Loop’s Innovation through Accounting

Feb 16, 2019 | Strategy

Without profit, the business ceases to exist. How do you know whether you’re operating at a profit or loss relies on a thorough and accurate accounting strategy customized to your unique business. The specific way in which brands organize & classify their revenue and expenses can make a significant impact on the strategy decisions business leaders make, particularly as their business, and reliance on business metrics to track results continues to grow. While the common strategies in the past are often the safest choice moving forward, some companies are taking a new look at their accounting strategy to deliver PR wins and improvements to their customer’s experience. Announced this year at Davos, Loop is a project undertaken as a combined effort from some of the world’s biggest companies and intends to replace single-use packaging with reusable containers.


Why Loop, Why Now?

Driven by the challenge of delivering the best quality products for the best price possible, these companies have increasingly shifted to cheap, single-use plastic packaging for their products. Through their packaging, Pepsi, Nestle, PNG, Mars, & Coca-Cola, among others, are now facing a PR disaster as their packaging creates an unwelcome billboard for short-term decision making in landfills & oceans around the world. Loop is set to change that.


How Does Loop Work?

Driven by the explosion in demand for subscription & delivery services, Loop plans to benefit from numerous innovations already tested by ventures like Amazon Fresh. Similar to the Amazon Fresh Reusable Totes, Loop plans on offering major consumer products in reusable packaging. Consumers pay a deposit for the packaging and get the deposit back when the packaging is returned. According to Engadget, deposits currently range from $0.25 for a bottle of Coca-Cola to $47 for a Pampers Diaper bin. Each product also comes in a custom-branded container, which utilizes materials such as stainless steel and glass. When you’re done with an item, you just toss it back in the tote for collection. It’s then sent to a cleaning and sterilization facility to be refilled for another customer. Meanwhile, your next order is automatically triggered for delivery (if you’ve set it to do so). While this offers companies an economically and logistically viable solution to their plastic-packaging problems, investing in reusable packaging also allows these companies to treat their packaging like an asset instead of a cost, and will enable them to spread their investment in packaging over multiple years.


how loop reusable worksIs this an Innovation?

At the surface, these “innovations” are not inherently new. For example, as CNN points out, we gave up reusable milk bottles in favor of the disposable plastic containers we use today-

It’s the early 1960s. Girls are fainting over the Beatles, Sean Connery is James Bond and a revolutionary trend is sweeping the United States: Plastic.

Plastic is about to have its breakthrough moment in the food industry. The plastic milk jug, specifically, is on the brink of taking off: the “market potential is huge,” the New York Times correctly notes.

To American families, a third of which are still getting their milk from a milk man, plastic is a wonder package. It’s lighter than glass. It doesn’t break. Unlike paper cartons, it’s translucent. You can see how much liquid is left in the jug. With a plastic container, everybody wins.

Except for the milk man. And, as it would turn out, the planet.

However, while the idea of reusing packaging is not new, Loop’s creative approach to classifying the packaging as an asset creates the financial justification for a much-needed Marketing & PR solution, which makes it an idea for small business owners to take a second look at. Procter & Gamble’s has stated they are increasingly seeing customers demand more environmentally-friendly packaging. Loop provides these companies and their stakeholders the vehicle to get there by challenging the idea of ownership over the packaging, similar to the way Uber and AirBNB have changed the concept of ownership of cars and houses. By classifying the packaging as an asset that the company owns, Loop creates innovation in the way companies approaches their packaging- Instead of optimizing for the lowest cost solution in the short-term, brands can shift their perspective towards a long-term approach.


What it Means for You

Whether Loop is successful with their ambitious plan or it fails to launch, their approach can provide a few key insights for small business owners. By understanding what your customers want, you can re-orient and adjust aspects of your service. Loop chose packaging, providing an alternative to a significant PR campaign that may or may not yield results. However, your business might create an impact in a different area. Service-oriented businesses might consider how their traditional cost centers, like technicians and customer service, could provide more value to the customer and increase revenue overall. From offering a different product to engaging your social media communities, there are numerous solutions to deliver value, the best of which changes over time and with your customers.

loop reusable packaging cloroxWhen to Expect Loop’s Launch

According to the Chicago Tribune, “Loop is slated to launch this spring in New York, New Jersey, and Pennsylvania, and also in Paris and some of its suburbs. Shoppers will be able to buy Zero-Waste products from the Loop website to be delivered to their homes in specially designed shipping totes, and, eventually, at participating retailers, such as Carrefour grocery stores in Paris.

Loop intends to expand to the U.S. West Coast, Toronto, and the United Kingdom by the end of this year or early 2020.”


Learn More about Loop

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