The Next Small Thing

Posted On: 10/26/2016

  • Printer Friendly Version
  • Decrease Text SizeIncrease Text Size
  • PDF

TAGS: Vending Times editorial, vending industry, vending editorial, retail automation, vending operator, vending industry history, coin machine, coffee service, food service, Tim Sanford, Brad Bachtelle, disruptive technologies, vending machine menuing

Those who attended the seminars conducted by industry market research pioneer Brad Bachtelle for the National Automatic Merchandising Association several years ago will recall his discussion of the great advantage possessed by operations that can implement changes quickly and smoothly.

One of the points he emphasized in making this argument is that vending operators traditionally have tried to avoid adding a newly popular product to the menu until they're confident that its popularity will persist. In the days of manual inventory control and auditing processes, adding something called for a bit of detailed updating of lists, and removing it imposed the same burden. It was easier to wait and see whether the innovation gained any lasting traction in other retail channels.

Bachtelle urged vendors to rethink that resistance, arguing that if lots of people want to buy something, the best thing to do is to find a way to sell it to them. If they stop buying in six months, you'll still have made a lot of sales.

We think this makes good sense, and the policy has never been easier to implement or more appealing than it is now. A process built around machines that capture line-item sales information and vending management software can make it quick and easy to add a new item, track its sales performance (by location type, if desired) and decide whether it's worth offering. The ready availability of basic warehouse automation makes trying trendy new things even more attractive.

We've always known a few operators who enjoy introducing novel items into the snack machine display in order to keep consumer interest up. The range of suitable products was limited, for a long time, by the perceived difficulty of vending single-serve products for more than $1. The rapid acceptance of cashless payment systems has removed that barrier, and the steady (although not much discussed) inflation in food cost has encouraged operators to price products realistically. And the advent of micromarkets offers a remarkable new vehicle for operators (and suppliers) to test new items and track their successes.

With all this going for us, a remaining problem may be one of context, or of expectation. New technologies seldom are immediately "disruptive." They are born into a world using familiar tools, and they are presented as improvements to those tools. The first popular use of desktop "home" or "personal" microcomputers was as an alternative to typewriters that offered much easier editing and correction. Small businesses also found them fast and versatile alternatives to electromechanical calculators. It took time and a good deal of additional development to widen their roles.

There always is some tension between the satisfaction of having adopted a new instrument that enables you to do familiar things faster and better, and the recognition that it also enables you to do things that you just could not have done before.

It certainly is valuable to gain greater control over a familiar menu limited by price constraints, identifying the fastest- and slowest-turning items with an eye to periodically replacing the least-popular selections with promising new entries. Operators always have done this; it can be done much more quickly and accurately today. It might be equally valuable to apply these tools to introducing a wider variety.

Twenty five years ago, operators found that offering larger single-serving packages of popular snack items on the top shelf of a glassfront machine was an effective sales-builder, even if it involved two facings of the same branded item in different sizes. We think there's reason to believe that growing segments of today's market would respond favorably to a choice of two items in the same category that differ in perceived quality, even if the more upscale one is a smaller package.

We've made this argument before, and we think it's more valid today than it was decade ago. The number of attractive grab-and-go items in "specialty" channels continues to increase rapidly. Quite a few of them have potential mass-market appeal, or appeal to important demographic cohorts who are not traditional "health food" enthusiasts.

An added benefit of adding one or several tiers of premium, higher-priced items to the vending menu is that offering customers greater choice increases the likelihood that they will buy something.

Forward-thinking operators have tried something like this in at least some of their locations for a long time. We've heard many accounts of the surprising difficulty a vending company can experience in trying to purchase products not targeted to the vending channel. Helping suppliers understand that vending and micromarkets serve a very broad market, vastly more diverse than the old industrial workforce that was dominant six decades ago, is a task we all should undertake.

It's important that operators also understand this viscerally, too. Vending machines and micromarkets are no longer widely regarded as purveyors of last resort, but rather as convenient and efficient options judged individually not only by how well they work, but what they offer.