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Posted On: 1/11/2014

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TAGS: Vending Times editorial, vending industry, vending editorial, retail automation, vending operator, vending industry history, coin machine, coffee service, food service, Tim Sanford, vending technology, 2013 vending industry reflections, intelligent vending, Intel, GPS, global positioning systems

The approach of a new year always brings with it reflections on the past and hopes for the future. There is a good deal to reflect on, as 2013 draws to a close. For example, the implications of the revolution in wireless communications are beginning to sink in. The ability to enable machines to send detailed information to one another, and to their operator, without physical connection has opened up a whole new realm of possibilities. Intel Corp., which has popularized the term "intelligent vending" to describe networked microprocessor-controlled vending equipment, is now speaking about the "Internet of things."

While we think there are some limits to the usefulness of adding network interfaces to some things -- pop-up toasters, for example -- there are virtually no limits to the potential for appropriate applications.

One use of "intelligent vending" that has attracted a good deal of attention is the appearance of machines selling unusual things -- cupcakes, caviar, upscale cosmetics and so forth -- in public locations. We doubt whether most of these initiatives would work as standalone profit centers. Rather, they are a sophisticated implementation of the ancient "sales stimulator" concept that gave rise to one of the first commercial vending applications.

In the early 20th century, popular confections for mass consumption usually were displayed in bulk and purchased by weight. Early bulk vending machines were used by confectioners to enable their customers to buy a handful of something to sample before ordering a quarter of a pound of it. This stimulated sales not only by encouraging people to try new flavors, but also by calling customers' attention to the confection category. A machine that recommends and dispenses products like cosmetics takes that venerable marketing tool to a whole new level.

With the rise of gourmet coffee stores two decades ago, we wondered why none of them had worked with a major vending machine manufacturer to adapt the grinders and brewers used in whole-bean coffee machines as sales stimulators. We could imagine a row of glass-and-brass display bins that could deliver a freshly brewed cup of whatever coffee caught the customer's interest. This, again, would encourage people to try something new without having to buy a lot of it. We also thought that it would be a nice gesture to attach a neatly lettered card to the display explaining that this new freshly ground coffee sampling technology was, in fact, widely available, disguised as coffee vending machines. We still think this is a good idea, and it gets better if you envision it enhanced with informative interactive video displays, pattern-recognition software to interpret patrons' facial expressions, and the rest of the "intelligent vending" tool­kit. Capturing consumer information also suggests a number of online sales strategies. If patrons like an operation's coffee, why would they not order it from its website?

The "Internet of things" also extends to motor vehicles. In fact, commercial vehicles were early users of data-capture technology successively enhanced by the civilian availability of global positioning system signals, some two decades ago, and steadily growing access to more and more extensive wireless networks.

Many operators have devoted a great deal of time and attention to streamlining their sales analysis, product forecasting, remote monitoring and warehouse order-picking processes in order to tailor their delivery schedules to machine inventory levels and so keep route costs to a minimum. If they're not also using capable automated vehicle location systems to monitor their trucks in the field, we think 2014 is a good year in which to start.

The ubiquity of affordable wireless communications, and cashless payment systems that make use of them, also holds great promise for the industry. It's interesting to recall that, just a few years ago, everyone knew that mobile phones could be used as payment media, and "m-commerce" was seen as the wave of the future, but no one could figure out how the transaction fees were to be collected. This question has been resolved, and consumers have a growing range of options for paying by phone at the point of sale.

The steady increase in the power and capacity of smartphones has created an intriguing situation in which consumers have instruments in their pockets that can send and receive information in quantities and at speeds that would have been unimaginable in the last years of the 20th century. We think it would be relatively easy to devise a system in which the customer's smartphone would "handshake" with a vending machine using a local-area system like Bluetooth or NFC; the smartphone would take care of the payment authentication; the phone would communicate the vend authorization to the machine; and the operator's sales records would be updated in the "cloud" -- which also could receive machine status and audit data relayed through the phone. This would bring menu and route schedule optimization to the small locations where it is most valuable.

The new year is going to be very interesting. We hope it will be happy, too, for everyone.