Supermarkets love buy-one, get-one-free promotions because they draw a lot of customers and move a lot of volume. But in this new era of sustainability, some retailers think there's a better way to BOGO.
Tesco, for one, believes that BOGO promotions generate too much waste. Research conducted by the British retailer found that the second product is, in some cases, one too many, and if it's perishable it might go bad before the customer has a chance to consume it. That's why last month Tesco announced a “Buy One Get One Free — Later” initiative, which gives shoppers a voucher for their free product that's redeemable in the near future, thus ensuring that they get their promotional item only when they need it.
“We must do more to help consumers waste less,” said Sir Terry Leahy, Tesco's chief executive officer, at a recent industry conference in Copenhagen. “It is time to work together to end the throwaway society.”
The issue of food waste is one that's getting increased attention these days, with advocacy groups, news reports, books and blogs investigating and spreading the message of food conservation. Supermarkets, for their part, have a long history of donating excess produce and other perishables to food banks. Yet, critics say that retailers don't do enough to cut down on that excess at the front end.
“Many supermarkets [in America] donate excess food, but they won't change any of their practices to stop creating so much excess,” said Jonathan Bloom, whose blog, wastedfood.com, covers food conservation.
Supporters say Tesco's BOGO Later program represents a new step forward for retailers. In addition to reducing waste, a voucher system would mean fresher, better-tasting product, which could enhance loyalty, especially in natural and organic categories.
But could such a program work in the United States? Matthew Saline, president of Mambo Sprouts, a whole health marketing firm that specializes in coupon promotions, thinks that it could, within certain limits.
“It definitely resonates with shoppers, but it also brings up some operational questions,” he said.
For example, what if the product is discontinued by the time the shopper goes back to claim it? Saline said there should also be clear parameters on when coupons expire and who distributes them — the supermarket or the manufacturer?
There's also the question of whether supermarkets would want to deal with coupons like this in the first place, since doing so “would probably require a change in their inventory processes,” he added.
One thing's for sure: It pays for retailers to think about their promotional programs. According to The Nielsen Co., 43% of all supermarket purchases are sold on promotion. That's up from 41% a year ago — a difference of 1.3 billion purchases.