Designing Digital Circular Economies for FMCG Businesses
A circular economy is "a model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible".
Problem Overview
Unilever recently announced two ambitious new commitments contributing to a waste-free world.
1. By 2025, reduce the amount of virgin plastics by 50%
2. By 2025, help collect and process more plastic packaging than they sell
Throughout the FMCG industry, plastic is a material delivering high quality yet affordable products to every segment of the society. However, the linear take-make-dispose model means most plastic rarely gets a second use.
Objectives
Propose a Technology-driven solution which helps Unilever close the loop on plastic, or as we say create a #circulareconomy
Decoding the Scale of the Problem and Impacts
Plastic Waste in Numbers
Transition to Circular economy is a Change Management Process
Currently, ~40% of plastic waste in India ends up being uncollected for recycling. Proper management of this waste can create ~14 lakhs jobs and could potentially represent a ~$2bn opportunity.
The Real Problem
With the advent of single day home deliveries enabled by e-commerce giants, we now live in a world of convenience where most of daily needs are just a few clicks or taps away. This added convenience in turns drives demand and thus in turn brings more and more plastic into the ecosystem.
But at the same time these mechanisms provide easier tracking of plastic footprint in the ecosystem and helps to build easier collection mechanism which can be scalable and economical and thus reducing the overall impact of plastics on the environment.
1. Problem of waste starts at the consumer end through people not putting the right trash in the right bin leading to trash contaminations.
2. Due to repetitive and hazardous nature of job, waste management companies find it difficult to hire and retain employees.
3.With such high costs of recycling and segregation, it becomes cheaper for the waste management companies to take options like landfilling and incineration where they can take profits up 70% rather than taking small profits when they opt to recycle.
4. High Quality plastics recycled into downgraded products is not a true circular economy.
User Personas and Target Customers
The Solution - #GiveItBack: Collaborative Product Delivery and Collection Mode
#GiveItBack is an innovative Product delivery and packaging collection mechanism that leverages digital tech (Web-app/Android app) to provide convenient product delivery based primarily on reusable packaging/refilling with three major components:
1. Vending or Dispensing Machine on wheels/stores: Delivers (new product) or refills (reusable packaging) different FMCG products. Usually FMCG Product purchases are spread across multiple brands, like for an instance, a customer may prefer a shampoo from Unilever while a detergent from P&G. The vending/dispensing machine will dispense products from different brands enabling collaboration for scale.
2. QR Code based Digital Platform: Omnichannel platform to order and track products and return packaging. Includes features for digital payments, reward point redemption and social media integration
3. Smart Bin: Used packaging collector attached to vending machine enabled with barcode scanner.
#GiveItBack operates in three service modes:
1. Service on Wheels: Mobile Vending machine delivers products and collects packages door-to-door based on optimized delivery scheduling and routing plan.
2. Service in Stores: Vending machines for product delivery and collecting packages at stores. Customers can also go for “Buy at store, give at home” – means that customers can buy FMCG products from store and can return packaging to get reward points at home.
#GiveItBack Process explained:
• Customers need to register/subscribe for the service on the digital platform which can be easily accessed through QR Code enabled Web app (thus not necessary to download android apps)
• They can also opt to buy one-time reusable packaging/containers, cost of which can be redeemed through subsequent product purchases. In case they don’t wish to, they either can use their own containers or can go for new product purchases.
• They can now order/reorder products and can also return previously used packaging.
• Each vending machine has a QR Code enabled smart bin that collects the previously used packaging from customers. Customers submit the same after they enter their UID and thus become eligible for reward points/coupons that can be redeemed on subsequent product purchases.
• Customers can track their orders and pay through digital payment options available.
Solution -2 Digital Watermark Enabled Waste Segregation and Recycling
Pilot Run in Mumbai
A Pilot run/simulation of model in the city of Mumbai showed that even with minimal model penetration values, this model can collect around 2500 tons of plastic.
Success Metrics
1. Total Active Users
2. New users added per month
3. Quarterly Plastic waste collection (in Tons)
4. Quarterly Revenue from Refill Model (in Rs)
5. Avg Order Size (in Rs)
6. Plastic waste recycled (in tons)
Results and Recognitions for the Project
HUL implemented this idea in 2021 as HUL "SmartFill" and I was awarded National Runners Up in HUL Techtonic Challenge
