The informal retail sector accounts for nearly 40% of all retail trade in sub-Saharan Africa, yet it has generally been excluded from sustainability discussions.
However, this dynamic market is innovating to meet the demands of its consumers, especially when it comes to filling increasingly tight pockets.
From loosies (simple cigarettes) to small, one-tablespoon packets of sugar, coffee, atchar, candy and more, retailers are finding a way to separate manufacturer packaging to meet consumer needs. In South Africa, paraffin is sold in large blue buckets in repurposed soft drink bottles provided by spaza owners, and cooking oil follows a similar pattern in East Africa and Southeast Asia. East.
At the same time, a large amount of packaged goods sold in these communities end up becoming packaging waste. Small packaging or sachets have little value to offer waste pickers, even if they are recyclable, leading to increased waste volumes. A lack of municipal services in these communities often means waste accumulates and ends up in waterways. Plastic waste is therefore much more harmful at the bottom of the pyramid than at the top.
The market opportunity to provide low cost distribution solutions exists. It solves both a sales growth challenge and a packaging reduction challenge. The challenge is how to operationalize it.
Smollan (https://Smollan.com/) and product design consultancy, dy/dx digital (https://dydx.digital/) created the Smart fill dispenser (https://Smartfill.store/ ) in order to seize this opportunity. Through many iterations, smart dispensers in the spaza market have been proven to not only increase sales volume by offering small pack sizes, but also to provide valuable data on how much consumers are purchasing the branded products when they have the choice.
By offering low purchase volumes that cannot be manufactured at scale at an affordable price, brands can tap into new customers and new uses.
“At Tembisa, we have increased sales by more than 400% and the number of purchase transactions by 450% per month,” says Marc Wetselaar (marc@dydx.digital), COO of Smart fill. “People turned to distributors and easily understood the concept. Packaging was not an issue as we supplied dry goods and customers used paper bags for their purchases.
While technology is a key ingredient, it’s only part of the solution, says Michael Smollan (https://bit.ly/3cU7h42), chief growth officer at Smollan.
“Smollan has been increasingly focused on our sustainability and how we can support our customers in theirs,” he says. “Smartfill is part of our solutions offering to help brands transition to more environmentally friendly packaging options while growing their business.”
As brands seek continued sales growth and address packaging waste issues, the answer may well lie in informal commerce.
