There has been a pervasive lack of confidence in the economy, even before the current recession talk began. However good business may have been, employers have put off rebuilding their staffs to pre-2001 levels. Our industry has not been immune from the effects.
Just open a newspaper, and you’re likely to read about another “top-heavy” corporation downsizing, outsourcing or closing its doors. With small to midsize companies being absorbed at record speed, it’s only natural to wonder what lies ahead for us. For that reason, I have been using this space to keep our readers up to date on the changes we are making to the magazine. I think it’s time to put those into context. I am in this for the long haul, because I believe our industry has a great future. We are investing in that future to the extent that our resources permit.
One example is a series of readership studies we’ve commissioned from Harvey Research (Fairport, NY), which has provided services to publishers and marketing decision-makers involved in business-to-business, professional and consumer communications since 1953. In the first round, we tested our long-held belief that many (perhaps a majority) of our readers are active in more than one business.
Organizations responsible for studying the U.S. economy find it easiest to make the initial assumption that every company has a “primary” business, to which a single classification can be assigned. Statisticians have their reasons for doing it this way, but they miss a lot of details. That omission carries down through people who compile mailing lists, and even (dare I say it?) many who sell and buy advertising. The missing detail can be important. If you are interested in total sales of candy bars, it is more helpful to know how many retailers sell them than to ignore any retailer whose “primary” business is selling newspapers, magazines and chewing gum.
Five or six decades ago, operators running various kinds of coin machines – cigarette venders, jukeboxes, bulk gumball dispensers – heard that someone was marketing a brand-new cup cold drink or fresh-brew coffee or refrigerated food machine. Some of them recognized that they had a few locations where such machines would be very profitable; others had locations that had heard about the new machines, and wanted them. At the same time, there were central kitchens that heard about “full-line” vending and saw a way to gain production economies by offering this new service.
It’s worth keeping this in mind when looking at the results of our first Harvey Research AdlQ readership studies. Besides helping advertisers establish a benchmark to measure marketing effectiveness, these also offer insight into the nature of our readership.
Given our broad editorial focus, we recognized that two studies were necessary. The first one commenced with our April 2007 issue, and focused on music and amusement operators. The second analyzed our September 2007 issue and looked at vending operators.
Both studies confirmed that many of our readers are, indeed, involved in more than one business. Together, the studies also revealed that most operations employ fewer than 25 people; the average reader has 3.9 routes.
The survey results also showed that a great many self-described “music and games” operators do, in fact, read the vending editorial, and look at and recall the vending ads; and that vending operators read and recall the music and amusement ads and editorial too. Here are some interesting figures:
Of respondents identifying themselves as vending operators, 71% have buying influence in packaged vendible snacks and confections; 72% influence cold drink purchases; and 49% have buying influence in the packaged perishable food area. This is not very surprising, except for the large number involved to some degree with fresh food. A great many small operations do offer food, if only to a couple of key accounts.
Also not unexpected is the finding that 54% of our self-described vending operator readers have buying influence in coffee and other hot beverages, and 69% have buying influence in full-size vending machines and payment systems. What did surprise me is that 22% of VT vending operator readers reported having buying influence in coin-operated entertaining equipment. We expected a good deal of crossover, but not that much!
Reinforcing the point, 12% of VT amusement and music operators have buying influence in packaged vendible snacks and confections, and 19% of amusement and music operators have buying influence in full-sized vending machines and payment systems.
It’s easy to say that a lot has changed since the 1970s, when operators fell into distinct categories. But this industry never really has behaved that way. In the early 1970s, we contracted for a readership study by a wonderful old market research pioneer named Dr. Demby. He found the average VT reader to be involved in 4.9 businesses.
We all know that the landscape and the players are different now. Vending, music and amusements and coffee service all have undergone transformations, for better or worse. From one perspective, the most striking change to vending has been the steady movement toward the retailing mainstream, with equipment becoming more versatile in terms of the kinds of package it can handle. While multiproduct venders have a long history, they served niche markets in the U.S. until quite recently. Smaller sites, populated by better-compensated employees working longer hours and given more flexibility in choosing break and mealtimes, have created the ideal environment for venders selling both beverages and snacks or food. As we’ve often remarked over the past decade, this has obsoleted the old vending categories and made it more complex to determine total sales.
Until quite recently, it was possible to define a product category by the vending machine that sold the product. This has become more and more difficult to do, to the point at which it’s hardly worth attempting.
The landscape has changed, and so we must change the way we acquire and report information. It’s important to remember that sales analysis across a broad and variegated market cannot be an exact science. But you can be confident that we will make a serious and knowledgeable effort to go on providing the best information attainable. To that end, we will continue to invest in the publication and in our research capabilities, to present an accurate and realistic view of the the industry.
Our next major project will be the 2008 Census of the Industry, the 62nd annual study of vending, coffee service, and music and amusement sales volume. This year, we will partner with Harvey Research, and the report will take on a new look to reflect an evolving industry. The redesigned questionnaires will begin mailing in March, and we expect to have the data available for you by summer. As always, we’ll do our best to portray the industry as it is, not oversimplifying it nor attempting to make distinctions that mean nothing in the real world.
I know there is a lot of negativity around, and lamentations for the Good Old Days. But our industry has developed technology and operating doctrines that are ideal for serving the high-speed decentralized world we live in, and that is not going to slow down any time soon. The coin machine industry pioneered the automation of retailing products and services, and deserves to reap where it has sowed. Someone is going to provide self-service refreshments and entertainment, and I want it to be our readers. It would be a sad irony if the fruits of all their creativity, innovation and effort were harvested by newcomers recognizing opportunities that we renounced.
That’s why Vending Times is investing in the future, and why I hope everyone out there, in all our segments and in all the tiers of our multi-tiered industry, is resolved to do the same.
If you would like a copy of the vending or music and amusement readership study reports, please email me at firstname.lastname@example.org. And you can learn more about Harvey Research at harveyresearch.com.