Tuesday, January 23, 2018 | Today's Vending Industry News
UPFRONT: Food Vending: It's All About Perception And Marketing.

Posted On: 6/10/2006

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On a recent visit to the shopping outlets, my husband and I went looking for a place to have a quick lunch. There were a variety of food and drink options at this outdoor mall, but the lines in the food court were very long. After searching for a more convenient option, we ended up waiting 30 minutes to be seated at a local chain restaurant.

Later that afternoon when I wanted something to drink, I bought a bottle of water out of a vending machine. This got me thinking: if there had been a food machine nearby, might I have purchased a sandwich, to avoid the half-hour wait? Would I have perceived that sandwich to be fresh? If it were a popular brand, would that have influenced my buying decision? I knew that a bottle of water would be the same no matter where I chose to purchase it, but would I have felt the same confidence in a branded convenience food item? And would it matter to me whether the sandwich were sold refrigerated or frozen?

If there had been a comfortable seating area near the vending machines and the items were merchandised through an eye-appealing display, might vending have offered a  convenient and pleasant dining alternative to the food court? After all, why couldn't vending be another quick-service option? It's all about perception and marketing.

Last month, I suggested that vending in general had given up pricing flexibility in favor of technical and administrative simplicity, and now is suffering the consequences. I wonder whether this isn't one symptom of a long-standing inclination to define the industry in terms of what the operator conceives as the customer's view of it -- perhaps without much regard for what today's customer actually thinks.

Throughout the full-line vending revolution of the 1960s, there was much discussion about vending in comparison with other retail channels. Such slogans as "There's nothing automatic about automatic retailing" summed up the sense that people valued human interaction, preferring to go outside and pay a mobile caterer more for a sandwich because they welcomed the opportunity to talk to the driver about the previous night's baseball game.

The predominantly heavy-industrial market that encouraged the development of full-line vending was then populated by customers who, in many cases, were deeply suspicious of technology (recall what "automation" meant to a factory worker in 1965) and nostalgic for an idealized small-town way of life. They did not regard a bank of vending machines in the factory basement as a satisfactory alternative to a cozy restaurant. They vented their discontent on the vending industry by saying, in effect, "we'll only buy food out of these machines if it's cheap" -- and the vending industry listened. Operators learned their lesson, perhaps too well.

But consumers did not resent purchasing a slice of pie through a coin-controlled compartment in a Horn & Hardart "Automat." In fact, they enjoyed doing it for almost 90 years. Science-fiction writers like Edgar Rice Burroughs, who imagined automated restaurants on Mars, had convenience and speed in mind, not low price. But the "Automat" and the fictional Martian restaurants were standalone outlets, not concessions.

One of the ironies of the postwar evolution of vending is that retailers conducted many of the most imaginative experiments in robotic selling before the development of the technology needed to make them successful. Old-timers still remember these, from major department stores' ventures in self-service access to common items like handkerchiefs through vending machines in the early 1950s to the attempt to establish a chain of robotic hamburger restaurants in the mid-1960s. But the microprocessor hadn't been invented yet, and the available electromechanical systems simply weren't up to the task.

Then the need of large industrial workplaces for fast three-shift access to coffee, cold drinks, candy, cigarettes and food turned vending onto the course it has followed ever since. Operators became concessionaires, offering services that have become essential to American commerce and industry. And vending has grown and diversified as the workplace market has widened, engaged a larger percentage of the population, and become more demanding of time and diligence.

While our industry was building its market by offering convenience at work, the convenience-store business was transforming itself by offering convenience on the way to and from work. The evolving C-store business benefited greatly from single-serve products developed for vending.

Vending might have received a reciprocal benefit by emphasizing the value added by convenience. But price resistance was vocal, the old "wet mix" of hot and cold cup beverages was very profitable, and there was a lot of business to go around. So it was tempting to seek out smaller, lower-cost items that could be sold at lower prices...

Must vending always be the "source of last resort," condemned to charging the lowest price? Or might today's consumers be more enthusiastic about robotic retailing than vending operators are? Can vending widen its appeal?

In a recent article in Advertising Age, I read a thought-provoking story about Wal-Mart. One of its goals is to "edit" its product categories based on the demographics of each store's location. Their plan is to stock more relevant goods, including upmarket products, to get a bigger share of consumer dollars. To win over skeptics, instead of focusing on low prices, it changed its ads to focus more on product quality and the shopping experience.

Not unlike the Wal-Mart scenario, consumers already regard a vending machine as a low-cost, convenient source. What might happen if we began to emphasize quality and the shopping experience? (It's fast, it's fresh, it's fun...)

Couldn't the operator use point-of-purchase displays and sampling to focus on some of vending's virtues other than price, and beyond even convenience? How about going eyeball to eyeball with other retailers in offering branded, upscale, in-demand items?

We already know that consumers will use vending machines cheerfully when other choices are limited. Imagine if people actually went out of their way to make a specific purchase because they knew that machine stocked a desirable item for a competitive price? What if the consumer actually came to regard the vending bank as a destination?