In hopes of getting my garden off to a head start this spring, I recently paid a visit to the lawn and garden center of a local retailer. I immediately noticed a new plant food product manufactured by the company TerraCycle. What drew me to the product in the first place were the containers it was packaged in: repurposed 20oz soda bottles. Since the bottles used were from different brands, there were slight variations in color and shape from product to product, making them stand out in comparison to the homogenous appearance of all the other brands displayed on the shelf.

Hanging from the neck of each bottle was a tag displaying the state the bottle was collected and the first name of the person who collected it, which I thought was an interesting incentive to recycle. The product consisted entirely of organic worm castings, or in laymen’s terms, worm poop, which acts as a natural fertilizer. This plant food seemed to be a textbook example of an environmentally friendly product, so when I returned home I immediately checked TerraCycle’s website to learn more.

The worm castings plant food, TerraCycle’s flagship product, is claimed to be the first product made entirely from waste. The bottles are collected through recycling programs, the spray nozzles are other companies’ leftovers, the worms are fed organic waste, and the final product is shipped in misprinted boxes rejected by other firms. In addition to soda bottles, TerraCycle also collects various discarded yogurt containers, drink pouches, and energy bar wrappers to create products such as bags, pencil holders, eco-binders, and planting pots.

If TerraCycle’s business model is successful we could see more companies utilizing waste as inputs. This suggests a number of business implications:

• Companies could develop new revenue streams by sourcing their trash to others.
• Using waste inputs in the manufacturing process could be an increasingly important component of corporate social responsibility.
• Beyond the personalized name tags used by Terracycle, companies could turn to other methods to personalize recycling and make it more fun. For example, product containers could be labeled with 2G, 3G, etc. to correspond to the number of times they have been reused.

I’d be interested to hear any suggestions our readers have for ways in which companies could use waste to create new products.

Image: lerxst/ boycat (Flickr)

On Monday, our expedition team split up—one team investigated bottom-of-the-pyramid issues, while the other went in search of high-end, luxury retail outlets. As one of us remarked, it’s quite possible that on this particular day our two sub-teams had about the most opposite experiences possible. This dispatch will cover the forays of our luxury group into the Banjara Hills district of Hyderabad, known as the place-to-be for the city’s up-and-coming class.

Our first visit was to a designer clothing store, Le Celebre, which offered everything from tailored Italian suits to custom-created saris and hand-made dresses, many of which would not be out of place on the red carpet at celebrity events.

We also visited a Samsonite Black Label concept store. One of very few such stores in the city, it represents some of the highest-end retail Hyderabad has to offer. (A sales clerk informed us they had only 7-8 customers per day, on average). The store offers a variety of designer luggage, purses, and shoes—one small piece of luggage was one of only two on sale in India (out of around 600 worldwide) and was retailing for more than US $700. This is about a quarter of the median Indian annual income, even compensating for purchasing power.

In an interesting twist, even in these islands of luxury retail there was no escaping India’s infrastructure challenges: all the lights in one store were turned off when we arrived (though the store was open) and the employees turned on the lights for each floor as we reached it.

People seeking to avoid grocery lines may get their wish, wrote Yeleny Suarez, a reporter with South Florida CEO, in a recent article entitled No More Lines. "Online grocery delivery companies such as Miami Beach-based BeachGroceries.com and Garagegrocery.com are meeting that demand and setting up shop in South Florida."

Suarez asked Social Technologies futurist Kyle Spector for his take on the trend. He said:

E-commerce grocery stores will continue to do well selling commodities to urban patrons because time pressure and monetization are two trends pairing up perfectly for e-commerce grocery.

“There are more than 300,000 food products offered in the US. Online grocers can fulfill more niche needs since they can offer more than just what is available in a single store."

Image: (c) 2007 JupiterImages Corp.

What are our futurists reading? The following are some sources that are sparking the interest of Social Technologies' analysts at the moment:

Image: Social TechnologiesJohn Cashman:

• China CEO: Voices of Experience from 20 International Business Leaders, by Juan Antonio Fernandez & Laurie Underwood -- I’ve been slowly picking my way through this fine collection of insights, anecdotes, and advice from leaders of prominent multinationals such as Carrefour, BP, Unilever, and GE. They share their experiences, good and bad, on entering into China’s complex business landscape. The advice ranges from practical discussions on how to choose expatriate staff with the temperament for China (hint: don’t forget the effects of relocation on the employee’s family), to advice on the best strategies for entry into the Chinese market (Go it alone? Joint venture? Strong or weak joint venture partner?), to creating the proper incentive structures for managing Chinese staff (education and training opportunities, rapid advancement, and impressive-sounding titles seem to be a good place to start).

Matt Sollenberger:

• "The End of Cheap Food," in The Economist -- The Economist argues that higher food prices are not a spike but are, in fact, here to stay due to a collection of underlying factors they lump under the term “agflation.” However, the UN's Food and Agriculture Organization and the IMF tell a slightly different story.

Gio Van Remortel:

• “A Lush Business,” by Vitisia Paynich in Electronic Retailer magazine -- Lush founder and CEO Mark Constantine discusses the business approach of his wildly successful soap and cosmetic store. The company uses organic ingredients for its products and also employs a strategy of transparency and interactivity with its customers. The story piqued my interest not only because ethical consumption and transparency are trends that we monitor, but also because a colleague expressed such enthusiasm on seeing the story headline and mentioned how much she loves their store. The article confirms that this type of customer enthusiasm has much to do with their growing success.

Image: Social TechnologiesOver the weekend I had my first positive experience with an automated self-checkout at a grocery store. No starting over, no need for the self-checkout's human helper to pay a visit; the machine accepted cash and distributed change as it should. Perfect. So the use of automation for customer service was something I’d been mulling when I read this story about the proliferation of bank branches in Washington, DC. Apparently, the driver for this is customer service:

In the 1990s, a period of mergers in the financial industry, many banks promoted online services and closed branches. But industry studies showed that customers wanted personal contact when managing their money, and banks began opening more branches in a surge fueled by new players such as Commerce, which models itself as a retail store.

This was surprising for a number of reasons: bank are not known for their service, which tended toward long lines and bored tellers; ATMs have had the ability to perform most banking services since the mid-1980s; and the rise of the Internet has been transformative for the banking and finance industry, allowing customers to go beyond the convenience of ATMs to conduct almost any transaction from the convenience of their desks. Except for opening an account, closing an account, or securing a loan, there is almost no need to go into a bank (and even these services are increasingly offered online).

Many industries would love to harness the cost, convenience, and time savings that the Internet enables, but due to the vagaries of their business sector they cannot. Finance and banking have been able to exploit these savings, only to be undone by user-fueled nostalgia for customer service that, frankly, has never been that great. But the idea of the banker as a pillar of the community and someone one should know, even if he or she behaves like Mr. Potter, is apparently ingrained in the American consumer psyche, along with the “family farm.”

This raises a number of questions for retailers in the digital age: what does this mean for retail in the future? Are there other businesses that will be unable to reduce costs and increase convenience via the Internet because consumer tradition dictates face-to-face contact? To what extent does human contact trump convenience and why? And conversely, where do retailers draw the line between offering human contact and seizing the advantages the Internet provides?

Now, if you’ll excuse me, I’ve got to transfer funds into my checking account. Done!

If you are a frequent traveler, you may have chanced upon one of the iPod vending machines scattered throughout US airports, which I wrote about here last year. I've seen one in the Atlanta airport, as well as in a Macy's in Atlanta (a vending machine in a retail store? It's true!), and there are more in place throughout the US selling the ubiquitous media players and accessories.

Transiting through the Dallas-Fort Worth airport last month I did a double take when i saw another of these huge vending machines tucked off to the side of a terminal. Only it didn't sell iPod. To my surprise, it was a branded machine selling only the cosmetic products of Neutrogena. Selling self-tanning cream in an airport via vending machine seemed a strange choice for an investment of this size, until the singular genius of it hit me. What can consumers no longer take through airport security, besides their dignity? Cosmetics!

For a higher-end, niche brand, it's a smart play. Had to leave that good skin cream at home? Buy one on the go! Can't take the 12 oz. body wash? Get it here, no waiting.

Automated retailing is going through some rapid evolution in the US. From DVD rental and electronics to hot food and now more expensive personal items, vending seems to be finally addressing a fuller range of desires of time-poor consumers.

It's the holiday season, and the aromas of baking, evergreens, wood fires, and even the scent of new things -- clothes, perfumes, candles -- form a part of the overall experience. We relax, feel at home, or just know that something exciting or enjoyable is coming because of what our noses tell us.

As consumers max out on sensory experiences of the eye, ear and tongue, those who wish us to open our wallets have begun to tap the sense of smell -- and the evocative sense memories triggered by aroma -- to persuade us.

The past decade has seen an explosion in the use of scent as a new way of accessorizing the home, bringing aromatherapy from the expensive spa to everyone's bathroom, kitchen or car, to the tune of $4.4 billion in sales each year. That's a lot of smell! Specialist consultants and product developers have emerged to tailor just the right odeur for the moment or location. Newer brands such as Method, as well as resurgent older brands and processes previously used in creation of exotic perfumes, are drifting into the mass market to help us paint a sense picture in our living environments. There is even a film opening at the moment in the US, Perfume: The Story of a Murder, which adds a touch of suspense and drama to the business.

Retailers don't just sell the scents, they use them to soften up the consumer.  According to the Washington Post, toy chain KB Toys has used the childhood smells of Creamsicles and Play-Doh to make purchasing parents think of happy childhoods (there is even a Play-Doh cologne out the for those who didn't get enough of it up their noses as kids). Expensive English shirt tailor Thomas Pink pumps in the smell of linen. Recently, the creators of the "Got Milk?" campaign made the headlines by wafting the smell of freshly-baked cookies into San Francisco bus stops, drawing complaints from environmentally sensitive citizens.

Two trends come  to mind to explain the boom in aroma: the desire of World 1 consumers to personalize their worlds down to the last detail -- to be the architects of their own atmospheres --and of marketers to appeal to higher (or lower) forms of experience to break through the noise and reach consumers where it counts, the hippocampus. Neuromarketing is reaching new heights, and appealing to sense memories by smell is just the next step.

Look for companies to knock on your smell gateway more often as food companies, car companies, real estate agents, hotels, banks and anyone else with a profit motive and scent consultant seek to tap the buyer's deepest urges. After all, who doesn't want to think of a day on the beach or a warm plate of cookies?

American pediatricians are starting to circle the wagons against the growing number of in-store health clinics opening up in malls, big-box stores, and pharmacies across the nation. As described in a recent Global Lifestyles brief on Medical Mini-Marts, these clinics, most staffed by nurse practitioners or physician’s assistants rather than doctors, offer a limited menu of health services—flu shots, vaccinations, strep tests and other cultures, sports physicals, etc.—offered at low cost to walk-in patients. By the end of the decade, several thousand more retail-based clinics will have opened throughout the United States.

Responding to this threat, the December 2006 issue of Pediatrics features a policy statement on retail-based health clinics developed by a special panel of the American Academy of Pediatrics. Among the concerns the pediatric panel cites are fragmentation and other possible effects on quality of care, the lack of central health records for individual patients, problems in identifying and addressing chronic conditions or long-term issues such as obesity, and the possible spread of contagious diseases by bringing patients into a commercial retail environment.

In attempting to defend their turf, however, the AAP ignores a basic fact: For the most part, in-store clinics are not taking business away from pediatricians and other general practitioners. By and large, in-store clinics draw their customer base from two groups: the 46 million Americans who lack health insurance and cannot necessarily afford a $150 doctor’s visit; and insured but time-pressured patients who might be able to afford the monetary cost, but choose to avoid spending the time and trouble of visiting a doctor’s office until a health problem becomes severe. The advantages retail-based clinics offer—low cost, short wait times, convenience, and seven-day-a-week availability—cannot be matched by general practitioners, at least the way most American doctors operate their practices today.

In voicing their concerns, the AAP wrongly assumes that most of the patients who walk into these clinics have the alternative of seeing their primary physician. But 30% of Americans have no primary physician. And given the choice between spending $150 for a pediatric visit, $300 for emergency-room care, or $25-60 at an in-store clinic, those with no primary physician—especially if they have no insurance—would be wise to visit one of these clinics.

A colleague who has used these clinics three times over the past year loves them. He recognizes that they aren’t as good as a doctor’s office, but they offer fast, cheap service without the hassle of insurance and referrals, they are open late and on weekends, and they will refer you to a physician if you need treatment beyond their limited services. (Host stores that value their reputations will make sure that clinics behave reputably in this regard.)

The number of in-store clinics will expand rapidly in coming years. They will open not only in pharmacies, Wal-Marts, and malls, but perhaps in health clubs, gyms, and high-end vitamin stores that want to reposition themselves as wellness centers. Medium-sized employers may join universities, hospitals, and other large employers in establishing their own employee health clinics following the in-store clinic model.

Rather than rail against this rising tide, the AAP and other physicians would be better off examining these clinics to see how they serve their market. Perhaps a change in the way doctors operate their practices—remaining open on some evenings or on weekends, for example—might draw some of these healthcare consumers to their offices.

(Image: Social Technologies)

It was only a matter of time before companies began replicating the real-world retail experience in the virtual world. Recently, American Apparel announced the grand opening of its first virtual store in the online world Second Life.

What I found particularly fascinating about this marketing strategy is the assumed correlations between Second Life users and their avatars, which seems to be the basis of American Apparel's efforts. I wonder how successful marketing to a person's real-world identity will be if it is done through a secondary identity like an avatar. Will something get lost in translation?

I don't doubt that interacting with American Apparel's virtual environment could generate positive feelings for its real-world counterpart. The question is whether or not customers will want to buy clothes simply because they look good on their avatar. Avatars are a form of personal expression that may have little relation to who we are in the real world. Just because I like the way my avatar looks in sequined hot pants doesn't necessarily mean that I want to go out and buy a pair to wear out on Friday night. 

If you really think about it, virtual identities pose all kinds of problems to virtual marketers. How do you market to an avatar when the real-world user doesn't match the demographic you're aiming for? What do you do when the real-world user is of a different gender, age, or race than what is implied by their virtual form? Now take it to the next level; when Thorzaxk, a sexually ambiguous six-armed quadruped stops buy your virtual store, what are you going to try to sell to him/her?

I imagine that some of these issues could be addressed by virtual sales people, but addressing someone's real identity through their avatar could be considered rude. People participate in virtual environments to escape the real world and to be entertained. By dispelling the illusion you might end up alienating the customer.

(Image: Social Technologies) 

Technology blog Gizmodo reported on an expansion of Zoom Systems, a vending machine company, into sales of Sony consumer electronics--basically a vending machine for MP3 players, headphones and other accessories, in airports in California, Colorado and Atlanta. "Wow," you say. Well,  it's not their first foray into this arena. As astute viewers of our Visual Indicators feature of ChangeWaves will note, Zoom has been putting vending machines selling iPods and accessories into airports for several years. I captured the shot of one in the wild, shown here, as I passed through the Atlanta airport last year.

This new frontier in retailing is an indicator of a number of trends:

• The falling cost of consumer electronics, to the point they can be easily stocked and sold remotely in this fashion.
• The related sense of disposability of not only the accessories, but the more expensive products themselves.
• The enormous accessory economy that has emerged around these devices.
• The need to extend the brand of leading companies in this sector (in this case, Apple and Sony), possibly in defense against the falling perception that consumer electronics brands matter to purchasing consumers.

This style of retail provides an interesting counterpoint to another push in the consumer technology industry--the move to open "experience stores," where consumers can not only see but feel and interact with technology concepts and designs that may be slightly ahead of their expectations. This, too, is a move to protect and project brands, but is more focused around helping consumers imagine how new technologies fit into their lives, or not. More and more companies are being pushed in this direction, even as automated vending expands at the bottom of the marketplace, more evidence of polarization of consumption patterns.

(Image: Social Technologies)