has an unstable nature. If every company knew exactly how many people would buy a given product or service, the need to forecast market demand would evaporate.

Market Potential

One company selling widgets in a certain market has a certain percentage of that market’s total sales volume. The maximum number of widgets sold by every company that sells widgets in that same market comprises the market potential for widgets in that market. Market potential refers to the maximum sales volume of any given product or service in a given market before the product or service reaches market saturation.

Sales Forecasting

Sales forecasting refers to the process by which a company attempts to predict future market demand of a product or service. Companies typically use historical sales data to predict future market demand. Problems can occur with blindly using historical sales data as a forecast input because at times it does not parallel actual market demand.

Demand vs. Sales

For example, a furniture company makes a very popular dining room set but has constant production issues in manufacturing. Because of these issues, it cannot keep up with demand for the product. At the end of the year, the historical sales data show the company sold 5,000 of the dining room sets between September and December, but the historical sales data misses a vital piece of the demand equation: It doesn’t show the 2,500 dining room sets people came into the store to buy but couldn’t because the company could not produce the goods in time. The additional 2,500 potential sales make the actual market demand 7,500 units (5,000 sold + 2,500 missed sales). If the dining room continued to sell at its current rate and the company only used the 5,000 units as an input to forecast the future market demand, the forecast would fall short during the same time period next year because it does not reflect the actual market demand of 7,500 units. The result leads to loss sales and revenue.

Considerations

Despite being called "sales forecasting," the goal remains forecasting future market demand. This becomes more difficult when trying to forecast new goods or services and the market potential for these new products. Many different forecast methods exist for determining market potential, but as with all forecasts the result is inherently wrong. Whether forecasting market demand or market potential, using clean, accurate and relevant data--human and system-generated--gets the forecasting process off to a good start.

Category Management Strategies

Traditional category management is an old concept in a brave new world. Retailers need a new solution as they enable the level of differentiation necessary to attract consumers with an ever-grow­ing number of shopping alternatives.

Merchants need a better way to create differenti­ated customer experiences, build solid category strategies, design compelling assortments, plan productive planograms, and efficiently price and promote to the market—and they need it now. Enabling all this will, in most of today’s retailers, require changes to processes tools and organiza­tional structures. It also means better connecting existing processes, and bringing together disparate parts of an organization like never before to deliver a seamless customer experience.

Today, successful category management encom­passes a broader set of capabilities than in the past, including: category role and strategy, macro space allocation, financial budgeting, assortment plan­ning, planogramming, price optimization, private brand development, promotion and event plan­ning, and joint business planning with vendors. 

In addition to an expanded functional footprint, the beginning and end of the processes a category manager needs to manage have expanded. Many are now defining this work as spanning from the initial development of the category strategy and role, through to the completed reset of the store shelf and online assortment. This is a much wider view of the world than what category management traditionally included, and creates a big part of the challenge.

Leading retailers are already planning for the changes and tools needed to integrate these capabilities and define new ways of planning and managing categories, and these efforts are paying dividends. Retailers such as Target, Kroger and Walmart have seen impressive results from re­vamping category management, including a 2% to 4% increase in sales, a 2% to 3% increase in margin and a 10% to 15% increase in inventory productivity.

But despite these positive efforts, most retailers remain stuck in the past, partially due to fatigue from traditional category management. And even those who have addressed parts of the issue would benefit from a more sophisticated approach. Leading retailers will invest in holistic changes to their processes, tools, organization and culture to enable a necessary shift in the way they plan and manage categories.

Tackling these historical inefficiencies and problems requires addressing seven key facets.

1. Real customer centricity—walk a mile in your customer’s shoes

Today, many retail organizations are far less customer-centric than they claim to be. But in the modern retailer-customer relationship, the customer holds all the cards, and the retailer can’t afford to be anything but hyper-attentive to her expectations. As a result, everyone throughout the organiza­tion—including everyone involved in the category management process—needs to have a laser focus on the consumer and her needs and wants at all times. Creating truly compelling products and customer experiences should be the common thread linking all parts of the organization and category management process.

Leading organizations are going about this in several ways. Some, like Hy-Vee and Lowe’s, are creating the position of chief customer officer to drive customer-focused improvements across channels and functional groups. Others are taking a closer look at loyalty and social media data to understand how their core customers shop their stores and identify opportunities to capture share by satisfying unmet needs. For example, consider a retailer who found that a key customer segment shopped only 20% of their basket with that retailer across four categories. By taking a customer-centric approach, the retailer was able to identify catego­ries in which the needs of that customer were going unmet and exploit that gap to increase basket ownership to 40% across 10 categories.

2. True integration—you’re probably not as integrated as you think

Highly siloed organizations—within functional groups and across channels—have led to processes choked by a series of handoffs and put category management, and ultimately the customer experi­ence, at risk of falling victim to a game of telephone. Given the breadth of processes that need to be successfully orchestrated to improve category management, handoffs must be effective and efficient. In other words, integration is key. This means removing handoffs wherever possible, and when not possible, ensuring everything is done to make them as smooth as possible. Process and organizational design can provide some relief here by carefully considering what can be lost in translation.

However, integrated systems are providing the biggest benefits in tackling these challenges. Software plat­forms have made significant gains in the past 10 years to expand the functionality required to span the gaps between planning, execution and functional areas. Traditional supply chain solutions now offer tools to plan space, assortments and financials, and conversely, planning suites are expanding into supply manage­ment. These tools have fundamentally changed how processes are executed and have made syncing data, timing and weighing tradeoffs much simpler. But they’re big, expensive and can stress organizations ill-equipped to manage this magnitude of change. Adoption is picking up, but slowly.

3. Strong category strategies—if it’s not strategic, it’s not a strategy

Today, many category strategies are lacking neces­sary consumer insights and are ultimately not linked back into the category management process in an efficient way. Developing a strong category strategy takes a well-crafted process in which a wide array of data inputs drive unique insights, which narrow in on a set of opportunities and thereby define required initiatives and potential benefits. The process should culmi­nate in a game plan for the category that defines the steps, required investments, and expected finan­cial or operational benefits. As category manage­ment has grown in breadth and sophistication, it has driven up the need for a robust go-to-market strategy the team can rally around and cascade across support teams. Successfully cascading category strategies starts with defining each category’s role within the portfo­lio. It’s also important to coordinate strategies and tactics related to assortment, pricing, promotions and placement across channels, and categories and functions and financial plans should be tied to category-level targets, providing a means for measuring success.

Throughout this wide array of processes—from financial budgeting to planogramming, in-store execution and marketing—it’s critical that the consumer can identify the strategy as it was intend­ed. For example, the value presented in a pricing strategy—competitiveness, brand consistency and value—needs to be aligned with the products that make up that product line—good, better, best. If these are disjointed, the value proposition is muddled, the customer will be confused, and the experience falls flat.

4. Clean, accurate data—it’s true what they say about garbage in

Retailers are awash in an ever-growing flood of data and information, but many are not positioned to use it to its fullest. For example, while most organizations have a data quality strategy in place, 94% suspect the data is inaccurate in some way, according to Experian. Accuracy is clearly a signifi­cant hurdle to many organizations’ abilities to harness analytics to drive decision making and improve the customer experience.

Getting the most out of all this data also means integrating it across the business, providing one version of the truth across integrated planning processes and connecting the dots across channels, categories and competitors to develop a true picture of the consumer’s needs and behavior. This includes a better understanding of past perfor­mance and consumer needs than currently exists for most retailers. Retailers who can achieve this soon will hold a tremendous competitive advantage, as only 37% of retailers currently have a contact data quality strategy in place that supports a single view of the customer, according to Experian.

5. Actionable insights—in the end, you have to do something

Ensuring the data is accurate and integrated is only half the battle—retailers are also challenged to derive actionable insights from that data and use it to drive smart decision making. Many organi­zations don’t devote enough time to this important exercise. As a rule of thumb, category manage­ment teams spend 80% of their time gathering and organizing data and only 20% of their time using it to develop actionable insights. Plus, insights are often supplier focused—as they provide much of the data—at the expense of the retailer’s customer experience and loyalty.

To really unlock value from their data, retailers first need to create a centralized analytics team that can identify and develop core insights for category teams. Secondly, these insights should be organized into three key categories—customers, clusters and channel; we call these lenses. The first lens, customers, prioritizes using data to figure out how to influence key customer segments. The second lens, clusters, focuses on harnessing demographic and consumer data to develop store clusters that require similar go-to-market strategies. Finally, the channel lens helps address the growing omnichannel challenge as click-and-collect and delivery models expand.

The key is to derive insights with an eye toward decision making and action. Organizing, funneling and interpreting data requires the correct structure and people to make it work efficiently.

6. Localization and personalization—how will you manage expanding complexity?

One of the industry’s biggest mandates is develop­ing personalized and pervasive relationships with customers across channels—one-to-one retailing. Consumers expect to be recognized and treated as individuals, and those expectations are spurring significant changes to all aspects of retail opera­tions. Modern category management is tasked with “assorting to the individual,” whether that’s an individual consumer or an individual store. Localized and customized pricing is the first push for many retailers, including Target, Kroger and Staples, which recently made news with its sophisticated pricing system that changes online pricing based on a customer’s proximity to competitors’ stores.

But this focus on granularity will also drive other changes. In assortment planning it will mean a continued evolution from national to regional to store-level, and finally, to individually curated assortments and experiences across channels. In space management, retailers will need to switch from a “one-size-fits-all” standardized approach to a store-level approach that’s flexible enough to allow localized adjacencies and shelf and product arrangements. And of course, marketing, promo­tions and pricing will change as well, as all move from a market-based approach to one that’s highly dynamic and individualized. These shifts will mean an exponential increase in complexity as increas­ingly granular decisions need to be made across more and more stores, customers, channels, func­tional areas and processes. While tools and systems will relieve the burden of computational work and coordinating decisions, this increasing granularity will require a significant redesign of key processes and organizations.

7. Clear roadmap—manage and measure progress

Of course, fixing so many problems won’t be a cinch, and benefits require investment. 

The neces­sary changes span many processes and organiza­tional silos—and we’ve seen that one cannot be optimized without making improvements to another. Additionally, modern category management can add operational complexity that will need to be supported by enablers such as new process, tools and organizational structures.

Organizations that are able to successfully trans­form their category management processes will start with a clear vision, multiyear roadmap, and consensus and commitment among key leaders across functions. The new approach to category management will also require new tools—with considerable data needs—and new processes and organizational change, both of which come with significant cultural implications. Starting small will help prove out the value opportunities, while a focus on change management will ensure that new ways of thinking take root. Finally, focusing on set­ting and measuring key metrics helps demonstrate benefits and build accountability and ownership.

Although it’s not easy, transforming category man­agement is quickly becoming necessary. As more and more retailers start to address bits and pieces of the issue—78% of retailers plan to revamp their category management processes, according to RSR— those who pull it off now will be well positioned for what the future holds. Meanwhile, those who stand still run the risk of watching their customers jump ship for retailers who are proactively improving their category management capabilities to be more cus­tomer-focused, integrated and analytically driven.

CASE STUDY: HOLISTIC CATEGORY MANAGEMENT

Issue: A large, multiregional North American grocer struggled with flat or declining sales for several years—the result of a hypercompetitive market, rising supply chain costs and intense margin pressure from a heavy reliance on discounts and promotions.

Solution: The grocer built customer-centric clusters based on key demographic data to inform localized assortments and implemented leading assortment planning capabilities to build these assortments. They also established a robust and easily repeatable category strategy development process supported by robust analytics. Finally, a new space planning organization and tools helped the retailer build better planograms optimized to inventory turns.

Result: Sales increased 2% to 4% for pilot categories across stores, and that was with only 10% to 15% of each cluster’s assortment differentiated from the core assortment.