Following the success with its first pilot, discounter Lidl is expanding its test of “smart” refill machines for POS in the UK. In combination with “smart” pouches, customers can now buy refill laundry detergent in two more stores. The project is further evidence of how digitalization is becoming an “enabler” for increased efforts towards a sustainable future. And they are another example of refill systems that, together with deposit and reusable solutions, benefit from the mega issues of circular economy, climate protection, and sustainability. In the long term, we will see such solutions across the board. This offers enormous opportunities for companies in the packaging industry.
Lidl installed its first Algramo refill machine with “smart” Formil pouches in its store in Kingswinford, England, at the end of April 2022. The pilot ran for six months – and consumer feedback was very positive, according to the company.
- For example, 97 percent of users said they would recommend the system to a friend or colleague.
- 88 percent planned to continue using it.
- Now Lidl UK extended the trial to its stores in Swadlincote and Lichfield.
The “smart” machines
- The compact machines are a development of Chilean startup Algramo.
- They are placed on the shelf and have a footprint equivalent to 66 standard disposable Formil bottles. Their filling capacity is equivalent to 245 refill bags, according to Lidl.
- An “automated touchscreen experience” on the machine guides consumers through the refill process, which includes the ability to churn out the desired detergent.
- In combination with the “smart” bags, the refill machine can distinguish between new and reused refill bags. In this way, Lidl can offer consumers a 20 pence discount from the second refill.
The “smart” pouches
- The lid of the Formil bags contains a special chip for communicating with the refill machine.
- Also integrated into the lid is a technology Algramo calls “closed-fill.” It allows consumers to fill the pouch with the lid on. This saves time and reduces the risk of contamination and spillage.
The advantages of the system
Lidl lists a number of benefits of its “smart” refill system:
- Cost: Customers save 20 pence per refill compared to the equivalent disposable product.
- Sustainability: using the “smart” refill pouches saves 59 g of plastic per refill, which is equivalent to the weight of a corresponding disposable bottle. Lidl also talks about minimizing the CO2 footprint and water consumption.
- Efficiency: for customers, the trial version is Lidl’s fastest refill solution to date. For retailers, the machine’s small size optimizes shelf space. For logistics and transportation, there are efficiency benefits because the detergent is transported in bulk packaging.
- Insights: Via the new technology, Lidl and Algramo can track how often each bag is refilled and how much packaging is saved by the trial.
Digitization & sustainability
Lidl’s approach is commendable and a step in the right direction. It is representative of a number of current developments.
- Digitization is showing itself to be an enabler for sustainability.
- Refill solutions are among the biggest trends we are seeing in terms of closing the loop in retail and FMCG.
- Refill, deposit and reusable solutions are on the rise. In our opinion, these systems will become widespread in Europe in the future. They pay off in different ways in terms of climate, circular economy and sustainability goals and meet with a high level of acceptance among consumers.
Opportunities for industry
We will see more concepts of this kind. For companies in the packaging industry, this presents enormous opportunities. That’s because the need and demand are foreseeable. Those who are smart are already positioning themselves accordingly. However, one should not take much time with this…