Current trends in vending technology should call new attention to the value of food as a vendible product category. The accelerating adoption of payment systems that offer patrons the opportunity to make purchases with cards or higher-denomination bills has done much to eliminate the barriers that tended to confine vending to lower-value (and hence lower-quality) prepared food items. And an increasingly mobile public, increasingly pressed for time, no longer harbors the nostalgia for traditional dining experiences that presented such marketing difficulties for the first wave of fully practical food vending machines five decades ago.
Above all, there are the new micromarkets. There has been a spirited difference of opinion in this office over the nature of a micromarket: is it a vending machine or a manual foodservice facility?
We believe it to be a vending machine. In 1967 or thereabouts, the then-president of The Vendo Co. (Kansas City, MO) explained to a group of financial analysts that a vending machine is a "labor storage device" -- the seller arranges the products for sale when it's most convenient, and does not have to wait for a customer to happen by. The buyer can purchase a product when it's most convenient, without having to conform to the seller's own schedule. The seller has "stored" the labor of stocking the shelves, and the buyer can get the benefit at any hour of the day or night.
A micromarket is a vending machine in which the product delivery function is handled by the purchaser, rather than by a mechanism. This is simpler and more straightforward, but it is a bit more time-consuming and susceptible to abuse if not monitored carefully. The traditional vending machine, arguably, does a slightly better job of protecting products, while the micromarket does a substantially better job of allowing the patron to inspect them. Both systems offer opportunities for attractive presentation, but micromarkets offer more flexibility and scope for imagination.
For these reasons, the micromarket is an attractive and versatile extension of the full-line vending concept. For the past quarter-century, operators have recognized that the convenience store is their major competitor. Well, the micromarket is a miniature convenience store, without the canned motor oil and themed keychains. But it also is a combo vending machine with much wider tolerance for odd package sizes and shapes, and it offers patrons the ability to interact with those packages in three dimensions.
With this in mind, we have been a bit surprised to hear people contrast micromarkets and traditional vending machines. We've heard it said that refrigerated food venders can't sell premium sandwiches and platters; of course, they can. In just about every market area, at least one vending company (and often several) has distinguished themselves from its competitors by developing and emphasizing excellent foodservice capabilities. This really requires a commissary (except in very exceptional circumstances), an experienced and imaginative foodservice director, and a strong commitment to high-quality food. With these in place, an operation can apply to traditional vending the same technology that has made micromarkets possible: acceptance of debit, credit and stored-value cards, administration of loyalty programs, and so on. And the favorable impression made on customers by excellent food provided through one of these retail media will carry over to the other, as it always has with vended and manual foodservice. If a micromarket is a compact, self-service convenience store, it also is a compact, self-service speedline. A breakroom equipped with a micromarket, and a bank of vending machines for hot beverages, the most popular packaged cold drinks, candy and snacks, and perhaps ice cream and other frozen snacks and desserts, could create an expectation of excellence that would carry over to a variety of alternative service arrangements, as location needs and the state of the local economy might dictate.
Operators who have begun placing micromarkets report that they finally are able to make money selling food. We've encountered many vendors over the past four and a half decades who have found ways to do that, but it certainly is easier now -- if the food is worth the price that it must command to be profitable. A vendor who can produce such food, and who develops a good reputation around it, will be able to sell it profitably through machines, from catering trucks, on concession stands, at catered events, and so on.
There is a contemporary tendency to hail technology for allowing us to do things that we were simply unable to do before it was invented, like watch big-budget epic movies on filecard-sized screens while riding the subway. We think it may be more useful to focus on the use of new technology to allow us to do, more efficiently and easily, important things that we always have done.
And we think it short-sighted and harmful to sell micromarket services as a superior alternative to vending. It is far more prudent to present them as an attractive extension of a superior retailing method.