Monday, December 18, 2017 | Today's Vending Industry News
Millennial Vending Industry Executives Offer Generational Perspective On Workplace Evolution

Posted On: 10/3/2017

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Young vending industry executives are offering insight into the changing workplace model as their millennial peers move into leadership roles in the business world. Six executives belonging to the Net Generation and employed by the industry shared their perceptions during a panel discussion at the National Automatic Merchandising Association's national convention in April in Las Vegas. The panelists attempted to predict what convenience services might look like in 2020.

Elyssa Allahyar-Steiner, marketing director of Cantaloupe Systems (San Francisco) and chair of NAMA's Emerging Leaders Network, emphasized that a prevailing theme among millennials is work-life integration. "We go home and keep working, but also want flexibility and downtime while at work," she remarked. "It's all about how I want to spend time in my space and separate when I want to."

What Matters?


Amanda Sulc, director of category insights and strategy at Accent Food Services (Pflugerville, TX), observed that qualitative factors like healthcare and bonuses are not as important to millennials as flexibility, which includes working from home and in collaborative spaces at an office.

"It's also very important to us to have consistent feedback and a pat on the back," Sulc said. "We like to know where we stand, and know there's a path for us with the company and it's going to invest in us. We want to have a lot of freedom and know we can grow."

TAKE IT FROM US: Elyssa Allahyar-Steiner (second from right), marketing director of Cantaloupe Systems (San Francisco), moderates panel of young industry executives to provide perspective on how their generation is driving changes in workplaces. Pictured, from left, are ELN members Ashilyn Sunderman, Smith Vending (Clarinda, IA); Chris Hart, Southern Refreshment Services (Tucker, GA); Amanda Sulc, Accent Food Services (Pflugerville, TX); Juan Jorquera, Vagabond Vending LLC (Washington, DC); and CJ Recher, Five Star Food Service Inc. (Chattanooga, TN). The savvy six reviewed how management styles and business practices are changing, the evolution of payments, the competitive landscape, delivery service trends, and the continued importance of social media and collaboration.


Education and mentorship and the feeling of being part of something bigger are among the qualitative factors that millennials value over monetary compensation, Sulc emphasized.

"Millennials will leave in 18 months if there is not a [career development] for them," she continued. "We like to work from home, but we like to collaborate. A big trend is that multiple companies share co-working spaces with shared micromarkets and microkitchens, which is an opportunity for our industry."

Collaboration

Juan Jorquera of Vagabond Vending LLC said his company, a provider of route management and data analytics tools to vending operators, shares space in Washington, DC, with other hi-tech firms and marketing agencies. It has a common area that includes a mini coffee shop and beer on tap among the shared amenities. "It's all about the collaborative environment," he stated. "We've serendipitously engaged with other organizations we never would have interacted with if we had a walled-off office of our own."

Sulc emphasized that millennials don't approach work as simply doing their job and going home; to them, it's an experience and a lifestyle. "They expect to have food available throughout day, and treadmills," she instanced. "It's all-encompassing that they expect work to add value to their lives. Added services and amenities are what will keep them there and fuel the fire for them to stay with you through their careers."

As millennials seek career advancement and workplace amenities, more employers are becoming eager to remodel workspaces to better accommodate them.

Chris Hart of Southern Refreshment Services (Tucker, GA) said he sees a definite trend toward more upscale breakrooms and increasing demand for micromarkets. Amenities like WiFi and ping pong and foosball tables are becoming commonplace to encourage employees to leave their desks, take a break from work, and collaborate, he added.

CJ Recher, marketing director of Five Star Food Service Inc. (Chattanooga, TN), said that, in his Midwestern market, traditional breakrooms and vending banks are predominant, "but we're feeding off other markets and know what expect."

Payments

All of Southern Refreshments' micromarkets accept credit cards and 58% of its micromarket sales are cashless, according to Hart. Cashless payments average 35% of sales in Southern's 4,800 machines. Hart said about half of the company's machines are equipped to accept credit card and mobile payments and it will add an additional 1,400 card readers this year.

Hart added that Southern landed a vending contract at a college that had not had cashless payments as an option. Sales reportedly tripled with Southern's addition of card readers and cashless now represents 90% of sales.

Prepaid micromarket cards account for 40% of sales in Accent's self-checkout stores and credit cards represent the remainder, according to Sulc. Two-thirds of the company's vending machine sales are cashless.

As mobile systems take hold as a preferred payment method for millennials in the places where they dine and shop, Vagabond is offering the Viv app in the vending space. "Patrons don't have to touch the vending machine. They just choose and purchase their product using the app and watch the product drop," Jorquera explained.

He pointed out data that suggest 45% of 18-to-49-year-olds are not concerned about carrying cash, in contrast to 21% of those 50-plus feeling comfortable relying only on cashless payment.

"Half versus a third is a significant distinction, showing where payment methods are heading," he said. "Mobile transactions have multiple layers of security. Transactions are tokenized. It's a much better experience the way retail is going. People don't love EMV and having to wait 10 seconds until the reader yells at them to take the card out. Mobile is the direction we're moving toward."

The Vagabond executive added that a service called Venmo has accelerated the pace of millennials becoming conditioned to using mobile payments. Owned by Pay Pal, Venmo allows users to transfer money between one another via a mobile phone app. Venmo currently has around 203 million active users.

"They 'Venmo' each other if they're sharing a bill," Jorquera noted. "It's seamless; it takes seconds to move funds. In a year, Venmo doubled the amount of money it's moving. Cash won't go away, but it's becoming less and less important."

Recher said Five Star has 10,000 machines accepting cashless payments. The vending operation sees at least a 20% lift in sales with the transition to cashless acceptance, and another 10% above that when mobile payment is an option.

"The size of the transaction often goes up and they're more likely to buy more than one item," Recher said. "Mobile is easier and faster."

Steiner underscored just how ubiquitous the cashless movement is by instancing a San Francisco salad bar restaurant that accepts no cash. "Customers like it because they know they'll get through the line quicker," she commented. "More consumers stop at vending machines when there's cashless payment because they move through quicker."

Millennials are also big fans of loyalty reward programs. "Starbucks knows who I am and values me and I don't have to think about it," Sulc said. "It's easy because it's mobile and I get rewarded."

Transparency

When it comes to the foods they choose to consume, millennials' want transparency. They want to know where it comes from, who manufactures it and what ingredients are used, according to Sulc.

"They inspect packaging to see that it's tamper-proof and want it to be made from recycled goods," she said. "It's also about how does the company make me feel and what do they do good for everyone? Is this company pushing out product I can trust?" Locally sourced items are sought-after, she added, because they reduce environmental impact and transportation costs (sometimes passed to the consumer).

To millennials, artisan breads, all-natural meats and cheeses and locally sourced fruits and vegetables are fast becoming the rule rather than the exception to suit their healthy lifestyles and demand for quality foods. Millennials are less brand loyal than earlier generations and willing to try more foods, Sulc said. A farm-to-table offering in a vending operator's commissary might help the business win the demographic.

Steiner added that millennials care about the charities and causes that the companies they work for and patronize support, and their shared values. "Pay more attention and engage more with millennial customers on a social level," she advised.

"Millennials are cynical," Vagabond's Jorquera observed. "We think the world is ending and we want to save it and play our part to fix things."

Millennials also want to be informed about the products they consume and companies with which they do business. They will read blogs and Twitter posts but are easily dissuaded if they feel they are being too heavily pitched rather than informed.

"References from peers and friends are very influential to millennials," Hart said. "If they see it on Twitter, it earns their trust. Now it's not just word of mouth, it's on social media and the word will continue to spread beyond their circle of friends." But millennials are just as apt to tweet negative experiences, he cautioned. "If that happens, however, we are quick to respond and rectify the situation and show we care about the end user," he said.

Amazon Factor

The industry's millennials offered insight into vending's new competitors. They are watching alpha retailer Amazon, the online leader that's now getting aggressive in the physical world with Amazon Go self-checkout grocery stores and other concepts. Alternative office delivery services are also proliferating.

Sulc said that while employers provide pantry services free of charge to employees, services like Uber Eats and Favor are becoming popular, allowing employees to use a mobile app to order meals for delivery from their favorite local restaurants.

"How do we compete and add value? Compared to Amazon Go, we can give them everything they want free of charge right there without them having to leave the office, which gives clients an advantage to gobble up talent," Sulc said.

Southern Refreshment has partnered with Food Hub and other local meal-delivery services to complement its micromarket offerings. Food Hub sources the sandwiches and sells its chips and drinks. Five Star has formed similar partnerships with local delivery services in its region.

"Food delivery comes with a cost, at a premium," Jorquera pointed out. "And nothing is more convenient than vending and micromarkets. We can't compete with a $20 entrée, but that's targeting a different segment of the market. Your equipment and product is already there. Merchandising and using data to provide the right products is key."

Cantaloupe's Steiner believes there are opportunities for vending operators to partner with retail technology concepts like Amazon Go and Uber Eats. "They're the experts at supply chain management and just-in-time delivery," she said. "And we have captive audiences, and we can bring them value and new ways to leverage their brands."