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Issue Date: Vol. 45, No. 3, March 2005, Posted On: 4/10/2005


Marketing To The Young Masses Is An Opportunity Worth Exploring


Hank Schlesinger
swag@earthlink.net

U.S.A. - In the few seconds it took you to read this story's headline, a bulk vending customer had more than enough time to make up his or her young mind about making a purchase. It happens just that fast. Bulk vending is about impulse purchasing, and while those impulses can be strong, the decision is invariably made with lightning speed.

Bulk vending has always been in a unique position when it comes to the "dark arts" of marketing. Operators and suppliers of merchandise do not have multimillion-dollar advertising budgets with which they can bombard their customers with repetitive TV or print ads. Neither do they have a lot of space for promotion. Display cards are necessarily small and typically low budget affairs. After all, how much of an investment in time and money can operators or companies put into a display card that would more than likely be obsolete in a few months?

What bulk operators do have is roughly two or three seconds to get the consumer's attention and hold it long enough for them to make a decision. However, that is enough time for the marketing savvy operator who takes full advantage of bulk vending's strengths. First and foremost, bulk vending is an industry that allows operators to switch out merchandise quickly and relatively cheaply. The same cannot be said for other retail operations that involve large quantities of merchandise. Even powerhouse chain stores do not have the option of completely restocking inventory in a particular store if the product lines aren't moving. Operators, on the other hand, can pull merchandise and even reconfigure it into new mixes relatively easily.

Secondly, operators can conduct test marketing over a variety of demographics fairly easily, cheaply and quickly. Again, this is not an option for typical retail establishments that can spend millions of dollars a year conducting focus group surveys or test marketing in a bid to eliminate mistakes or finding the right audience.

And finally, a steady flow of new products from suppliers almost always ensures that "something" will sell.

However, it is the smart operator who combines all of these elements into a comprehensive marketing program who reaps the rewards.

DISPLAY CARDS

The first contact an operator has with his customers is typically through a display card. Serving as both ad and salesperson, the display card makes the promise and explains the product. "Display cards are the point of sale and the only visualization the customer has of the product they're buying," explained VSi's Robert Winquist, "so it's extremely important. At times I've been frustrated because we've created a product that's popular with children and is so innovative , like our 'Pop Ups' , that we couldn't communicate it effectively enough through the medium of the display. It taught us that an innovative product is unsuccessful not necessarily because of its innovation, but the way it's communicated through the display."

According to Winquist, his line of "Pop Ups" had performed well in focus group testing, earning kudos from children who tried them out. However, on the street the product did not perform as well as it could have because the display cards could not completely convey its 3-D concept. One exception, said Winquist, was with those operators who actually adorned the machines with the "Pop Ups" as a point-of-sale device. Sales in those machines, he recalled, were "white hot."

Conversely, when the company What's Up began marketing its breakthrough line of "Blinky Rings" last year, the firm offered an electronic display card that showed the product's light-up function. "The difference in sales between the non-powered and powered displays was incredible," said What's Up's Peter Becker. "It was probably ten-fold as far as sales were concerned, across the board. We know this because when an operator let the batteries run out and the rings didn't blink, the sales would decline incredibly."

In other, more conventional aspects, display cards can be both simpler and more complex. For instance, the flat vend industry continues to redefine the most effective display card format. For years display cards for stickers, temporary tats and other flat vendibles featured a "live display," which was typically comprised of a number of the actual items fastened onto the card. Later, the trend swung toward printed displays, which allowed for more sophisticated graphics and greater use of color. Then, not surprisingly, it swung back to live displays.

"It's a controversy that swings back and forth," explained Winquist. "Now people are getting into combinations of live and printed display cards. The idea is to combine the advantages of a live display with the advantages of a printed display."

But it's even more complicated than that, according to some operators. With a huge number of six-column venders out there, some operators are combining printed and live displays. By using both kinds of display cards in alternating columns they've discovered they're able to create a more appealing machine or highlight a single product to its best advantage. "If you have six columns of either live or printed, it's difficult to differentiate each product line," said Winquist. "Using different kinds of displays for different columns really does make individual products stand out. Operators are only beginning to wake up now to the importance of point-of-sale designs, but you can stimulate a lot of sales by having columns more diverse."

THE MARKET IS THE MESSAGE

When it comes to ball gum and other confections, marketing is no less important. Several operators have reported paying increased attention to marketing the merchandise in the bottom of the rack.

Part of this, naturally, stems from the fact that more products are being produced than any time in the past. Not only are operators turning their attention to "branded items" like confections to boost sales, but also creative use of so-called "house brands" developed by confectionary companies. One innovative operator recently pointed out that his strategy for a mom-and-pop location that did a brisk business in fresh produce was to stock ball gum and candy mixes in fruit flavor themes in keeping with the store's specialty.

Other operators are following the trends in soft drinks and retail candy to pick flavors and concepts. And, in a newer twist, candy developed for key market segments, such as the Hispanic market, has become an important piece of many operators' businesses with flavors such as Oak Leaf's "Mango Chili," which became a hit throughout the Southwest.

What has become apparent is that the trend toward operators treating their ball gum selections like capsuled merchandise by constantly changing them is here to stay.

"When we go to the NBVA show, of every ten customers that come up to us, six will ask, 'What's new?'" said Oak Leaf's Howard Granner. "So obviously, operators and distributors are looking for new things. New trends are a trend now."

Although the lion's share of sales continues to be the standard assorted mix, as Granner and others point out, new products and concepts are becoming an increasingly large part of the market. "The trendy items will get an initial good hit, then a repeat order and then the manufacturer will discontinue the item," he explained. "But that initial first hit is significant and operators are learning to ride these trends."

Although there are no sure bets when it comes to marketing, operators are learning to adapt to trends that seem to cycle through at increasing speed. A decidedly unscientific poll indicates that operators are reacting quickly to drop-offs in sales with strategies that include everything from pulling and replacing merchandise to reconfiguring racks to providing a "new look" for a location. Some operators have also reported designing their own display cards for use in high-profile locations or in racks where they've created their own mixes to match a customer base.

"The industry really is getting better in terms of marketing," said What's Up's Becker. "The industry isn't holding back as far as the expense; it's spending more on the development and production of displays, which is how we communicate with the consumer. That wasn't happening 10 years ago."


Topic: Bulk Vending

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