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Posted On: 4/12/2012

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Amusement Expo, advertising, marketing, vending machine industry, bulk vending, vending times, vending machine, office coffee service, vending machine business, amusement business, Vending Times, Alicia Lavay, coin machine business, coin-op, food service, National Bulk Vendors Association, NBVA, National Automatic Merchandising Association, NAMA, jukeboxes

Alicia Lavay

Since I returned from the 2012 Amusement Expo and National Bulk Vendors Association trade show, I've been thinking about where this industry has been and where it might be headed. The music and amusements business as we know it today is on the trailing edge of a wave that crested in the 1960s, and now is almost exhausted. It must transform itself into something else, and I think it will, but it will likely be unrecognizable to those who pioneered it more than four decades ago.

Fifty years ago, street operators met the demand for access to products that consumers could not afford to have at home, like high-fidelity stereophonic phonographs, pinball machines, pool tables. Those things apparently have been superseded by inexpensive home models and portable consumer electronics devices.

But it's not all doom and gloom. Some manufacturers are doing well because they offer consumers experiences that cannot be duplicated at home or on a handheld device. And while jukeboxes offer experiences more or less similar to those you can get with an iPhone and iTunes, those gadgets don't provide the social element or the "audience effect," as it was called by defenders of motion pictures against the perceived threat of television in the 1950s. This also applies to games. Having a pool table in the basement is nice for parties, but it doesn't offer the same experience as joining a pool league.

A major change is the rise of social media and the lines of communication they've opened. A prime benefit of social media is that they allow sellers to communicate directly with buyers, and to receive feedback from them. To be successful, today's operator (and manufacturer, supplier and distributor) not only must provide good products and services, but also must become a consultant to locations and a purveyor of an "experience" to consumers. This puts a premium on the operator's skill as a sort of social director.

Customers are attracted by state-of-the-art equipment that not only is more sophisticated than its home equivalents, but comes surrounded with a social magnetic field or aura. It can be argued that the tools with which operators and their associations organize, publicize and administer activities that please large numbers of people across wide areas is extending the life of well-loved self-service equipment by embedding it in a social medium that cannot be duplicated in your basement. This, increasingly, seems to be the value we add to the hardware. Anyone running equipment is in a relationship with locations and consumers -- and that's where social media come into play, because they can interconnect all three parties. What makes me optimistic about music and amusement operators is that they always have known that they are in the entertainment business -- and social media are in fact entertainment.

Vending is different. The appeal of vending has not been that it provided things that you couldn't get at home, but rather, snacks and food and drinks that you do enjoy at home. Vending can provide them at any hour of the day or night. The challenge, though, always has been that machines are impersonal. Imaginative operators have worked hard to run them in the context of a personalized service organization that customers like and trust, often with considerable success.

But today, classic vending machines increasingly limit the consumer's options -- to buy something organic and "healthy," for example, and to pay for it with a credit card or a smartphone, and to participate in online sharing of experiences. Vending is striving to overcome the technical challenges, but vendors also would do well to start thinking of themselves as entertainers.

An example how the vending industry is using social media to its advantage is the National Automatic Merchandising Association's Vend.Love.Win Facebook contest, designed to increase awareness and excitement about the vending experience. NAMA hopes to motivate young people who have grown up relying on vending as a convenient defense against snack attacks to share their pleasure. The contest may be followed at facebook.com/VendLoveWin.

What, then, can we learn from one another? Whether you run full-line vending, jukeboxes or pool tables, you are in the business of pay-for-use self-service equipment, and to be successful, you must learn to communicate with customers in a way that's meaningful to them. Many things music and games operators do well are things vending operators will need to learn how to do. Running a pool league is, in effect, running a loyalty program.

Consumers -- especially young adults -- crave opportunities to express themselves, and they find interactive experiences entertaining and engaging. It's up to us to provide them. Our customers are interacting online, and we have to join the conversation. We must reinvent ourselves.