Zero Touch Shopping is Here: What if CPG products could add themselves to shopping carts?
Updated: Jul 6
Auto-replenishment saves time and more
By Manish Sinha
I don’t know about you, but I always seem to remember that my shampoo bottle is empty when I’m already in the shower. As soon as I step out of the steam, the thought of the empty bottle slips my mind and other considerations take over. The next time I need the shampoo, I remember that I’m out once again. What a terrible situation! It only gets worse with products that are shared in our household, like milk or laundry detergent. On Sunday evening, when I am ready to do my laundry, I see that the detergent is gone. My daughter did her laundry the day before and used the last few drops. Once Monday arrives, the empty detergent bottle slips my mind until the next weekend. Then my daughter and I are both complaining about the lack of laundry detergent. We must make an emergency trip to the store.
It’s hard to remember to put things on your shopping list
Fast-moving consumer packaged goods, or CPG products, continually need replenishment. With our busy lives, we often don’t remember to replace them before their absence becomes frustrating. The only solution is to add items to a shopping cart as soon as they run low. This may be easy for some products, like the laundry detergent or milk mentioned above, but it isn’t as simple to add shampoo to a list while I am in the shower. Periodically, then the items in the shopping cart would need to be purchased.
In today’s world of IoT (Internet of Things) technology, there must be a better way to automatically create a shopping cart for the household. If refrigerators can keep track of the groceries they contain and add items that are almost empty to a list, then why can’t a bottle of shampoo add itself to the shopping cart? That should be a very simple IoT solution.
IoT labels capture product usage data and know when to auto re-order
What if the following process existed? If CPG product manufacturers added an IoT labels to their packaging containers, product consumption could be tracked and communicated with the consumer in real-time. This IoT tag would collect and send usage information by day and time, geolocation, and volumetric data to the consumer’s smart phone or any other Bluetooth connected device. The usage of various products would be aggregated over time to create an analytics and engagement dashboard for the consumer. The CPG product itself communicates facts and figures about usage to the consumer. Of course, privacy and security would need to be taken care of.
For an IoT label to work on most CPG products, it would have to be extremely thin to not add weight or bulk to the container of the CPG product. It would also need to be inexpensive to not drive up the cost of the product. Ideally, an IoT label could multitask, replacing the sticker that currently contains the bar code of consumer products.
How consumers benefit from auto-replenishment
The thin, sticker-format IoT label could become the world’s first connected consumer platform, working to help consumers understand how, when, and where they use a product. This would provide a couple of benefits for the consumer. First, customers could track their utilization pattern and compare with desired rate of consumption. For example, is our household consuming the recommended level of olive oil every day? Or does my daughter pour a little too generously on her salad? Second, when a product comes close to running out, the consumer could enable it to add itself to their favorite shopping cart. Users could define a threshold that would trigger adding an item to an order - i.e., when only 20% of the olive oil remains in the bottle. The consumer could even set an automatic reorder for some critical products, like toilet paper or shampoo. This process leads to the first ever consumption-based auto-replenishment.
Prevents over-stocking or under-stocking unlike the time-based replenishment
A consumption-based method of auto-replenishment would be much better than the system followed by Amazon and other vendors, in which consumers receive a new order after a set time. The issue with time-based auto-replenishment is that consumers are either over-stocked, as when they go on vacation, or under-stocked, as when guests are increasing a household’s typical consumption rates. Consumption based auto-replenishment would reorder only when a product is nearly finished. In fact, the IoT label could calculate the product’s daily consumption rate and reorder, perfectly timing the delivery of the new order with the end of the existing product.
How auto-replenishment benefits the manufacturers
The manufacturer of an auto-replenished product would profit from accumulating usage data as well. No longer would manufacturers have to conduct market research in a group forum with the input of a limited number of consumers. Manufacturers know very well that consumer forums are only partially successful. Buyers who are surveyed share what they think, not realizing that there is frequently a discrepancy between ideas and actual habits. Instead, every container with a IoT label would provide real-time consumption data to the manufacturer – if, of course, the consumer agreed to share that data. This information could drive adjustments to many aspects of manufacturing and marketing. For instance, the manufacturer might note that many consumers actually use twice the volume of liquid detergent recommended for every load of laundry and revise the instructions printed on the label. Another manufacturer benefit is increased brand loyalty, raising the net value of each consumer. Auto replenishment, therefore, would be beneficial both for the manufacturers and for the consumers.
Benefits to intermediaries in the value chain
Even the intermediaries in supply chain networks could gain from an auto replenishment model by using their own IoT labels on product containers. For example, Target might use an after-market IoT label on my shampoo. With this sticker, Target could send me the next order of shampoo when mine is close to running out. This model would provide a consumption-based subscription model to Target, enabling the additional sale to occur with no shelf space necessary in the store. The time-based model of subscription would be obsolete in minutes.
Driving sustainability with auto-replenishment
In addition to creating advantages for consumers, producers, and distributors, a product’s environmental footprint would also improve with the use of the auto-replenishment solution. Manufacturers could accelerate the “refill packaging” initiative by initially shipping a reusable container with an IoT label. Refills could then be sent in environmentally friendly packaging. The resultant cost reduction would easily balance the cost of the IoT label while improving the product’s environmental footprint.
Last, but not least, we can imagine IoT label providing a way to deter the production of counterfeits, as the fake product would not be able to access the IoT system. Even if a counterfeit chip were created, it would not communicate the correct data to the auto-replenishment system.
The future is here now
With such an elegant solution to the annoyance of replenishing consumer packaged goods, customers may wonder when the ease of IoT labels and auto-replenishment will be realized. Happily, the system already exists. Adrich manufactures IoT labels in order to leverage the smart technology. We are not far from the day when our shampoo bottle will add itself to the shopping cart when it is almost finished.