The package-free Supermarket

While talking to Serdar last week I was reminded that one tasks of the course was to get and give feedback to others. This includes those  who may be in another group than oneself, so that one can profit from one another. Following that thought I decided to post my idea for a new businees here and hope to receive as much feedback, comments, suggestions, critique as possible. As we learned from Karin Nilsdotter it can be very beneficial to cooperate and learn even from your competitors, although that is not the way I see the participants of this course. To present my idea I thought I would follow the assignments we had during this course.

The idea sketch is as follows:

• What is the venture? Describe the product(s) or service(s).

The idea is to open a supermarket that offers all products other supermarkets offer but without disposable paper or plastic packaging, thus addressing the problem of waste disposal before it arises. You could call it “pre-cycling”. Goods are kept in “bulk bins” from where they can be put into (glass) containers. So e.g. the noodles that are usually either packed in a plastic bag or in a cardboard box will be kept in these “bulk bins” out of which you take them and put them directly in your own tupperware or glass container. So that all the waste that is produced just to allow you to take predefined portions of a certain food will be removed. Additionally it will promote local products from around Stockholm or at least Sweden whenever that is possible.

• How is it related to your field of specialisation? Explain briefly.

I am studying Energy and Resource Management. Implementing this idea allows us to save energy currently used to dispose of waste and valuable resources used for packaging.

• What is the customer pain/problem (or delight) you will address?

Swedish people are portrayed to be very eco-conscious. Nevertheless we rely too much on packages to fulfil basic needs endangering the environment. The problem of waste disposal is becoming more and more evident and ways to tackle it are desperately needed.

• What is the target market? Be clear and focused. Identify specific customer segments.

The customers will be well-situated, eco-conscious inhabitants of Stockholm, possibly in Östermalm. Previous customers of the Farmer’s market, coop and people who want organic food will be the target market. It will also appeal to patriotic Swedish people who want to support the local farmers and economy. The age group will probably be over 30.

• Name the three most important competing or substitute products or services.

1. Innovative, new ways of waste disposal.
2. Established supermarkets that copy the concept as part of their venture.
3. Farmer’s markets where local food is offered.

• How is your venture better than its top competitors and substitutes?

1. What is most important is that it is more eco-friendly than other supermarkets and supports the local farmers and industry. It combines the convenience of supermarkets with fresh, package-free products from farmer’s markets. Also, waste disposal is redundant if one does not produce waste.
• How will the venture generate revenue? Be specific.
  1. The way to generate revenue will in essence be the same as in every other supermarket but since new contracts will have to be drafted with producers and suppliers, and since mainly local products shall be sold the prices will be little higher than in other supermarkets. An additional way is through offering recyclable glasses and bags for sale or rent to carry the goods home in case of a spontaneous purchase that did not allow for bringing personal containers. Government subsidies are also imaginable although subordinate.

• What are the three biggest risks for the venture?

1. People are not willing to change their shopping behaviour.
2. As found in literature: lack of focus by the founders or an insufficient business plan.
3. The willingness to pay higher prices to help preserve the environment or in other words the “eco-friendliness” of the Swedish people is not enough for positive revenue.

After a screening from Yuwei – thank you very much again 🙂 – it was possible to get a more comprehensive overview of the situation and I identified some major points that need to be addressed. The new perspective I got was as follows:

Based on the screening it is safe to say that the overall potential of the product is relatively good. However, there could be a potential convenience problem. It may be that there are better-off alternatives to carry the goods home i.e. reused textile-plastic-hybrids. Further research needs to go into that direction.

In general more product evaluation is needed as a next step, including establishing a contact network with the right supermarkets, distributors and experts on the area for more thorough and useful feedback on how to develop the product further. The upside is that increased eco-friendliness in the supermarket industry/sector is definitely needed and there hasn’t been enough initiatives to do so, so far.

A crucial deficit of the business is my lack of experience and of a network in that area. Therefore it is of the utmost importance to address that, get in contact with experienced people and establish partnerships maybe even cooperate with one of the big players like Coop and in the worst case settling for opening a side brand. However the potential to assemble a team is there. Definitely time and research need to go into that.

Additionally another issue is as always the money. As a next step a business and a revenue model need to be set up. It should then be possible to find potential investors, however the lack of network and experience is problematic since the needed amount is relatively high.

To sum up the potential is there, but work and time is needed to first and foremost establish a network and gather an experienced and motivated team and doing research as the key milestones and then go on with developing a business and revenue model followed by finding suppliers, a location, marketing and actually building and opening the supermarket.

Thanks to feedback from Axel I gained new insights into the venture. A thing that should be investigated into is the possibility of using bio-packaging. An idea of how to do this can be found here:

http://www.trueactivist.com/16-year-old-invents-sustainable-bio-plastic-from-banana-peels/

I attend to upgrade the progress of the idea here as it hopefully will evolve due to input from other course members. I hope to receive some feedback through this post and in turn will be happy to provide feedback to others who post there ideas here on this blog.

I look forward to hearing from you and thank you very much for your help.

#Dreamgineering