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Issue Date: Vol. 49, No.3, March 2009, Posted On: 3/20/2009


UPFRONT: Social Networking: What Does It Mean For Our Service Industries?


Alicia Lavay
Alicia@vendingtimes.net

Recently, after I joined Facebook, one of my contemporaries informed me that he and I are part of "Generation X" while our twentysomething colleagues belong to "Generation Y." I mentioned this to a twentysomething friend and colleague, who responded by posting "We are generation awesome!" Thank you, dear girl!

If any of this sounds foreign to you, don't worry – it was gibberish to me, too, just a few weeks ago. In fact, when I started to think about a topic for my column this month, I had thought of discussing communication breakdown and what technology has done to impair face-to-face social interaction. The ease with which I was enticed into signing up for Facebook (you know who you are) got me thinking about this much-discussed phenomenon, and about Dr. Michael Kasavana's provocative definition of the Internet as "the world's largest vending machine." It certainly is the world's largest videogame.

Dr. Kasavana, who is the National Automatic Merchandising Association Endowed Professor at Michigan State University's School for Hospitality Business, has striven to persuade operators that today's information technology is not an optional accessory that might be nice to have, but rather an essential component of a competitive business. I suspect that widespread adoption of this technology will enable operators to meet the market in wholly unexpected ways.

MySpace, with 70 million visitors, has become the digital equivalent of hanging out at the mall for today's teens, who load the site with photos, news about music groups and detailed profiles of their likes and dislikes. Clearly, such social networks as MySpace and Facebook, and sites that enable users to share media, like YouTube, have become an unavoidable part of contemporary life. Heck, if I was convinced to join Facebook it must be relevant, since I have never been one to follow the crowd.

Social networking is a phenomenon that has overtaken and transcended the informal conversations conducted by casual users through the old bulletin boards and special-interest forums. It is an essential part of the new way of looking at, and using, the Internet that has been called "Web 2.0." According to Tim O'Reilly, founder of O'Reilly Media, Web 2.0 is defined as the business revolution in the computer industry caused by a move to the Internet as a platform. This is interesting to computer software companies, but O'Reilly adds another principle that everyone should ponder: "Users add value. The more users, the better."

For our purposes, Web 2.0 refers to the Internet as a medium with its own distinctive appeal for communication and affiliation, not simply a means of transmitting and receiving messages that might have been sent another way.

In many consumer-driven industries, companies have begun to incorporate Facebook, MySpace and online media management and sharing sites such as Flickr and YouTube into their website marketing strategies in an effort to engage consumers in a more interactive manner. Businesses are falling all over themselves to figure out, "How can we exploit the phenomenal popularity of social networking to promote our business?" Multibillion-dollar corporations are already on board, even if they're not sure what the benefits will be (or even whether there are any).

What does this all mean for our industry? How does it relate to today's consumers at work and play? These are questions worth asking. It is easy to sneer at social networking – I know I did at first. But as I tried to explain to our editor, Tim Sanford, when working on this column, wisecracks are really not helpful! (Perhaps by the time you read this article I will have "friended" Tim on Facebook). Longtime industry student and critic Brad Bachtelle has observed that identifying something as a "fad" is no reason to ignore it; the sensible strategy is to sell the things people want to buy for as long as they want to buy them.

If at fortysomething I am labeled Generation "X," then many of today's and surely tomorrow's vending machine patrons and music and game players belong to Generation "Y," with "Z" coming up fast. The good news is that nearly all of them have embraced technology. And, as it happens, operators are in the technology business! Since the vending, music and amusements industries already provide interactive machines, shouldn't we be able to capitalize on consumer behavior and make interactive technology work to our advantage?

The amusement and music business has benefited from manufacturers who have worked hard to create wide-area networks as vehicles not only for promoting play, but also for advertising. These lend themselves to a degree of social networking, and patrons appear to be taking advantage of the opportunity. While music and games operations tend by their nature to be more or less local businesses, the emergence of massively multiplayer online games with international followings has demonstrated the appeal of interactive competition at a distance. Tournaments with online score posting and standings tabulation have proven successful for operators, and the possibility of empowering a community of coin-op gamers is being explored.

The situation in vending and office refreshment service seems more problematic. Both service modes have used websites to showcase their capabilities and make it easy to contact them. OCS began as a distribution system whose deliveries were handled by common carrier, and that old model has lent itself to Internet marketing of products and, sometimes, equipment too. All of this is good, workable e-commerce, if done professionally.

While "Web 2.0" seems to open up possibilities far beyond e-commerce, no one appears to have figured out just what they are. Doing so can address some longstanding challenges. In the case of merchandise vending, operators always have tried to maintain customer interest with promotions, new product introductions and customer appreciation days. The idea has been to encourage people to stop by the breakroom and see what's going on. I'm not the first observer to notice that some kind of interactivity – electronic advertising and messaging on the machine, for example – can interest patrons, reward operators and provide benefits to sponsors. I'm sure that more extensive interactivity is possible, too; but the real challenge is to get people talking positively to one another about vending, whether in 140-character "Tweets" on mobile devices or on Facebook Walls or in blogs. The challenge – and not only for us – is how to stimulate that positive buzz.

I think it's important to keep in mind that the "Generation Z" mentality places much value on social networking, but is suspicious of commercialization. This is a real problem for the providers of social networking services, but not necessarily for those who benefit indirectly from them.

In the end, social networks are powered by people – which isn't new. Back in the days of the neighborhood mom-and-pop store, we didn't do business with a business: We did business with a person. We may be returning to that model – and it's one that operators always have embraced.


Topic: Upfront with the Publisher

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