Changing The Game, Or Rethinking It

Posted On: 9/1/2018

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We have long been intrigued by the interplay of evolving consumer demand, changing economic conditions and engineering advances on the vending industry.
Watching this continually shifting pattern also made us aware of rather similar interactions in other retailing channels. As vending machines have moved from electromechanical coin meters through electronic transaction storage to networked data transmission, mass-market retailers have advanced from standalone cash registers through electronic registers, soon linked to the store computer, to point-of-sale terminals connected through wide-area networks.

What's interesting at present is the convergence of these two trends, and the dawn of a new world in which cellularly networked smartphones are able to run applications that bridge much of the remaining gap. Today's smartphone-wielding customers can make purchases using a digital wallet or a major debit/credit card, moving seamlessly between e-commerce sites online, retail outlets of nearly all sizes and the vending machines at work. Readily available technology can integrate micromarkets and amusement equipment as well. And many of these retail outlets can accept cash too.

The features of this new landscape have been coming into view for the past decade or so, although there have been some note-worthy precursors. There always is an interval between the advent of a practical new solution, its adoption and its ramification. Mass-market retailers were using their new electronic cash registers and barcode scanners for a while before one of them (Walmart, in our recollection) conceived of using the data collected at each store, not only for cash settlement and inventory control but also to manage merchandise variety. By identifying the fastest-and slowest-turning items, it became possible to adjust reorders quickly – and to provide suppliers with detailed data on present and projected product movement, reducing their cost of sales and so lowering the cost of goods sold.

Vending management software, backed up by remote monitoring, now provides this kind of inventory-turns analysis. To date, that capability has been used to improve route efficency by tailoring schedules to inventory depletion in machines. It has the potential to do much more.

New technology almost universally progresses from an initial gee-whiz stage, in which early adopters often use it as a public relations tool, through a period of cautious implementation and learning and, finally, to becoming familiar and comfortable enough for operators to think about what else it might do to streamline their businesses, promote sales and build business. We are now starting to turn that corner.

One effect of the present proliferation of new networked applications is that it has brought a number of long-running industry conversations to an end. Vending machine manufacturers always were caught between the demand by a small but influential group of operating companies for new promotional and customer engagement tools (though not always called that) and the resistance of a large group of operators who felt that their businesses were running fine without any more complexity, and accused the manufacturers of simply adding bells and whistles to justify charging higher prices for the equipment. Moving that interactive functionality out of the single machine and onto a network has made it an optional add-on that operators can adopt, selectively, when they see the need. This also should end the unprofitable argument about whether calling a dispensing system a "vending machine" is less appealing than calling it a "robotic retailer" or a "kiosk." Everyone has better things to do.

In VT's Sept./Oct. 2018 issue, we take a look at some examples of operators and technology providers who are doing them. These include 3D Vending (Riverside, CA) which is deploying Vagabond Vending's vīv smartphone payment system (see Page 10); and Foley Foodservice (Norwood, MA), which is taking advantage of the PayRange system that uses a Bluetooth personal-area network to enable cashless payment at machines not able to use a broadband wireless connection (Page 12).

Five Star Food Services (Chattanooga, TN), which has made effective use of USA Technologies' ePort cashless payment system, now is conducting promotions through its ePorts (Page 16); and Seven Day Vending (Tucson, AZ), has been working with Apriva and Crane Payment Innovations MEI technology to benefit from cashless payment and telemetry without making major changes to its vending management system. And we present updates from Crane Media Network's Sharon Peyer and USA Technologies' Maeve McKenna Duska on developments in the use of vending machines as important elements in suppliers' consumer advertising and sales promotion programs.

We can only imagine what will happen next, but it's sure to be interesting.