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Issue Date: Vol. 45, No. 4, April 2005, Posted On: 4/11/2005


Learning From History


Tim Sanford
Editor@vendingtimes.net

It has been said that experience is that mental faculty which enables us to recognize a mistake when we make it again. We were reminded of that during a recent discussion about the successful deployment of vending machines and changers that accept larger banknotes and pay back smaller ones.

A modular note dispenser suitable for use in such a system was displayed at a National Automatic Merchandising Association Expo more than a decade ago. We patronize vending machines at every opportunity we get, and we thought that being able to break a $5 or a $10 and get back singles in change was a fine idea indeed. But none of the operators with whom we spoke agreed with us. Their reaction, invariably, was: "That would be a nightmare!"

At the time, they probably were right. The range of vendible products was more restricted then, and a $1 price was a rarity in machines not vending fresh food. Times have changed, of course, and the industry is looking at banknote payback with a new appreciation for its potential in building sales.

We related our "nightmare" story to an industry veteran who replied, "Yes, the operators also said that about glassfront snack machines - they'd look abandoned if one column sold out before the driver got there; they'd invite vandalism; they'd complicate the ordering process intolerably. And they also said it about dollar bill validators when they first were introduced...."

We recall those episodes, and his recollection was accurate. In the operator's defense, the first $1 validator concept made its tentative vending debut around 1970, in conjunction with a prototype frozen food vender. At the time, no one wanted to grapple with the accountability problems that paper money acceptance would introduce, and most full-line operators believed that a location where food sales volume was so low that frozen products were necessary was not really a food location at all.

Similarly, the product pipeline that was threatened by the glassfront snack machine was a model of efficiency. Serving a public that had grown up happily consuming eight to 10 confection items, vending machines could offer nine or so selections that the operator could purchase directly from the confectioner, in truckload quantities. A typical vending warehouse held about 15 stock-keeping units, usually consisting of a core of six or eight favorites surrounded by a changing mix of discretionary and novelty items that the driver could rotate through his machines, to keep patron interest up. It was an elegant system, prefiguring today's "category management" concept. However, the public began to fragment and to demand single-serving salty snacks, cookies and crackers, granola and whole wheat, and so on and on; and that classic inventory model could not be adapted to the new market  reality. Thus the glassfront vender.

In adapting to these changes, adjusting the perception from "nightmare" to "necessity" (and then to "sales-builder"), vendors repeatedly demonstrated their practicality. They are doing it again right now. But the process always has been attended by a good deal of anxiety and grumbling.

We certainly don't think that anyone should uncritically embrace every supposed innovation that comes along. Sometimes, a bad idea is a bad idea, and sometimes the same bad idea comes back every decade or so. Operators are keenly aware of this.

At the same time, we do recommend changing the criterion for evaluating an innovation from, "How will this affect the way I run my operation?" to "How will this be received by my customers?" If the answer to that rephrased question is, "enthusiastically," then it's well worth while to study the new idea with care and sympathy, making every effort to find a way to implement it profitably.

The perennial difficulty for business (and not just small business) is that people naturally prefer to sell the things that they're comfortable with selling, which are not necessarily the things their customers want to buy. Even a genius cannot insist on continuing to run an airline with propeller planes when the flying public prefers jet airliners.

We are going to adapt to our market, one way or another, or perish. The process will be easier and more enjoyable if it's undertaken by focusing on the potential positive impact on sales, rather than on the disruption of the existing comfort zone.

Topic: Editorial: Vending

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