Colruyt Group (a Belgian retailer) introduces reusable bags
Colruyt Group (a Belgian retailer) introduces reusable bags for fruit and vegetable purchases (from bulk). The company eliminates disposable bags from its stores; shoppers can buy the reusable bags if they need a bag.
However, Colruyt provides 2 reusable bags for free to its Xtra loyalty program members. The loyalty program has around 5.1 million members and the cost of one reusable bag is $0.3.
• What is the maximum cost Colruyt has to bear due to its initiative?
Colruyt classifies its loyalty program members based on two criteria: activity and responsiveness to special promotions. The distribution of the members is as follows (based on long-term historical data):
Designation
Active member
Passive member (l.e., did not
purchase anything in the past
3 months)
No reaction to any
promotions
7%
31%
React to big promotions only
24%
16%
React to every promotion
20%
2%
• Assuming that this is a big promotion what is the estimated cost of the promotion (use Excel for calculation)?
Colruyt started to roll out the initiative in eight pilot stores. Response from loyalty program members can be seen below.
Store
Number of loyalty program
members connected to this store members claiming the 2 free
Percentage of loyalty program
reusable bags
8,210
53%
12
9,824
57%
3
7,211
48%
4
8,935
74%
5
9,367
65%
12,698
79%
7
11,325
68%
18
9,601
47%
• Based on the results of the pilot, should we expect that the percentage of loyalty program members responding to this promotion will change from the historical average (use Excel for calculation)?
