Category Archives: retail

What opportunities for green marketing as retailers expand in Indonesia?

Carrefour logoThe Jakarta Post had this interesting tidbit of news a few days ago: “This year, minimarket chain Indomart is targeting to open 750 new outlets while its main competitor Alfamart plans to open 600 new outlets. ” This is happening while hypermarkets continue an aggressive expansion across the archipelago, with Carrefour Indonesia (40% market share in the hypermarket segment) planning to give the country 20 new outlets each year.

So if you’re working for an environmental NGO, why exactly is this worth stopping to think about?

Convenience shopping carries a rather mammoth footprint with it. Every additional retail outlet that opens represents new transport journeys for distributors, which creates additional traffic and polluting emissions. Add to this energy use to air-condition and light large spaces. Then you have the products themselves, packaged in styrofoam and other plastic material—and we all know where this packaging will end up (hint: not in a sanitary landfill).

If we look beyond the employment opportunities and added convenience that more retailers will offer to Indonesia, one thing is clear: unchecked and unmanaged, their impact will be felt in the air that we breathe and the water we use to wash ourselves.

And here is the opportunity for environmentalists and retailers: crafting alliances to collaborate on energy use optimization, waste reduction and consumer awareness. This will ensure that as we see more supermarkets around us, our living environment does not suffer from it.

For progressive companies, this means working with NGOs to source food products locally as much as possible, reduce superfluous and polluting packaging, and most essentially, educate customers through green marketing and work with them to reduce their environmental impact.

Because of their centralized structure, companies such as Carrefour and Hypermart lend themselves well to implementing environmental measures that will be replicated at a national scale. Some NGOs may balk at the prospect of working with big corporations—but it may offer the best chance of delivering large-scale actions that will limit the environmental impact of modern shopping.

3 is a winner: Indonesian waste law, product responsibility & green marketing

Every day, with a ching and a smile, tens of thousands of laptops, light bulbs, juicers and electric fans change hands from retailers to consumers across Indonesia. Now fast forward to a few years later, when these electric appliances burn out, and end up decorating landfills, polluting rivers or torn apart by street kids to recycle components and sell them back. So if you’re the manufacturer, what do you do?

Option 1: You look the other way. I mean come on–things are hard enough trying to stay profitable in these tough times, making sure your products adhere to safety standards, and trying to reduce waste at your production site. How on earth are you going to keep track of your products after they have been sold and used? (That’s when you start grumbling about environmentalists and how they’re never satisfied with efforts made by businesses to reduce their environmental impact.)

Option 2: You come to terms with the fact that you have a liability on your hands. If you’re producing batteries, how badly do you want to see them scooped up by school kids during a clean up operation in a natural reserve (say Muara Angke in Jakarta for example)? Or photographed in the hands of a woman in rags trying to pry them open to salvage their components?

(If you are manufacturing and selling products in Indonesia, just consider the legal implications of having your products littering the country. Law 18/2008 on waste management could not be clearer; producers are required to manage their packaging and/or products that do not degrade naturally (source here). For those of you who like fancy terms, this is called Extended Producer Responsibility. According to The Economist, 31 of America’s 50 states have product-specific EPR laws. The European Union requires manufacturers to dispose of packaging, electronics and vehicles. Canada and Japan also have EPR laws.)

Option 2+: You do something about it. While some companies will squirm and stick to option 1, enlightened companies  will see here an opportunity to build customer loyalty. Look at US firm Staples for example, which sells office supplies–the company has rolled out a take-back programme for used items such as computer monitors, compact fluorescent light bulbs and batteries.

Is it a cost? You bet it is. But consider how Donny comes back to your store with a used item he wants recycled, and he gets to exchange it with one of your newer products at a discounted price. In one neat move, you have showed the world that you are taking responsibility for your products, you have offered your customer a service to rid him of a now useless device so that you can dispose of it safely, and now you have sold him a new one while making him feel good about it.

If none of this sounds convincing to you, consider this. In Java, the heart of Indonesia’s manufacturing sector, environmental capacity is already at critical level. That means the island cannot accommodate any more environmental abuse, whether pollution or infrastructure development (with more than 60 million people, this is hardly surprising).

Time to start thinking about how your business operation can avoid contributing to this disaster in the making.

Hypermart Indonesia gets social marketing–when will others?

It was looking like another depressing ‘green’ re-run in the retail world. Supermarket chain jumps on the green bandwagon by selling so-called tote bags at the check-out counters, with the same old ‘green’ slogans (when will marketing get the fact that people are not necessarily out to save the world?). So when a smiling clerk came up to me with a free drink as we were frantically piling the shopping in our reusable bag at Hypermart Galeria in Bali, I stalled. Finally. Customers who refuse plastic bags having their action validated with a freebie. Social marketing 101!

The mainstream and unspoken consensus in the retailer world in Indonesia seems to be: “Yo, let’s start selling green bags and tap into that ‘green’ trend thing.” For some supermarket chains, such as Carrefour, this has been nothing short of a phenomenal marketing bonanza it seems. The ubiquitous Carrefour green bag is now seen at railway stations (filled with family clothes), at the park (with junior’s change of clothes) and at airports. Where it’s been noticeably absent is at Carrefour’s check-out counters, where customers should in theory bring them to avoid using plastic bags.

Hypermart handing out a cool drink to customers who bring their own shopping bag (whether it’s plastic or cloth, who cares?) brings them one step ahead of the pack. Here is a basic demonstration of what we should be seeing wherever there are efforts to change people’s behaviour: clear benefits for them. Will a free drink be enough of an incentive for customers to bring their bag again next time they go shopping? This is where it will pay off to do a bit more customer research…

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