I am a strong believer in the expression “no guts, no glory,” but I am also a realist and know it hasn’t been easy for any of us. We are all keenly aware that every sector of the coin-operated business has been hit hard. Costs have gone up, prime locations are getting harder to find and profitability is continuing to decline. Nobody has been spared. But still, many came away from this year’s trade shows with a new outlook. Our innovative manufacturers and suppliers are paying attention and stepping up to the plate – and it’s a good thing, too, because something needed to be done in response to the changing marketplace.
The AMOA Expo saw a lot of technological advances. Upgrading to more powerful networks, dynamic out-of-home advertising media and all-around coin-op ingenuity were on display, up and running at the show (see VT, October). Clearly, the traditional route service model has and will continue to evolve in response to a developing market. Many believe that site-based entertainment such as family entertainment centers and a strong home market will dominate the music and games sector in the future. But the good news is that operators now have access to better tools for meeting specific location demands, and for opening up new kinds of location “on the street.” Digital downloading jukeboxes and wide-area game networks have kept street operators competitive in the shrinking tavern market. Of course new technology brings with it its own challenges, but the potential for growth has arrived and is here to stay. This is not your grandfather’s amusement industry.
Technology was also a major theme of this year’s NAMA show; indeed, it has been a hot topic for the past several years. Much like the amusement and music business, steady improvements in communications infrastructure (especially wireless wide-area networks) and computers seem at last ready to fulfill their promise of lower route expenses, higher per-machine sales and greater customer satisfaction. Progress in technology is allowing operators to find customized solutions and address the needs of a wide range of clients – from large to small – while maintaining profitability. According to industry veteran Allan Gilbert, technology and connectivity will define the vending company of the future.
On another positive note, concern over increasing price inflation has not discouraged consumers from paying a fair price for the products they want. Many operators who I spoke with at NAMA are responding to their customers’ desires by providing “better for you” programs and more environmentally friendly services. While health-conscious and ecologically sensitive products can cost more, many locations have been willing to absorb the expense on behalf of patron nutrition and environmental responsibility.
I also ran into more than one operator at the show who reported good results with food vending. During these difficult economic times, many companies no longer can afford to subsidize cafeterias, and so are turning to vending to provide meals for their workforces. This is not unprecedented; full-line vending emerged largely in response to the cooling of the immediate postwar economy and the resulting pressure on large employers to cut costs. These are all very promising signs that the vending industry is regaining its traction in today’s very different world. Moreover, the presence of so many new exhibitors at the show demonstrates long-overdue recognition of the vending industry’s power as a retailing channel.
And so I’ve come away from the trade shows feeling very fortunate that industry innovators have given us a new set of tools and a tremendous array of product offerings with which to meet contemporary consumer demands. We just need to put these tools to use in enhancing service and restoring profitability, and we can look forward to a brighter future.
And, speaking of tools to help traverse the unpredictable road ahead, the Vending Times 2008 Census of the Industry is here. Digital copies are also available, so let us know if you’d like one. As most of you know, the Census provides performance results for major product categories in the automatic vending, coffee service and coin-operated amusement industries. And, keeping our promise to invest in the future of the publication, this year we partnered with Harvey Research Inc. (Fairport, NY). We know the landscape has changed, and so we must change the way we acquire and report information. Rest assured that we will make a serious and knowledgeable effort to go on providing the best information attainable. To that end, we will continue to bolster our research capabilities, to present an accurate and realistic view of the industry.
We hope the Census will serve as a tool that can help plan for the future by understanding and learning from the past. Anticipating changes that affect the future direction of our industry is never easy, but one thing is crystal clear: The demand for food and entertainment in away-from-home settings remains strong. Perhaps one day we will look back and realize that 2008 marked the beginning of our industry’s next Golden Age.