PUNTA GORDO, FL - Larry and Audrey Freshman of Kworterz Vending Inc., based here, have not only specialized in providing bulk vending in malls for the past decade, they've also pioneered many of the concepts that are now standard operating procedure for mall locations.
Beginning with their previous company, Have-A-Ball Vending, the husband and wife team discovered the profitability of malls and the strategies that have made them profitable very early on. Two years ago they sold Have-A-Ball, which included mall locations throughout Florida, and formed Kworterz Vending (pronounced "Quarters"), which covers Florida's Panhandle as well as Alabama, Louisiana and Mississippi.
Current plans call for expansion through the Carolinas for a total of 20 malls by year's end. And, while less than two dozen "locations" may sound less than impressive, it's important to note that malls provide unique opportunities for the bulk vending operator in which each location is capable of hosting upwards of 200 heads in a variety of configurations.
This type of machine density in a single location is one of the primary benefits of malls. A moderately sized mall can provide placement to the same number of bulk heads and access to foot traffic equal to an entire town.
START OF SOMETHING BIG
"We got into vending 10 years ago, just as most little operators do, by buying little single-head and two-head machines," explained Larry Freshman. "We used to have a route with probably 150 stops and it would take days and days to do all of that. One or two people working really hard all day can hit maybe 20 or 25 locations, depending on the logistics of the locations. Eventually we decided we would rather go to one stop and hit a hundred heads of vending."
It wasn't too many years ago that bulk vending racks in malls, much less prominently displayed, were a rarity. If a mall allowed an operator in at all, it was usually in either an out of the way location or entrance vestibule. And while entrances proved profitable, they didn't fully tap the potential market of strolling shoppers. That unhappy state of affairs has changed with operators such as Freshman demonstrating to mall managements the possibilities of bulk vending.
The secret, Freshman, along with other operators, has discovered is not to offer pre-configured racks, but to create displays that meet the individual needs of each mall in terms of size and design. This is not so different than what large chain retailers do in malls. The largest retailers have designed their stores to not only maximize mall traffic, but also conform to mall management guidelines in terms of design and signage. For those operators who have learned these lessons, specialized racks and high-quality service continue to win over mall management one location at a time.
"We pride ourselves on being very creative and giving the malls something they don't have, which is higher-end looking racks and equipment," explained Freshman. "And Northwestern has been great in manufacturing whatever we design. We design the different sizes and configurations and they put it together for us from our concept. Our strategy is to go into a mall with a couple of wooden racks that we call 'Cakes,' because it looks like a chocolate cake. We manufacture them ourselves. For instance, we went into a mall in Mississippi and we built octagonal rack, what I called 'coffee cake,' because it has a hole in the center. It goes around a support column in the mall. This is space malls can't rent; it's dead space around a column. Now we have an eight-foot diameter rack that goes around the column with about 30 heads of vending in it."
This, explained Freshman, is a fairly typical number of heads for a single rack. Most of his rack configurations, he said, feature from 32 to 36 heads with several racks scattered throughout each mall. And, while the Kworterz team has placed the majority of its machines in high-traffic, high-visibility locations, such as center concourses, they also have machines stationed in secondary high-traffic locations, such as the food court, entrance hallways to restroom facilities and, of course, main entrances.
THE CITADEL OF VENDING
A few years ago, Freshman and Kworterz garnered some attention with a rack that holds upwards of a hundred heads. Working with Northwestern, he designed the X-shaped configuration to fit a specific location. Called the "Citadel," the mammoth rack proved so successful that he's since installed another one. According to Freshman, the mall management at both locations were thrilled with the eye-catching, traffic-stopping display. Obviously, the "Citadel" isn't the kind of configuration that would fit every location, but it does illustrate the thinking that has made Kworterz so successful in the mall marketplace.
"We think large and we dream big," said Freshman. "Other people want to put in a six-head rack and a 10-head rack. That's their focus and the limit of their creativity. They don't think beyond what they can buy from someone else pre-made. We feel we can make whatever we need or design it for the location."
For larger locations, Freshman also installs change machines near the bulk vending racks, a move that has increased the cashboxes of those machines 30% or more.
As for pricing, Freshman is currently in the process of increasing price points on a variety of items. The most dramatic of these price adjustments is moving the 49 mm high-bounce balls up to a dollar vend. "A lot of our 50¢ things are going to 75¢, though some will stay at 50¢. We're also moving to 75¢ and a dollar, but try to maintain a supply of quarter items."
ADAPT AND INNOVATE
Freshman credits his willingness to configure and in many cases custom-build racks to meet mall requirements as one of the keys to his success. "If we're going into a high-end mall and they don't like the look of the chrome rack we would use, then we'll custom build a piece of furniture to match their decor," he explained. "We end up with equipment that looks like part of the mall. And since we build our own equipment, I can make it fit any size, shape and color they want. Malls want everything up to date. If the mall is changing their flavor of things, their style, they want you to change with them."
Another critical point, Freshman pointed out, is that when going into a new location, he always uses new equipment and then expends the time and effort to maintain it. "What the leasing manager doesn't want is to put you in the location and then have the district manager show up and see crummy equipment that's dirty and beat up," he said. "If that happens, you're leaving the mall, I promise. Our claim to fame is that we always give more than we promise. So many people give a lot less than they promise. They'll tell a mall they'll do something and never do it. When we do something, we give them three times as much as we promised. We've never been asked to leave a mall, so we don't know what that's like. Our machines are kept full, they're attractive, and they have a good product mix."
As one would expect, selling into malls is different than selling into the mom-and-pop locations. "It's important to have all your ducks in a row and be as professional as you can when you go in to meet these mall managers and specialty leasing managers," Freshman advised. "They're getting paid by their bosses by how well you produce and the service you provide. They don't want to put you in there and have problems with you. And we always keep in touch with the mall. So many people never have face recognition with the mall leasing manager. We make it a point to speak with them and find out what their concerns are. There are malls everywhere, and there isn't a mall we won't do, even a tiny regional mall out of the way, we'll do."