Saturday, November 18, 2017 | Today's Vending Industry News
Need To Know

Posted On: 12/14/2004

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In the wake of the election, one topic that has received a good deal of discussion is the growing inability of exit polls to deliver an accurate picture of what voters actually are doing. Citizens have become adept at expressing views that they regard as acceptable to their peers, and reserving their own opinion for the voting booth.

By the same token, it has been observed that today's consumers have become fluent in the language of marketing,  especially younger ones. Asked to rate a new product, they increasingly tend to offer an informed view of the target demographic and the plausibility of the product developer's attempt to address it. What they no longer provide is an individual, unselfconscious response to the product itself.

Luckily, retailers of consumer packaged goods increasingly are able to capture sales data automatically, through scanner-equipped electronic cash registers. The "DEX" capability of contemporary vending machines offers the same opportunity to operators, more and more of whom are assessing that capability and putting it to use.

We think this development is creating a consumer market research instrument of almost unlimited power and flexibility. Instead of asking people whether they prefer A or B, it becomes possible to offer A and B to a good cross-section of the away-from-home consuming public at a promotional price, or under some other arrangement that maximizes trial. One then would need only to analyze ongoing sales information to learn which item, or version, was generating stronger repeat business.

People will buy what they like, especially when no one is looking. They often are not good at explaining why they like it. A vending machine offers a limited number of selections and good facilities for calling attention to a few of them. It also offers anonymity to the purchaser.

Beyond the advantages that this kind of closely controlled testing mechanism offers to product suppliers, we think it offers even greater ones to the operators themselves. For an industry generating more than $40 billion in annual sales, vending has attracted surprisingly little attention from students of consumer behavior. There have been some distinguished exceptions over the decades (like the two graduate students at Purdue University who worked with the Indiana Vending Council about 30 years ago to study vending purchasing decisions in detail), but there have not been many.

Will consumers pay a premium for a well-publicized variety of specialty coffee, when offered a choice? Will they buy more frequently if they can choose a soluble dairy-based creaming agent? Will they pay more, or buy more, if offered a cup with enhanced insulating properties? These questions have been around since the old Coffee Development Group began to investigate them in the 1980s. Today's dual-cup-format hot drink machines are ideal test instruments for finding out.

Can the placement of merchandise in a glassfront snack machine affect purchasing, as many operators have long believed, or will consumers find what they want regardless of position, as other operators contend? Does moving items around in the display, from time to time, bring new things to customers' attention and thus encourage trial, or does it simply confuse people? What attributes of a package (size, construction, format, graphics) have the greatest effect on consumer perception of value? Can a pricing incentive encourage patrons to purchase two items at once, one for immediate consumption and one for later enjoyment? All these questions have been around for generations. They now can be answered reliably.

We think that the National Automatic Merchandising Association's historic engagement with the academic world through the NAMA Foundation opens the door to solid consumer research that would yield ongoing benefits to operators, locations and consumers. However, operators need not wait. Anyone who has implemented the vending industry data transfer standard, or DEX, and who thus can retrieve column-level sales information reliably, is in a position to start a research program tomorrow.

A fringe benefit of doing this, and of conducting periodic surveys to determine patron and client satisfaction, is that people like to know that their preferences are being taken seriously. It's worth doing, and it's worth doing now.