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Are Vendors Adapting Too Slowly To Changing Retail Landscape?

Posted On: 5/8/2014

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TAGS: bulk vending, coin machine, coin-op machine, coin-op industry, vending machine, bulk vendor, coin-op business, small business, vending, vending operating, Vending Times editorial, Hank Schlesinger, shopping mall trends, retail trends, mom and pop stores, retail transformation

It is no secret that retail is in the midst of a major transition. If the classic shopping mall is not dying, then it is certainly in some transformative stage. While traditional anchor stores fight for their lives against aggressive online retailers, mom-and-pops are facing the perils of a down economy. Even supermarkets seem to be in the early stages of dramatic, long-term change as online delivery services and so-called virtual supermarkets are predicted and poised to expand in the coming years.

The real estate of traditional retailers are some of the most profitable and hotly contested locations among bulk vending operators. They are the mainstays that contribute mightily to the bottom line. Depending on a typical operator's time horizon, all this adds up to either bad news or really terrible news. It's simply bad if the operator's view extends five years out, but terrible if he's looking into the more distant future. This is not to say that supermarkets and other traditional retail outlets will be wiped from the face of the earth to become distant memories told by grandpas to bored children and the subject of documentaries on the History Channel. However, they will likely not exist in either their current quantities. To state it more bluntly: Netflix continues to thrive. Blockbuster is history.

Dramatic changes in retail are not new. Department stores were an outgrowth of the Industrial Revolution. The enclosed shopping mall flourished during the post-World War II boom as young couples abandoned the city for newly built suburban communities. In more recent years we've seen the proliferation of "big box" stores in small communities that are generally credited with harming once flourishing Main Street businesses. In these instances, there were casualties among those businesses that saw these shifts as either a "flash in the pan" or convenient novelty.

How have bulk vending operators adapted to the more recent and relatively small changes that have already taken place in retailing? Not so good. Many operators have taken the closings of large retailers and poor sales as a result of a troubled economy, not a fundamental shift in how consumers shop. Interestingly, some of the younger operators maintain this stance even as they shop online at Zappos or Amazon, and order their veggies from Fresh Direct. And many operators have simply hunkered down as they wait for change, though I strongly suspect they won't like the changes that eventually arrive.

One measure of operators' current level of adaptability is the penetration of bulk into new types of retail establishments now on the rise and traditional locations still open to bulk vending. Bars and taverns, for instance, once a staple of the bulk vending operator's route, have all but been abandoned. However, some operators have reported success in sports-themed bars with licensed product from professional sports teams.

The enormous transformation in retailing underway will likely not take place overnight. Many operators will manage to ride out their careers until retirement, leaving the industry long before the shifts become painfully apparent. Then there are those operators who will begin experimenting with new location categories, gaining the expertise necessary for long-term profitability. Again, it all depends on your time horizon.