Decentralized Ecosystem Directly Connecting Grocery Manufacturers and Consumers
Exerting buyer power is natural when not abused.
It is understandable that any industry participant would seek bigger volumes as a tool for negotiating better prices. But retailers push the limits of what is fair. Grocery retailers are perpetually and aggressively extracting better terms from already squeezed manufacturers, going far beyond the benefits a player should receive for attaining economies of scale.
Large or small, no manufacturer has enough power
Global constituents, such as Procter & Gamble, Nestle, and Unilever, do play a role in the industry and have more negotiating power than small manufacturers. Still, these companies simply are no match for the extensive control retailers have on end-customers throughout the supply chain. For example, Wal-Mart’s sales are approximately 5 times greater than those of its largest supplier, Procter & Gamble. Wal-Mart 5 accounted for 16% of Procter & Gamble sales in 2016.
Retailer buyer abuse extends beyond normal pressure.
The explanation of this pressure is abuse of buyer power. Such power allows retailers to determine what will and will not be stocked, and on what terms, such as sources, quantity, quality, delivery schedules, packaging, returns policy, and above all, price and payment conditions. Indeed, a supermarket company wields an important bargaining chip, namely the threat to stop selling one or more products.
Evidence of retail power abuse
The Competition Commission in the UK, for example, did find that major retailers enjoy a price advantage that exceeds the cost difference. Additional departures from proper retail conduct included: delaying payments to manufacturers beyond the terms in the contracts; and changing quantities or product-quality specifications at less than three days’ notice, and without paying compensation to manufacturer. The figure below offers specific evidence of retail buyer power abuse and lack of adherence to codes of conduct, which was covered in various news outlets.
SUPPLY CHAIN INEFFICIENCIES
High distances between manufacture and consumption.
The average meal in the US travels about 1,500 miles to get from farm to plate. This problem is relevant for many countries and leads to acute financial and ecological consequences with significant adverse impact in the long-term. Food miles, the distance food travels from the place it has been grown to where it is ultimately consumed or purchased, increase significantly when buyers import food from other parts of the country, region or world.
Waste in various areas of the supply chain.
In distribution centers and on grocery store shelves, food is being wasted. Every night, some perishable items must be thrown out. According to a recent survey, 400 million pounds of food is served by supermarkets, yet nearly a third of it is wasted annually. Unfortunately, current retail systems are designed to reduce stock-outs rather than measure and manage food waste. Therefore, managers optimize to ensure food is left over on the shelf.
INS will decrease food miles, enabling consumers to unimpededly access local manufacturers, including farmers. INS will implement the effective "pull" system to reduce inventories and out-of-stocks that would decrease the food waste.
Grocery manufacturers spend up to 17% of their sales on trade promotions. Trade promotions comprise a growing category of manufacturer expenses directed to wholesale and retail distributors rather than to consumers. Manufacturers spend more than $500 billion on trade promotions annually , and according to some reports 66% of that spend generates negative returns and leads to higher grocery prices.
INS is targeting to replace trade promotions with a more personalized, direct and efficient marketing, thus driving grocery prices down and facilitating the effective direct interaction between manufacturers and consumers.
DEMAND AND SUPPLY DRIVERS
Consumers are becoming increasingly time-starved. The rapid growth in online grocery retail can be attributed to various factors such as demographic profile of consumers, number of working women, good internet connectivity, rising usage of smartphones, convenience, etc. Traditional in-store buying of grocery is becoming more cumbersome given the fast pace of lives, especially in urban areas. Moreover, buyers are overcoming the biases of wanting to touch and see food and grocery products before buying. Consumers, pressed for time, are looking for options which offer increased convenience and save time. Online grocery buying offers exactly that and hence is gaining popularity across consumer segments
Demand drivers
- On-demand economy expectations
- Time-starved lifestyle in large cities
- Worsening traffic conditions
- Growing smartphone usage
- Growing middle class in large urban areas
Supply drivers
- Advent of mobile technology
- Automated fulfillment solutions
- New marketplace models that require less capital expenditure
- Crowdsourcing economy driving affordable, quick delivery
ROADMAP
INS roadmap involves many different aspects, such as technology development, operational infrastructure installment, signing partnerships, and launching marketing initiatives. The preliminary roadmap is presented below. Dates and activities may be subject to change.
TOKEN SALE
Start date: 11:00 AM (GMT) on November 27, 2017
Payment methods: BTC, ETH, LTC, DASH, USD (bank transfer)
Target: 150,000 ETH
Soft cap: 30,000
ETH Hard cap: 200,000 ETH
Token exchange rate: 1 ETH = 300 INS tokens
Total token supply: 150,000,000 Min purchase: 0.1 ETH Bonuses:
More Info
Website : https://ins.world/Whitepaper : https://ins.world/INS-ICO-Whitepaper.pdf
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Author : mriansa
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