These days everyone is talking about how the Internet of Things, RFID and Smart appliances will revolutionize our day-to-day lives. Smart refrigerators promise to someday soon be able to identify the items inside them. Your refrigerator could identify that you have a gallon of milk that is past its expiration date then submit a request to a nearby retailer to deliver a new jug to your house. The goal is a completely optimized supply chain that senses when you are about to be “out of stock” in a household item and auto-magically replenishes it.
One big opportunity that has gone overlooked thus far with the Internet of Things is trash. Yes, that’s right the stuff you throw away. There is a tremendous amount of useful data that could be collected from household waste that could create new business models for corporations and improve people’s quality of life.
Consider the vision I described above – all your important household items are always in stock in an effortless manner that requires no action by the consumer. The smart refrigerator would fall short of delivering on this promise. Only a percentage of your important household items are stored in a refrigerator (or freezer). Half of your food is stored at room temperature in a pantry or other location. And what about all the non-food items that your household needs to keep in stock – diapers, batteries, cosmetics and razor blades? The smart refrigerator would have no insights on the status or availability of these items. But a smart trash can would! In fact, a smart trash can would be able to identify everything your household has consumed (and disposed of).
Think of the data that waste management companies could collect if we had smart trash cans:
- Items consumed – which SKUs were consumed and therefore possibly need to be replenished in the coming days or weeks.
- Duration of use – for repeat purchases, you could identify how long it takes a household to consume a 24-pack of soda or a 36-pack of toilet paper.
- Consumer demographics – could be derived by matching the neighborhood of pickup with third party databases that analyze income levels and other demographic data.
- Market basket analysis – can assess all the brands and SKUs that a particular household buys.
Forecasting demand for consumer staples like diapers, soft drinks and salty snacks has remained one of the top challenges in the supply chain. Companies either produce too many of a particular SKU or not enough. In cases where there is too much inventory retailers often have to discount the items considerably to sell them. In cases where there is not enough supply to meet demand, retailers (and their suppliers) lose out on sales and possibly longer term relationships. In many cases the consumer simply doesn’t purchase the item if it is out of stock. But in other cases the consumer may select another brand or visit another store to buy the item, which could lead to longer term behaviors such as switching brand preference.
What would the waste management companies do with the data they collected? One option is that they could sell it to manufacturers and retailers who are trying to predict what consumers are going to buy next (i.e. future demand).
Another approach would be to not resell the data to any third parties, but to use it to benefit the customer directly. What if the same company that picked up your trash also delivered your groceries? Here is how it could work.
Items detected in your trash can (or recycling bin) could be automatically identified then transmitted to the garbage truck upon pickup at your house. A replenishment algorithm could review your list of “always in stock” items to determine if the item should be replaced immediately. If yes, then a home delivery provider might visit a few hours later to drop off new supplies on your doorstep.
Should Amazon Fresh be extended to include Amazon Trash? Should UPS or FedEx partner with a waste management company? Will Walmart, Safeway and Kroger begin giving away free kitchen trash cans to consumers just to collect data and be optimally positioned for replenishment orders? It is soon to tell, but my guess is that we will see a business plan for smart trash cans emerging on Kickstarter in the next few years.