Wednesday, January 17, 2018 | Today's Vending Industry News
Losing Customers Without Knowing It

Posted On: 9/21/2012

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TAGS: credit cards, validators, vended food, vending, vending machine, micromarket, micro market, self-checkout vending, food vending, fresh food, food service, mobile catering, Tim Sanford, Vending Times editorial, vending machine payment technology, single-serve refreshments

Advances in display and payment technology, aided by faster and cheaper wireless networks, seem to be fostering another wave of interest in vending as a highly visible and engaging retail medium. This interest has been intensifying recently, not only for the sale of single-serve refreshment items but also of nontraditional products. These initiatives always attract media attention, whether they involve vending blue jeans in Tokyo, gold ingots in Singapore, designer t-shirts in New York City or umbrellas in London. Many of them are marketing programs of limited scope, conducted in prestigious retail outlets, with the vending component serving primarily to publicize a brand. Others, though, are designed to bring the advantages of vending to the sale of nontraditional items.

This idea is a century or more old, and there have been some interesting precursor attempts; but it has been made practical by today's versatile and reliable high-denomination bank­note validators plus widespread public willingness to entrust substantial payments to vending machines and "kiosks." As an upscale robotic retailer, a vending machine has obvious appeal in high-traffic public locations. In a mall, for example, a vender occupies a fraction of the space required for the smallest store, and is an ideal advertising billboard.

These new initiatives can be helpful to our industry by enhancing consumers' perception of vending and stimulating the continuing development of technologies that can be put to profitable use by operators. But it is important that they be conducted according to principles known to the vending industry for a long time, one of the most important of which is that a machine that does not work properly not only loses sales, but also creates distrust that can be very difficult to dispel.

And new technology always brings with it new ways for things to go wrong. This is not only true of vending, of course, but it does require vigilance on the part of anyone operating unattended points of sale.

One area in particular seems to merit attention. This was brought to our attention by a long-time colleague whose circumstances involve her in a wide variety of shopping experiences. She reported that she recently was in a mall, where she encountered a friend who had been directed by a website to a "kiosk" in the mall that sells skin care products desired by her daughter. They found the machine, which only accepts cards (no cash) -- but it would not accept her card, although she had just made a purchase with that card in a nearby store. Fortunately, our colleague had a card that the machine would read, so the transaction was made.

We had a similar experience with a self-service laundry (no longer a "coin" laundry), which recently installed a card terminal as an alternative to the familiar bill validator for adding value to a prepaid card. This new terminal would not read one of our credit cards, but accepted another one without complaint.

We suspected that the laundry's management simply had decided not to accept cards from certain issuers, probably because of higher processing fees. And we think it plausible that this also was the difficulty encountered by our colleague's friend.

The challenge in this for companies running unattended points of sale is that, if the customer has only one major credit card and the machine will not accept it -- for whatever reason -- he or she is unable to complete the sale, does not know why and has no idea of what to do about it. At a minimum, we think anyone operating equipment that accepts credit and debit cards should provide a sign stating clearly what cards it will accept. A humane step up would be the ability to display messages telling the patron why the thing isn't working, and suggesting alternatives. And an operation with many such "kiosks" and an online retail business (like the skin care products purveyor) might explore a function permitting a customer to use his or her smartphone to log onto the website and initiate a local vend.

Many of the rough edges encountered by users of new technology get sanded down as a result of experience. We sometimes think that this is because those users generally have the opportunity to complain in person to a clerk or customer service representative, and so the organization is aware that it has a customer relations problem. The difficulty for vending -- for unattended points of sale of all kinds -- is that the operators never know when patrons are unable to get a machine to do what they expect it to do.

It might be argued that computer-makers have gotten away with wholly unsatisfactory error messages for more than three decades, and they still are selling computers. We would reply that they might sell more if they paid some attention to this inadequacy -- and that people who buy computers generally have a compelling need. But vendible products are discretionary.

In the early days of cellular telephony, a major carrier ran very effective commercials emphasizing that great infrastructure is irrelevant, "unless the call goes through." We need to address the similar truth that advanced technology is irrelevant unless the vend is made.