No More Bottled Water in T.O.; Pay 5 Cents for a Bag

While this is a technology blog by definition, I couldn't help but discuss the City Council's recent decisions to ban bottled water in Toronto, and to charge grocery shoppers $0.05 for plastic shopping bags. Are these good steps toward a better, more environmentally-friendly society?

Let's look at the water issue first. Before you bottled water-aholics go nuts, you will still be able to buy bottled water by the case or individually at grocery stores and some other locations. Where you won't be able to purchase it is in city facilities. This mean concession stands, vending machines, school cafeterias, subway shops, convention centres, etc.: essentially any spot owned by the city. It'll take 3 years for the ban to come into full effect as the city works to ensure that tap water is available wherever the ability to buy bottled water is removed.

"Bottled water's 15-minutes are up," says Joe Cressy, Campaigns Co-ordinator for the Polaris Institute. "The marketing scam is out of the closet, and it's time to go back to the tap."

I'll be the first to admit that I buy bottled water all the time. Will taking it out of city facilities help, though? People that go to the gym need something to hold their water; but they could just re-use their own bottle, filled up with tap water. True, a group gathering for a sales meeting in a convention centre don't want to raise their hands and head out to take a drink from the fountain whenever they're thirsty either. But why not have a jug of tap water and glasses/cups available to attendees? Ironically enough, a Toronto Star report cites one Councilor as stating that a water ban in theatres like the Sony Centre could force workers to give away water in plastic cups. How is that helping the environment if we're still using plastic?

(As an aside, if you're a fan of the flavoured bottle water concoctions like I am, these are not included with the ban. "Toronto City Staff defined bottled water as water that is bottled and re-sold without added flavouring," Cressy tells me. "Though," he adds, "we are continuing to liaise with the city to strengthen this definition to include flavoured water."

Now, what about the bags? Grocery stores like Price Chopper have been charging a nickel per bag for some time now. But we'll see this in every store starting June 1, 2009. Is this fair? The city calls plastic bags "throwaway" items. I don't know about you, but I often save the bags and re-use them for other purposes: transporting stuff from one place to another, accumulating garbage if I've run out of dedicated garbage bags, etc. If I use one to bring something to work, for instance, I'll often stuff the bag into a drawer in our office kitchen where someone else might pick it up one day and use it once again for another purpose. I don't see plastic bags as throwaway at all! In fact, I probably use them more than I'd use a cloth bag! So why am I paying for the supposed actions of others?

On the other side of the fence, though, an extra 50-cents per shopping trip (assuming you'd use about 10 bags) isn't a major concern. And if it will help the environment in any way, so be it. The LCBO has already gotten rid of all plastic bags, only offering free paper bags, or cloth bags for $0.05 each. It's inconvenient when I have to lug a couple bottles of wine held to my chest instead of hanging from my fingers in plastic. But in the grand scheme of things, it's not a huge deal.

BUT: the main concern is where will that money go?

Happy Black Friday...Or is It?

As our neighbours south of the border roll out of bed with their bellies full of turkey and all the trimming, many will surprisingly still find the energy to get out there and shop today, known as Black Friday.

Historically, Black Friday, the day after the U.S. Thanksgiving holiday, is one of the busiest shopping days of the year, when retailers bring out the big guns, so to speak, with amazing deals and discounts. But it's more important than you might think, often determining a company's profitaiblity for the entire year. Some speculate that Black Friday could account for as much as 50% of a retailer's yearly profits! With the economy in the current state that it is, there's no doubt that many are crossing their fingers that shoppers will come, and that this year won't be a disappointment.

The National Retail Federation (NRF) has relatively high hopes for the day: while the organization is not expecting record-breaking numbers, it does anticipate a 2.2% growth in spending. Not exactly a very healthy increase (in fact, it's the lowest it has been in years), but it's better than one might expect given the financial crisis.

A preliminary NRF survey forecasts that up to 128 million people will be shopping today, and into the weekend. 49 million of these are definitely putting on their shopping shoes, while the remaining 79 million are waiting to see whether the "deals" are worth the trek into the city. Last year, 135 million people said they would go shopping on Black Friday weekend.

Interestingly, the NRF, like many other research companies, points to the falling gas prices as positively effecting the retail landscape. People perceive the savings on gas as some extra money in their pockets. Still, the defining factor on consumer's minds this weekend is price, price, price. So good deals are more important than ever.

"Shoppers who held off on buying a DVD player or winter coat over the last few months will find that prices may literally be too good to pass up," explains Tracy Mullin, President & CEO of the NRF.

Hopefully, Mullin is right.

It doesn't end on Sunday, though. Since the Web has become such a dominant force in the retail industry, the Monday following Black Friday has been coined "Cyber Monday", where at-home shoppers can take advantage of deals online. The advantage here is, of course, the ability to avoid the thrill and confusion of packed sales floors and long line-ups. Shop.org finds that more retailers will be offering Cyber Monday promotions this year than they did last year (83.7% vs. 72.2%).

Official Black Friday results won't be released until 4 p.m. this Sunday. But already, many local news outlets are reporting healthy turn-outs, with people waiting in lines from the early morning hours.

Still, we won't know how the retail industry has fared until the mass hysteria is over, the inventory has been accounted for, and the receipts tabulated. More than ever, this weekend is critical for the U.S. retail industry: it could, in many ways, make or break a retailer.

Gift Cards Could Suffer From Economic Woes

I received an e-mail today - one of those forwarded chain notes I often get. It supplied a list of retail stores, and warned recipients not to purchase gift cards as Christmas presents from these companies because they have announced plans to close up shop by January 2009. This got me to thinking: will gift cards, a typically popular holiday gift, suffer in wake of the current economic climate?

An Ipsos Reid study conducted around Christmas-time last year found that 88% of respondents like receiving gift cards. In fact, 72% would rather a gift card than an actual gift! I don't think these numbers will drop this year simply due to fear that a store might close, but if e-mails like the one I received continue to circulate, it might just scare people off from buying gift cards.

The whole idea of a gift card is that the person can buy something they want. While it replaces an actual gift, what I've often found is that you end up spending more money than you otherwise would have with a gift card. Now if the recipient ends up getting nothing from the card because the company went out of business (a horrible experience: trust me, I've been there!), you've now both disappointed the person and lost a whack of money.

Will you be buying gift cards this year?

As an aside, I thought it funny that the most often-requested gift item I've heard over the past few months from family and friends is in fact a gift card, but of a specific kind: a gas card! You know times are tough when filling up your car becomes a luxury!

Lowe's Brings More Competition to Canadian Retail Sector

Lowe's official entrance into the Canadian market today spells more competition for the Canadian retail sector: not only in the home improvement category, but also with products like appliances, for which many CE and big box stores are involved.

Three stores opened today in Brampton, Hamilton, and Brantford, ON; and there are plans to open a Toronto store in late January. Lowe's says it hopes to open 100 stores in Canada in the near future.

In an effort to up the ante when it comes to customer service, Lowe's Canada plans to do things like open additional cash registers the instant there are more than three people in line, says National Post. If you happen to have caught one of the retailer's latest TV commercials, you'll also see that it plans to position "call" buttons throughout the store. Press one, and a salesperson will immediately come to your rescue. (Yah right - I'll believe it when I see it!) Other efforts Lowe's is undertaking in order to entice customers include having more employees on the floor, and having more products and special order items.

Lowe's not only poses additional competition to big box, home improvement, and appliance retailers. But because the company also offers installation services, custom A/V specialists might find themselves crossing paths with a Lowe's installer every now and then.

The important thing to note is that, even though Lowe's isn't specifically in the consumer electronics marketplace, the retailer will pose new competition for the consumer's disposable bucks. Am I going to buy and install a new plasma TV, or get that kitchen renovation I've been dying for? Not to mention that, should the retailer follow through with its customer service promises, there will be a new level of shopping satisfaction to live up to.

Meanwhile, direct competitors like Home Depot are likely revising strategies to more effectively compete against this new entrant in the Canadian market.

Online Buying Poses More Competition for Retailers

Consumers Reports says that people are happy to buy electronics online, from small purchases like digital cameras; to even big-ticket items like flat-panel TVs and computers. As if Canadian retailers didn't have the issue of the declining U.S. dollar to deal with this busy holiday shopping season; now they have to contend with potentially increased competition from the online realm.

Some traditional bricks & mortar retailers, like Future Shop and Best Buy, offer their own online shopping components which lets them play in both ends of the game. But smaller independents that don't might find themselves fighting even harder for customer's bucks.

Interestingly, 75% of the survey respondents said that one of the reasons they chose to shop online instead of at a local store was to avoid the irritating pitch for an extended warranty. Other reasons were supposedly better prices, and better product selection.

Amazon.com led on the pricing front; while Crutchfield.com (which just entered the Canadian market a few months ago) scored top ranks for customer service. Customers also enjoy things like online sales advisors that can help with a "virtual" purchase; and product reviews from other customers. Another factor that helped take these two online retailers to the top: they both accept returns.

Despite the increased interest in online retailers, traditional bricks and mortar stores are still being visited, most often for "major electronic purchases". Customers often desire face-to-face communication; and of course convenience also plays a factor: many don't want to wait for an item to be delivered.

When it comes to the in-store experience, local independents ranked first overall, with the highest scores relating to customer service, and speedy checkouts.

RFID: Tag, You're It!

Imagine walking through the grocery store, filling up your buggy with a week’s worth of goodies, then simply pushing the buggy over a sensor and voila: your total pops up on-screen instantly. Pull out your debit or credit card, punch in the digits, and off you go. No nasty line-ups. No price-checks. Is this possible? Sure it is. Ever heard of RFID?

RFID stands for radio frequency identification, and is essentially the future of bar-coding. Each RFID “tag” contains a microchip and tiny radio antenna that can be attached to products to transmit a unique, identifying number to an electronic reader. This reader in turn links to a computer database where information about the item is stored. There’s no doubt that RFID offers many advantages over typical bar-coding. It does not require line-of-sight in order to scan an item; multiple items can be scanned at a time; and information can be read, written, and stored digitally.

RFID can mean greater convenience for consumers at the check-out, but it also has advantages for businesses. Think of RFID as a virtual consultant that can analyze business practices, than advise what can be done differently in order to better save time, money, and resources. If you can account for every pallet of product, or even each individual item, at all times throughout the supply chain, imagine how easy it would be to pinpoint where improvements can be made! Is your distributer taking too long to deliver product? Is inventory not being properly recorded? Is staff taking too long to find the items they need? In some of Hewlett-Packard's implementations of RFID, the company found that staff spent 1/3 less time simply looking for things they couldn’t find.

An RFID pilot was conducted recently in Canada’s grocery industry, and the results were promising. The grocer was able to track where each box of product was at any given time, and understand inefficiencies in the process. For instance, product was ordered when inventory was already in stock; boxes were taken off pallets and put right onto the floor; and items weren’t being shelved, even when they were available. A recall was simulated during the pilot, and it took the system just five minutes to locate where every single box of that particular product went: this process would typically have taken days!

“There is no system today that allows you to get such a granular level of data and feedback,” explained Shai Verma, Director of RFID at IBM Canada, during a summary of the pilot at the 2007 Wireless and Mobile Expo in Toronto. “[RFID] decreased out of stock issues to zero.”

Verma also gave some great real-world examples of RFID implementation: the Great Wolf Lodge in Niagara Falls, an indoor water park, uses RFID bracelets in place of hotel room keys; while Pfizer Pharmaceutical Co. has equipped every bottle of Viagra with an RFID tag to confirm its authenticity.

Of course, there’s still a lot of work to be done in order to fully deploy RFID. For one, it is highly expensive. Who will incur the costs of each tag? The manufacturer? Distributer? Retailer? Will the price of products be increased to compensate for the cost of tracking them? Also, what level of RFID is necessary to each business? Do you really need to tag every single item in a box? Each box? Or each pallet of boxes? How sophisticated a system does one need? Is theft a major concern, or a minor one? Does one use passive RFID, which can only track within a limited distance; or active, which can track a product through much farther distances? These are all questions that need to be answered by all parties involved in order for companies to confidently take the leap toward RFID.

“Eventually, the potential of RFID will be realized,” said Verma. He predicts that 2009 will be the year of RFID.

Even so, future RFID developments are already in the works. According to Victor Garcia, CTO at HP, the company is working on what it deems to be “second generation” RFID. Called Memory Spot, this 1 x 1 mm chip will have a CPU built right into it that can store up to 2 MB of data, and will be 15,000 times faster than current chips. Each chip could essentially store a product’s “DNA”, including things like set-up videos, photos, schematics, and specifications.

It sounds like it’s straight out of a movie, but believe it or not, technologies like RFID are the way of the future.