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Issue Date: Vol. 41, No. 14 / December 25, 2001 - January 24, 2002, Posted On: 12/25/2001


Darkness And Dawn


Tim Sanford
Editor@vendingtimes.net

We enter the second year of the new century with the nation in a much less positive mood than was the case a year ago. The public spirit seems oppressed by the terrorist assaults of September 11, and this attitude seems likely to retard recovery of an economy that is fundamentally sound. Worse, we confront the ongoing effects of a new "security" imperative which often finds expression in the idea that, when one cannot identify a specific threat, the way to convince everyone of serious purpose is to inconvenience as many people as possible.

Still, we think 2002 is going to be a good year for these industries. We propose three reasons for this optimism.

First, anyone who remembers the late '70s and early '80s will recall that the economy seemed to be dead in the water, and the role of vending in the society of the future seemed alarmingly hard to define. But that period saw the introduction of microprocessor controls by vending machine manufacturers, heralding the unprecedented reliability, convenience and merchandising power of today's equipment. When things are going smoothly, there is little reason to innovate. The challenge is to find new answers when it becomes necessary, and this industry has a very good record of doing that.

Second, the conditions that prevailed around 1980 convinced the majority of operators that they needed better management tools; the watchword was "Work smarter, not harder." The ensuing decade saw the rapid development of affordable computers and industry-specific software for them, and their increasing adoption by operators. That process effectively was completed by the brief but alarming economic downturn a decade ago.

And, of course, that economic glitch was marked by introduction of the first new-generation frozen food and ice cream machine, and the first high-selectivity glassfront cold drink vender.

It may be that there is a mysterious ten-year cycle operating here. The industry again has entered a difficult period, and again has access to new tools with which to construct the next great advance in vending's appeal to consumers, broadening our presence in the retailing mainstream, and increasing control, efficiency and responsiveness at the same time.

One of the keys to this is the steady improvement of the DEX-based Vending Industry Data Transfer Standard. While work remains to be done, it will be easy to do as the installed base widens. And widen it will, as manufacturers fully implement the standard on their current production. Proven retrofit devices are available, to make older machines compatible with DEX; and handheld computers, like all computers, continue to increase in power and functionality.

Operators already concerned over route productivity who now see the need for better sales analysis have every reason to start upgrading their equipment for DEX compliance.

This, in turn, will put the final piece in place for the assembly of vending machines into wide-area networks. The rapid evolution of communications technology, driven by widespread consumer and business demand, has worked to increase reliability and reduce cost. The two longstanding goals of remote auditing and remote authentication of cashless payments are rapidly converging. The Internet provides a ready-made communications medium for both applications.

Real-world tests over the past several years, and practical use of these technologies with machines dedicated to high-value merchandise like prepaid telephone cards and one-time-use cameras, have identified the remaining questions and demonstrated the benefits of networked vending equipment. It seems likely that 2002 will see operational deployment of these systems by full-line operators.

A third plus for vending is the channel's growing popularity with marketers. In 2001, frozen items continued to gain ground rapidly, beverage and snack lines proliferated, and new-generation single-serve milk beverages did very well in tests organized by the dairy industry. While we sometimes have wished that more suppliers would recognize that vending is a major retailing medium in its own right, not an adjunct to convenience stores or a dweller in the "niche and other markets" channel, no one can doubt their interest in getting their products into vending machines.

For these reasons, we believe that 2002 will prove to be a happy new year for the vending industry.


Topic: Editorial: Vending

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