Green With Loyalty

JULIE GALLAGHER

At checkstands across the nation, shoppers are silently chiding themselves for forgetting their reusable bags. For the average family, the slip-up costs 15 plastic bags per grocery trip. A lot considering that it could take as many as 500 years for one to degrade in a landfill.

PCC Natural Markets gives rebates to shoppers who pack their groceries in reusable bags.

Now retailers hope to help more consumers remember with incentives ranging from a dollar off a future visit to donations to a charitable cause. Some are even persuading shoppers to make greener choices in the grocery aisle where organics and other earth-friendly products equate to bigger basket rings.

CVS/pharmacy is helping shoppers make a habit of forgoing plastic bags with its Green Bag Tag program. The initiative is an extension of CVS/pharmacy's ExtraCare Club that — with 65 million active members — is the largest loyalty program in the nation. The Green Bag Tag came in response to shoppers' interest in sustainable living, eco-friendly merchandise and reusable shopping bags, Melissa Studzinski, director of customer relationship management for CVS/pharmacy, told SN.

Members can enroll by purchasing a Green Bag Tag for 99 cents. The leaf-shaped tag is made with corn-based material — an annually renewable resource — and can be looped around any reusable bag.

To gain “credit” for forgoing plastic bags, the shopper presents the tag and their ExtraCare card at checkout while either using a reusable bag; a plastic bag from a previous purchase; or carrying items out in hand. After their fourth visit, a $1 ExtraBuck — essentially CVS cash that can be spent on nearly anything in the store — is printed on the shopper's receipt. Cardholders have 30 days to cash in their reward.

The program is driving repeat visits since Green Bag Tag holders have to make five trips to CVS/pharmacy to recover their initial 99-cent investment: four to earn $1 ExtraBuck and a fifth to use it.

“By opting into the program through the purchase of a Green Bag Tag for 99 cents, customers feel invested and it becomes a more active, conscious decision to participate,” said Studzinski.

Since its launch last October, the program has gained appeal with a broad range of shoppers. Consumers at more than 7,000 stores have scanned their Green Bag Tag more than 12 million times, earning $2.4 million in ExtraBucks, noted Studzinski.

As an added bonus through March 31, 2011, CVS/pharmacy is donating 5 cents to the World Wildlife Fund for every Green Bag Tag sold.

The program comes at a time when consumers are making sustainable decisions, but their motivation isn't necessarily altruistic.

To be persuaded to choose an organic product or reusable bags, the average consumer must identify some type of personal advantage, according to Kristin Heist, senior design director for Continuum, a Boston-based design consultancy firm.

Its research found that to take an ecologically sound step, Americans have to either know they'll save money, as is the case with the CVS program; make some sort of social expression, like displaying for others your reusable bags; or believe the product is of superior quality to a conventional item, as is often the case with organic foods.

“People choose to do the responsible, environmentally friendly thing when it makes sense for them first and then the fact that it makes sense for the environment is kind of a perk or a reason to feel good about it,” Heist told SN.

She's a fan of CVS/pharmacy's program since it offers both a savings incentive and a tag that identifies for others membership in a club that benefits the environment. But most of all, Heist applauds the fact that CVS/pharmacy doesn't make shoppers jump through hoops.

“They've taken something that doesn't require much effort on the consumer's part while building loyalty by making consumers feel good about what their doing,” Heist said.

Convenience is also king with consumers in central Oregon, where shoppers at three Ray's Food Place stores have the chance to support local environmental projects by not using plastic bags. Ray's Food Place is one of three banners operated by Brookings, Ore.-based C&K Market, a 59-store chain that partners with environmental rewards company EcoUnit, Las Altos, Calif. The EcoUnit reusable bag program is available at Ray's stores in Sisters, Bend and Redmond, Ore.

For each plastic bag shoppers don't use, they can choose either a 5-cent credit or one EcoUnit credit that can be put toward one of several environmental projects.

As part of a previous version of the program, the number of EcoUnits earned and a unique code would appear on a Catalina Marketing printout at checkout. Participants could then “spend” the credit by entering the code at rays.ecounit.com. Programs range from tree planting to carbon offsets. Shoppers could also place their EcoUnit voucher in a drop box in-store. But if neither action was taken, the credits weren't applied to any project.

Consumer surveys indicated that even though the program drove reusable bag use and shoppers chose EcoUnits at checkout, many weren't closing the loop, explained Kent Ragen, founder of EcoUnit.

“The feedback that we got from participants was that they loved the opportunity to help their local environment, but the act of having to redeem their EcoUnit credits was too much trouble,” Ragen explained.

Today, credits are applied automatically to either a tree planting project on Oregon's Deschutes River or a water reclamation effort on the John Day River. Instead of a Catalina printout, an EcoUnit total prints at the bottom of a shopper's receipt.

“Basically, it's totally automatic so it helps support the program better than it did in the past,” noted Grant Lunde, marketing manager for C&K Market.

Under the current version, the environment is benefiting even more so than in the past, with enough EcoUnit credits earned each day to plant several trees, said Ragen.

Since the process has been simplified, even more shoppers have gotten onboard.

“Across stores for which we have comparative data, there has been a clear increase in participation since moving to the auto-redemption approach,” said Ragen.

Ragen and Lunde are considering even more cultivation strategies. A pilot conducted last year in all 48 Ray's Food Place locations showed promise.

Rather than reward shoppers for using reusable bags, it sought to drive multiple purchases per transaction of Organic Valley products.

“We said, ‘If you buy one Organic Valley product in a transaction you'll earn 25 EcoUnit credits, but if you buy two or more you'll earn 50,’” Ragen said.

Organic buyers were identified based on past purchases and targeted with Catalina printouts during the days leading up to the promotion. Shelf tags also supported the campaign that ran from October to December. It proved to be a success, said Ragen, who could not provide specifics.

“We had a pretty significant increase in both unit and dollar sales of Organic Valley products,” he said.

Ragen is now tossing around the idea of making similar product offers digital. The model would allow consumers to “shop” online for deals linking specific green products to EcoUnit credits. Because Ray's doesn't have a loyalty card program, deals couldn't be downloaded automatically to a card. Instead, shoppers would print the offer so that its barcode could be scanned at checkout. Ray's is EcoUnit's only grocery partner.

Another idea is to incorporate a mobile messaging element that would allow shoppers to direct their EcoUnit credits in a convenient way, Ragen explained.

Shoppers would receive a Catalina printout with a message instructing them to text a unique code to benefit one of several projects.

A reply text message could even update for the shopper progress made on the project, observed Liz Gorman, vice president of the corporate responsibility group for Cone, a Boston-based strategy and communications agency.

Such is the case at certified organic grocer and co-op, PCC Natural Markets, Seattle, which started as a buying club where families pooled their money to buy food in bulk and share the savings. Today members pay a $60 lifetime fee (refundable when you retire your membership) to enjoy discounts like a monthly floating coupon for 10% off, and 15% off on purchases made on the 15th and 16th of every month. Non-members can enjoy perks too.

For instance, shoppers who forgo plastic bags, or bring their own cartons for bulk eggs, coffee bags for bulk coffee, jugs for water or recycled cups for brewed coffee can either earn 5 cents per container, or have the money split between two programs. The first is the PCC Food Bank. It provides nutritious bulk staple foods to clients of nine partner food banks. Donations also benefit PCC Farmland Trust, an independent non-profit with the purpose of securing, preserving and stewarding threatened farmland in the Pacific Northwest.

“Well over 90% of our consumers elect to have [the money] go toward the donation,” said spokeswoman Diana Crane.

The program has become hugely popular. The last measurement in August 2009 showed that almost two-thirds (64.5%) of PCC shoppers were using reusable bags, up from 50% in 2008 and 25% in 2007 when the retailer decided to do away with plastic bags.

Today, it offers paper bags for shoppers who forget reusable bags, are new to the store or don't bring enough.

Signs in the parking lot and messages posted at checkout serve as reminders to bring and use reusable bags.