Tuesday, January 23, 2018 | Today's Vending Industry News
UPFRONT: Who Will Patronize Vending Machines In 5 Or 10 Years?

Posted On: 10/31/2006

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I've just returned from East Lansing, MI, where VT's editor-in-chief, Tim Sanford, Elliot Maras of Automatic Merchandiser and I had the pleasure of speaking to a group of students at Michigan State University on the historical and future perspectives of the vending industry.

For those of you who haven't been following the major education initiatives undertaken by the National Automatic Merchandising Association Foundation over the past five or six years, NAMA has endowed a professorship at The School for Hospitality Business at MSU. The NAMA endowed professor, Dr. Michael Kasavana, teaches the first-ever college level course on vending, which he calls "V-Commerce."

Tim offered a historical overview, and Elliot reviewed recent developments and the industry today. I chose the topic of promotion and marketing, and suggested ways in which technology might be used more effectively to communicate with today's (and tomorrow's) vending patrons to increase their confidence and satisfaction, enhance our image and strengthen their perception of vending's value. You can listen to a "podcast" of the class by visiting NAMA's website, vending.org, clicking "V-Commerce" on the menu at the left, and choosing "Vending Perspective" from the popup list.

As I spoke to the students and looked at their young faces, I realized that they represent the future of our business on the management and technical side. But what about the future customer? Who will be patronizing vending machines in five or 10 years?

Enthusiasm for technology seems to come and go in waves. The immediate postwar years are remembered by those who lived through them as a great age for gadgets: television sets, jet airplanes, record changers, pop-up toasters -- even vending machines! From the mid-'60s to the late '80s, however, a reaction set in, at least in the United States. These social attitudes are difficult to nail down, but there was a widespread sense that things were moving too quickly and life was becoming too complex and depersonalized. People who felt this way tended to resent the need to advance from dealing with people to using machines, whether those machines were early ATMs, self-service gasoline pumps or (yes!) vending machines.

That all changed, again, in the 1990s. Young adults today often prefer an ATM or a self-serve gas station to a sometimes-surly human. Kids are supremely comfortable using complicated instruments like digital cameras, iPods and Blackberries. They listen to wireless satellite radio and send text messages instead of phoning their friends. They'd rather purchase products online than go out to a store. Not only have they embraced new technology: they demand it, and when given the option, they usually will choose automation over human interaction.

We've often expressed our editorial opinion that much more could be done with today's vending technology than is being done, and that too many operators (and, perhaps, too many location managers) learned lessons a quarter of a century ago, about consumers' response to vending equipment, that they really ought to unlearn.

In today's technologically aware world, might young consumers have a more positive opinion of robotic retailing than vending operators do? There is reason to think so.   We've observed people getting off an airplane and exclaiming with delight (really!) at finding a well-equipped, well-stocked vending bank in the concourse. People who have taken readily to making their reservations with a keyboard and monitor instead of a travel agent, and checking in at an "e-ticket" terminal, are not going to regard a clean, filled, working, conveniently situated vender as excessively impersonal.

This train of thought always prompts the next question: can we imagine consumers actually seeking out a vending machine for the "wow" factor that the technology has to offer, like making a purchase with a cellphone or PDA? There has been a growing sense among operators, over the past 10 or 15 years, that people do enjoy watching a glassfront push a snack off the shelf, or drop a bottle without breaking it.

An earlier generation of astute operators wondered whether a single-cup coffee machine with a see-through window might convince people that "vended coffee" was not inherently worth less than coffee served manually after sitting on a hotplate for an hour and a half. The whole-bean coffee vender doesn't display the brewing process, but many of them do show you the beans in motion and let you hear the grinder. Operators who took the time to conduct little demonstration-and-festival sessions when installing "bean grinders" found that doing so increased unit volume at a higher vend price.

There have been many perceptions of that sort, but the industry has not adopted a forward strategy for merchandising. Are we missing an opportunity to market vending as a superior retail mode to tomorrow's young adults? Might the younger generation actually be more receptive to automatic retailing than we are? Operators who serve schools report that kids love vending machines. Why are we not harnessing that affection?

The consumer of the future is not jaded by experiences of the past. The students I spoke with cannot relate to the factory workers of the "smokestack" economy, four decades ago. They haven't learned that vending is a "last resort" source, and don't have a preconception of low quality necessitating low prices. The younger generation has open minds -- at least about its purchase options -- and it is adventurous, willing to risk some money to try new things. This has not gone unnoticed. I just read that Starbucks and Pepsi-Cola have developed a branded packaged hot beverage vending machine. And we've all heard about the new Motorola cellphone venders from Zoom Systems.

I believe that it is high time for a fresh, positive and forceful approach to marketing in vending. Operators need to take their cue from other retailers; vending machines are not going to sell themselves ("there's nothing automatic about automatic retailing," as the saying went, half a century ago). For vending to compete in the future, we need to create new opportunities, find new customers and expand our location base far beyond the workplace. This is our only long-term hope. Robotic retailing is going to advance and grow; it is, after all, a part of retail automation. Our challenge is to make sure that this industry is the one to reap the rewards.