BALTIMORE -- PayRange chief executive Paresh Patel spoke at Vistar's annual sales conference at the Hilton Baltimore on Aug. 13, building excitement over a freshly inked distribution pact between the payments tech company and supply warehouse.
Vistar, the vend product distribution arm of the Performance Food Group, will distribute PayRange's mobile payment technology to vending operators nationwide. It's taking preorders for the Bluetooth wireless devices that are installed inside vending machines and communicate with an app on patrons' smartphones. They will ship this fall. | READ MORE
Patel kicked off his presentation to 350 members of the Vistar team by showing Apple's 1984 commercial, after which he ran up through the center aisle and jumped onto the stage, delivering an engaging talk that captivated the audience. He emphasized that 1984 was a pivotal moment in computing when Apple introduced the Macintosh computer. "It opened our eyes to the graphical user interface that became the foundation of much which has come, including Web browsing, smartphones, tablets and more," Patel said.
He pointed out how Gen X and Gen Y, the most-targeted users of vending, are also becoming increasingly cashless at an astounding rate, while the baby boomer generation that has been paying with cash is retiring from the workplace.
PHOTO: PayRange chief executive Paresh Patel shows how installing a BlueKey into a glassfront snack vender is as easy as plugging in a thumb drive into computer. The BlueKey should work will all MDB vending machines manufactured in past 15 years.
Patel stressed the need for the industry to innovate, advance and adapt or risk becoming irrelevant, which will lead to decreased sales, forcing operators out of business.
He illustrated his point by noting that Blockbuster went from its peak to bankruptcy within five years. "Without change, the demise can be rapid when consumers find alternatives that better suit their needs," he cautioned. "Blockbuster didn't foresee the rapid change in RedBox and Netflix."
Patel conceded that the industry has seen more innovation in the past 10 years than it has had in the last 40 years, including prekitting, DEX automated data capture and retrieval, vending management software, dynamic scheduling and pick-to-light warehouse systems "But all this innovation has one theme -- it's all about cost cutting," said Patel. "None of it inherently improves the customer experience. In fact the front-end, the part the customer experiences, has not changed in 30 years."
The PayRange chief argued that nothing else matters if the customer can't pay, which he likened in vending to the front door of a retail store being closed for business.
Patel emphasized that despite the low, single-digit penetration of card readers on machines, operators are not ignorant. They know that they need to implement cashless, but are restricted by current solutions that don't meet their needs.
"Fortunately it's not too late," Patel said. "If you already had a landline, you probably kept it when you got your mobile. But think about your kids; they will go to mobile first and they may never get a landline."
Vending is in a comparable situation. The roughly 5% of the machines that have card readers will probably keep them. But the other 95% that never had a card reader will go straight to mobile first and "leapfrog" the card reader.
"It no longer makes sense to continue deploying generation-old technology just like in developing countries that began focusing on mobile instead of landlines," concluded Patel. "As for card readers with touchscreens, they're an upgraded type of landline -- like a cordless phone. At the end of the day, it's still a landline."