Advancing To The New Normal

Posted On: 10/31/2011

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vending machine industry, bulk vending, vending times, Alicia Lavay, vending machine, vending machine business, amusement business, Vending Times, Alicia Lavay, coin machine business, coin-op, best practices, NAMA Gratitude Tour, Gen Y, Consumers, USA Technologies, Steve Jobs

Alicia Lavay

I recently was asked to provide insights into the best practices contributing to success in selling to the vending industry. Of course, the companies with the best track records have a product or service that consumers want, and they've established themselves as organizations that operators trust, and with which they want to do business. Building a good reputation requires doing the right thing over and over again.

But it seems to me that these virtues are wasting assets if suppliers don't recognize the opportunity for growth by investing in our business. People outside the industry see promise -- as was evident by the positive response to the National Automatic Merchandising Association's "Gratitude Tour." Why is it, then, that too many long-time suppliers and manufacturers, once strong supporters of this industry, seem no longer to believe in its future?

The coin machine industries, like most other retail businesses, confront the challenge of adapting to economic conditions that have not been seen for two generations: rising costs, depressed demand and general uncertainty. Vending, which primarily serves people at work, has suffered during periods of high unemployment, and it is suffering now. Amusements and music also depend on consumers' ability and willingness to spend, and this sector also has been affected by competition from new entertainment media. But, unlike many other retail channels, our difficulties started early in this decade, or late in the preceding one, and our search for solutions was well under way when the economy collapsed late in 2008. For that reason, the coin machine business may have gone farther than most others in adapting to "the new normal" and this holds great promise for all of us.

Vending has many positive attributes, and they're especially visible to the rising generation of loyal patrons, those aged 19 to 29. Research published by NAMA has found that these Generation Y consumers prefer vending machines to many other retail outlets, such as convenience, grocery and drugstores. This is not surprising, since they have grown up with 24/7 amenities like automated teller machines and self-service gasoline pumps that deliver fast service without ever displaying "attitude." Today's vending machines possess an ever-wider feature set that has improved their reliability, versatility and interactivity beyond the wildest dreams of the pioneer full-line operators of the 1950s and '60s.

In fact, USA Technologies' ePort cashless payment and telemetry service was recently featured in a Verizon Wireless TV commercial depicting a young entrepreneur named Susie expanding her startup lemonade-stand business into vending, while retaining her ability to provide outstanding customer service through wireless connectivity (see the commercial at

Technology has, indeed, come to coin-op's rescue, as it has done before. Equipment can report transactions remotely, giving operators a powerful new tool for minimizing shortages. On a longer time scale, vendors can adjust their service schedules and load plans to reduce the time and expense involved in running their routes. Music operators can program digital downloading jukeboxes to meet the specific tastes and requirements of every location, and no longer need to send drivers out regularly to change a couple of records and mark the new title-strips with red overlays. Game operators have access to a growing array of options for encouraging networked competition, administering leagues from a central computer and organizing online tournaments. And automated transaction capture and retrieval allows operators to build sales databases of increasing value to suppliers. The growing reliability, economy and security of wireless data communications has facilitated the deployment of these tools for managing dispersed points of sale.

It's time for those long-time supporters who have lost faith in our industry to get back to basics and relearn what we believe they once knew. Coin-op always has been, and remains, largely an entrepreneurial business, created and led by people who follow the needs of their markets very closely, and act imaginatively to meet them. An effective sales mechanism and good communications can enable a supplier to introduce a product to adult, away-from-home consumers who, if they like it, will ask for it in the other retail establishments they patronize. It is a matchless medium for obtaining trial at low cost.

I think we all might reflect on the late Steve Jobs, whose success resulted from unwavering focus on consumers and what they really want, and relentless insistence on fulfilling those wants with products and services in elegant packages.

This approach can work for us, too. With the technology available today, the possibilities for our industry are limited only by the imagination.