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Issue Date: Vol. 53, No. 1, January 2013, Posted On: 1/25/2013


People, Get Ready!


Alicia Lavay
Alicia@vendingtimes.net
TAGS: Vending Times Census of the Industry, vending industry, coin-op, vending machine, coin machine business, office coffee service, vending machine operator, micro markets, Alicia Lavay, Vending Times editorial, automated retailing, John Mayer
Alicia Lavay


There's an old joke that if all the economists in the world were laid end to end, they would not reach a conclusion. Getting economists to agree on anything seems like an exercise in futility, but I think we can be sure of one thing: untangling the causes and assessing the results of the financial crisis could take years.

But what does that crisis mean for us, and what do we do while the experts are figuring it out? Wait on the world to change? In the words of songwriter John Mayer, "It's hard to beat the system/When we're standing at a distance." We need to make decisions and move forward, because we'll never have all the information. Uncertainty makes people sit on their hands. And if they become complacent, or worse -- frozen in fear -- the outcome can be crippling.

Some economists believe the private sector would be poised for strong growth if it were left to its own devices. This seems to be exactly what is happening in both the vending and amusement industry. For an interesting take on this, I encourage you to read Marcus Webb's editorial "When you're On Your Own" on page 34 of this issue. Marcus reminds us how our industry has always been on its own throughout its history, and the best approach is to be resourceful, band together and to keep an eye on government so you'll know when the government starts keeping an eye on you. Both the vending and amusement industry associations have done an excellent job; we must continue to work with our trade groups to elect people who do not regard our business either as the enemy nor as a goose that lays golden eggs.

Notwithstanding our industry's many hurdles, we do have good reason to be hopeful in 2013. According to the Vending Times Census of the Industry (see December 2012), the vending business rose from $42.2 billion in 2010 to $43 billion in 2011. Both vending and office coffee service regained ground in response to market challenges, and the workplace services business has demonstrated its ability to keep growing. In the last year, advances in payment systems, telemetry and management software showed practical value in enabling the sale of higher-priced merchandise through vending machines, which contributed to this modest recovery.

Amusement operators showed signs of rebounding, too. They always have recognized that they are in the entertainment business, so have been adapting to the need for new tools to stay relevant to current and future consumer tastes. In doing so, they have had considerable success in slowing an overall decline that began in 2006. And, much like their merchandise vending counterparts, they have responded to economic contraction by dropping marginal accounts, fine-tuning equipment offerings, streamlining route operations and adding value to consumers' new mobile capabilities for interactivity. In the last year, jukebox operators have had access to improved tools for meeting location demands and competing with personal entertainment devices.

In the bulk vending segment, while the number of machines on location declined, ongoing price improvements helped end, and reverse, a period of revenue decline. Total dollar sales through bulk and flat vending machines increased 1.2% in 2011. Patrons also seem increasingly willing to insert multiple coins to make a purchase.

In this month's column "Debunking 'The New Normal,'" Hank Schlesinger discusses the resiliency of these operators. He points out that business, like fashion, technology and music, is in a constant state of transition, and that bulk vending suppliers have shown no signs of falling behind the current trends. He reiterates something we all know very well: vending operators are largely entrepreneurs and entrepreneurs are natural optimists.

So, while others may wait on the world to change, our industry is exhibiting the strength needed to overcome the obstacles that confront it. I think there's every reason to believe that this will continue. But it can't endure in a climate of opinion that's hostile to profitable creative endeavor. We should keep in mind the alarm that 1971 National Automatic Merchandising Association chairman Patrick L. O'Malley, Canteen Corp., used to raise: "The engine of free enterprise is a mighty one -- but there's dynamite on the track!" (This is one of my favorite quotes.) It is more important now than it ever has been for us to talk up the industry, work together to build understanding of it and bolster its image, and renew American confidence in the value of entrepreneurial initiative and its reward.

If you haven't already, people, get ready and jump on that train. The challenge is ongoing and there is every reason to believe that it will continue.

People get ready
There's a train a-coming
You don't need no baggage
You just get on board.
—Curtis Mayfield


Topic: Upfront with the Publisher

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