The Refill Model: Reduces packaging volume & increases customer loyalty

Photo source: “Algramo home delivery” by NestlĂ© is licensed under CC BY-NC-ND 2.0

The Refill Model: Reduces packaging volume & increases customer loyalty

Thomas Reiner | 19.03.2021

Algramo’s contactless refill vending kiosks allow consumers to purchase staple foods, hygiene and personal care products by the gram, using resuable packaging. The refill model promotes circular economy, reduces packaging and is a smart marketing tool for long-term customer loyalty.


 

Consumers in New York can buy hygiene and personal care products “by the gram” at Algramo’s contactless vending kiosks. Special, digitally applicable reusable packaging is used. Each of the refill containers contains a chip that is networked with the customer’s account and registers all purchases. Payment can be made either conventionally or via an app.
The digital transformation of the model not only allows efficient measurement and control of product demand and vending machine filling. It also provides a smart marketing tool for long-term customer loyalty. Algramo’s project is another example of how digital transformation is becoming a driver of circular economy. In addition to reducing the amount of packaging, it also offers sustainable benefits that can provide answers to social issues.

Refill and reusable for social sustainability
Back in 2012, start-up Algramo launched contactless vending kiosks in its home country of Chile, where consumers could buy staple foods by the gram. With the model, Algramo addressed the so-called “poverty tax,” which forced economically disadvantaged consumers to resort to small product sizes because the money in their wallets was not enough for bulk and large packs. As a result of higher expenses for logistics and packaging, the poor segment of the population paid up to 40 percent more for the same goods.
Algramo’s vending machines countered this disadvantage. Consumers could now buy as much or as little of everyday goods as they needed – from rice to detergents – without incurring the usual additional costs. Algramo now says it is represented in more than 2,000 family stores, reaching more than 325,000 end customers in Santiago de Chile.

Refill and reusable: digital tool for marketing and circular economy
Now Algramo is rolling out its model via pilot projects with refill machines in New York City. In keeping with the current pandemic, the company is offering hygiene and care products from Colgate Palmolive, Clorox and EcoLogicSolutions in its contactless vending kiosks. But even if the target group is different, the financial and environmental benefits are the same.

Algramo shows how to drive the establishment of the circular economy and reduce the volume of packaging, while creating cost benefits for consumers and even addressing social issues. Last but not least, the digitally applicable reusable refill packaging creates a smart marketing tool that scoops up individual data and creates new opportunities for long-term customer loyalty.

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