Sunday, November 19, 2017 | Today's Vending Industry News
The Future Arrives, Again

Posted On: 12/26/2010

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This month, we say farewell to 2010, and we do not think it will be missed. There has been some discussion recently about the supposed end of the 2008 recession (perhaps as long ago as midsummer 2009), but many of us have not noticed.

It has been known, for a long time, that vending is a reliable "leading indicator" of the economy's direction. Because vending was one of the earliest victims of the present economic transformation, it appears to be among the endeavors that has taken the most effective steps to recover. This has happened before.

The key this time is networking. While the earliest vending "telemetry" concepts were demonstrated almost four decades ago, the advances in wireless technology that took place in the 1990s, and the consequent surge in demand for wireless services, has at last brought reliability and cost-effectiveness into the realm of the practical.

Everyone who has been paying attention over the past eight or nine years is familiar with the argument that operators, confronting the need to boost per-machine revenues and reduce expenses, can do both by frequently analyzing the sales from every machine, correcting the menu accordingly, adjusting the load plan to lengthen the intervals between services, and visiting the machine only when replenishment is needed.

On the eve of a new year, it may be time to expand this argument. "Just-in-time" restocking, and the route cost economies it can provide, seems to have the potential for making marginal locations profitable again, and for opening up smaller sites to more sophisticated vending.

Traditionally, new technologies like bill validators, multiprice coin mechanisms and change dispensers were seen to have that potential, too. The problem was that low-volume sites required low-cost equipment, and the improvements that could maximize revenue might well increase costs more than the resulting sales lift would offset.

The situation today is different in a number of respects. For one thing, today's smaller locations often lend themselves to combinations of service methods. Placing a single-cup coffee brewer next to a glassfront combination snack and cold drink machine seems to offer some possibilities that are worth thinking about.

There have been fairly extensive deployments of networked countertop brewers, in France and elsewhere; the purpose is to keep a central office informed of product consumption and to send an alarm if the machine malfunctions. Since the link is bidirectional, the system also can send information back to the brewers on location for display on a small monitor; this can contain anything from real-time traffic or weather maps to sports scores and advertising. The point here is that, if a single network interface can be used to interact with one or several coffee brewers and vending machines, the expense can be allocated among them.

For another thing, today's vending patrons also have wireless capabilities -- which many of them use for "social networking." There has been a good deal of discussion about using the "new media" to connect more directly with these customers, and there surely will be more in 2011.

There are other ways to look at this. Many, many years ago, we ran into an operator who really was doing small-location vending, though at the time, it was thought of as a sort of coffee service. He had purchased a great many used soluble-product hot beverage vending machines, which had been made obsolete by the new fresh-brew 72" coffee venders and so could be purchased cheaply. He refurbished them nicely, and added a unique feature: a lever switch that was held open by the stack of cups in the turret, and closed after a certain number of cups had been vended. When it did, a lamp behind a smiley-face transparency on the front panel began to blink, accompanied by the message, "call for service." Of course, someone would comply, and he could schedule a delivery. His costs, he reported, were so low that he could undersell all his competitors.

In retrospect, this was remote machine monitoring, but it engaged the patron as the monitoring agent. What may be worth taking away from this reminiscence is that today's operator does not have to do everything; customers have capabilities too. There should be ways in which patrons can be invited to participate in obtaining the kind of service they want, and rewarding them for providing information that the operating company needs to provide that service. Done imaginatively, this kind of thing might not only keep sales and interest up, but build loyalty, too.

The new technologies often are seen as transforming the business, and no doubt they will. But perhaps it is helpful to consider their role as refining, or perfecting, the business.

The old vending model, when it worked properly, was based on good communication from patron through driver to supervisor to operator, and it resulted in excellent, timely and responsive service. Today's technology can increase speed and reliability, but it only will be helpful if it produces the same result.