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Issue Date: Vol. 56, No. 10, October 2016, Posted On: 10/25/2016


Defining Coin-Op As Amenity, Or Seeking An Amenity For Coin-Op?


Hank Schlesinger
swag@earthlink.net
TAGS: bulk vending, coin machine, coin-op machine, coin-op industry, vending machine, bulk vendor, coin-op business, small business, vending, vending operating, Vending Times editorial, Hank Schlesinger, hardnosed businessman, classic video games, FEC offerings

Sometimes it proves productive to think about business in a new way. Scientists call these exercises "thought experiments." Even the toughest of the hardnosed businessmen find value, if only occasionally, in these flights of fancy. With that in mind, let me propose a somewhat unconventional way to look at coin-operated amusement machines.

One of the unique features of coin-op amusements is that they sometimes function as an amenity, while at other times they require their own amenities to attract customers. In other words, coin-op amusements traditionally provided added value to a venue, such as in the case of a pool table in a tavern or classic videogames in nightclubs. However, in more recent instances, as with a new generation of family entertainment centers, coin-op itself requires the added-value amenities of unique environment or availability of food and beverages to attract consumers. Coin-op is not unique in this respect. Other industries, such as the bar business, are similarly situated. An airport or hotel bar, which is an amenity, is quite a different thing in concept and function than a neighborhood tavern or nightclub that competes on the basis of value-adding amenities like jukeboxes, dart leagues or a professional DJ.

What brings this to mind is the recent trend toward aggressively adding value through amenities in all manner of consumer venues, from mid-price shopping malls to upscale clothing stores. At a time when it is possible to buy nearly anything online, savvy retailers are upping their games by offering experiences not available in the comfort of homes in front of computer screens. The same can be said for forward-thinking FECs, which increasingly seek to add sensory excitement for their guests.

In both instances, this is potentially good news for coin-op. However, it does require some creativity on the part of operators and careful thought about how to position a segment of the industry. Traditional coin-op sold itself on adding to a location's bottom line with the not insignificant side benefit of providing low-cost entertainment that kept patrons in the location. Income from a jukebox or pinball machine very often provided an appreciated profit center for the right bar or tavern. This is still the case in many instances across the country. However, by touting the nonmonetary, ancillary value added by a coin-op device or devices, changes the dynamic. For instance, a bank of four or five classic games in a tavern not only provides extra revenue, but offers a highly promotable attraction for that location.

The same case could be made for bulk vending. Generations of mothers know that the promise of a bulk-vended product for good behavior at the supermarket often works childcare magic. In this instance, bulk vending provides a very high-value amenity for customers. It should be noted that other categories of retailers have tried the same approach with varying degrees of success.

It all comes down to thinking a little differently about coin-op's function in a location. At a time when many potentially high-profit locations are eschewing jukeboxes in favor of alternative music delivery systems, and an enormous number of entertainment options are held in smartphones, new thinking may just be the key to survival. It is worth noting what Charles Darwin meant when wrote about the "survival of the fittest." He wasn't referencing the strongest, largest, fastest or even smartest. Darwin held a deep and abiding appreciation for the most adaptable. The same, I'd note, also holds true in business.


Topic: Editorial: Music and Games

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  • The State Of Coin-Op Play: Static Answers Can't Address Dynamic Questions

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