idea #039: Genericx
Immediate charitable donations when buying generic products. From anywhere. For anything. Intrigued?
So this is a half-baked idea, but I'm still going to launch it out there. Apologies for more stream of consciousness than usual!
The general concept here is capturing the price spread between brand name and generic products (no matter what they are), and turning that into a charitable donation.
For the consumer that irrationally prefers brand names, particularly pharmaceuticals, Genericx would offer an identical product for around the same price. The kicker is when you purchase the Genericx product, it will automatically convert part of your purchase into a charitable donation. For example, let's say a bottle of Tylenol costs $4.00 and the CVS brand is $3.25. Genericx would then offer an option priced pegged against both of these, using some behavioral economic pricing strategy. For this example, let's pretend that's $3.93. Now typically that would push the consumer to the other options, but Genericx gives the consumer easy, daily access to social impact and a tax incentive (albeit a small one). The governing hypothesis being the combination of price and philanthropy would be compelling enough for a consumer to either a) spend a bit more for charity, or b) switch from a brand name to save money and make a charitable contribution.
We've seen that a brandless (pun alert) identity can actually work. Brandless gets halfway there (or all the way there considering their ~$1BN valuation and SoftBank mooolah). They are curating their own sourced and packed products, and even give a percentage to charity, but it doesn't solve the accessibility issue. I'm not a retail expert, but I would assume consumers still prefer to buy their pain killers and soap alongside their groceries or at Walgreens. I'm sure there's a boat of data out there to confirm or deny that assumption, but in either case, getting charity into the rhythm of people's daily lives seems to be like a good thing.
Now, it would be incredibly difficult for Genericx to do what Brandless has done and push it to scale, i.e. make its own products and get them into stores globally.
But, I believe there is a hybrid model to offer its own generic products as well as create the tech to enable other retailers to opt into the model.
Going back to the example above, instead of Genericx creating its own white-labeled acetaminophen, perhaps Genericx licenses the UPC+charity platform to CVS who can then bolden their value prop to their customers. Again this is an assumption that a store like CVS has more upside on their own products vs. when they sell a bottle of Advil or gummy vitamins.
However, we don't want to raise all prices for all consumers. There still needs to be the ability to get the generic price without making a donation. We'll need to navigate that as well.
Half-baked. But hopefully interesting!
Some tangents and meditations:
1. For Genericx produced products, pharmacies and other retailers that make generics may not want to provide shelf space. Genericx would need to be surgical in finding the right types of products to white label, and also partner with retailers with a higher percentage of socially focused consumers. How would Genericx help those stores get more people in the door?
2. How do you show proof of purchase for a Genericx product or any other for that matter? We would need to parse out a receipt via mobile application or something similar. For Genericx products, it could be a QR code or some other method of verification in the packaging.
3. To the point of giving choice to the consumer, you could make the charitable contribution something you opt into after the purchase, and not something you need to do for ALL items you bought. For example, scan your receipt in the Genericx app, and it will pull out all eligible Genericx homegrown items or partner items. Then it would be up to the consumer how they want to handle the price spreads - roll up and make the donation or not.
Overall, there are problems to work through, but nothing insurmountable. I really like the concept of small-scale, high-volume philanthropy. It would get me to switch at least.
After working through this, it feels like a nice extension from one of my previous posts on Acorns for Charity. Round those purchases up and launch!
Soundtrack for this idea: