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We all know shopping bags (or checkout bags) make shopping very convenient. With the introduction of plastic bags for shopping, it became very convenient and economical for retailers, and shopping bags at stores became as common as exit doors!
Many countries, and states in various countries, have implemented a ban on the usage of shopping bags manufactured with Plastic (polyethylene) due to environmental concerns.
Most up-market retailers have started providing Paper bags with purchases and have absorbed additional costs in their already high margins. But, many grocery stores have actually resorted to a strange (to me) tactic of selling alternative bags (made of jute or cloth or paper) at the check-out counters.
This does look like a good business opportunity – a lot of people end up at the check-out counters with items they cannot carry with bare hands and hence are forced to buy those bags. And these bags are priced, definitely, not at the cost price but with additional store margins. So they do make some money on these bags.
But, not so apparent to these store or franchise owners is the following (and that is strange to me):
- A lot of shoppers actually drop items, and end up buying only the necessary ones (I have seen many shoppers actually dump the majority of their shopping trolley, and carry just toothpaste or a food item!)
- Many shoppers, even when they decide to buy that bag, when hitting the limit on what they can carry in one or two bags, end up dropping the additional items.
- The additional time in this process at the check-out counter increases the transaction time many-fold.
- It is highly irritating for shoppers to spend an hour collecting items from all over the store in a trolley, and then having to decide on dropping some of them while checking out. Some of the checkout clerks are not even trained to handle situations when confronted, irritating the customers so much they may not return to the store.
- The logical behavior over time would be for everyone to start carrying their bags from home, but essence of the displays at the stores is to get the shoppers to buy more than what they planned. This procedure forces them to plan and hence limit their purchase.
It’s evident that these stores are losing a lot of business due to this. What’s strange is that the business economics of such decisions do not strike these retailers.
They need to give these bags for free! Selling shopping bags is not the business of these stores, at least not by cannibalizing their major business.
And if it really looks silly to give a bag for few bucks of shopping (which the person can carry in hand as well!), link it through a promotion and give it for free for an amount (and in multiples of that amount) and above of shopping!
Common business sense!