What Will Happen Next? It's Up To Us

Posted On: 1/1/2018

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The New Year is about to arrive, hot on the heels of the National Automatic Merchandising Association's Coffee, Tea and Water conference. As always, that event gave its registrants a lot to think about, and the dawn of a new year is a good time to do that thinking.

Industry educational events always attempt to alert their participants to the underlying forces – technological, social, political – that are shaping the future in which everyone will have to do business. The past decade or so has seen these forecasts focusing on the need to come to terms with wide-area networks, from the Internet systems that upgrade dispersed points of sale to nodes connected to the operator's headquarters. This year's CTW program took a step forward, and concentrated on some of the effects of the widespread acceptance of these developments.

Those effects have not all been caused by straightforward application of communications technology to self-service equipment. The wrap up session at the conference was a panel discussion of what the panelists called "the Amazon Effect." This may be summarized as the profound change in consumer expectations in a world where just about anything someone might want is available at the touch of the screen or a few keys. This convenience has revolutionized shopping for clothes and appliances and a vast range of specialized and hobbyist products, and is starting to have a perceptible impact on grocery shopping. But, other than pizzerias with delivery services and some restaurants in heavily-populated areas, there have been no delivery services to meet the demand for single servings of food and beverages, when and where wanted.

Except, of course, for vending – and mobile catering, a fascinating business that has diverged from ours. Those industries emerged in the postwar economy to serve people at worksites outside city limits. Vending, which really was the Next Big Thing, evolved quickly into a method of providing hot and cold beverages, candy and snacks, food and cigarettes (those were the days) to factory workers, even those on the third shift or working on weekends.

In a very short period of time, this development prompted an outpouring of single-serve packaged products. An immediate beneficiary of this expansion of product categories was the convenience-store business, which grew quickly from a resource for people who had been unable to get to the grocery store before it closed into a popular destination for people on the move at all hours.

One Thing After Another

After the vending industry spent a decade familiarizing Americans at work with the microwave oven, this too enabled C-stores to expand their menus and widen their appeal. It wasn't long before trade show business sessions were being devoted to ways for operators to compete with convenience stores for the breakfast business: could we persuade people to drive straight to work and buy their coffee from vending machines, rather than at a C-store?

With that history in mind, we were intrigued to see that the "Amazon effect" panel included a 7-Eleven executive (see story on Page 13). The chain has teamed up with the e-commerce giant to install "Amazon Lockers" that enable customers on the go to order merchandise for pickup at the nearest store, at their convenience. This cooperative effort offers benefits to Amazon, to 7-Eleven and to the customers of both.

It is easy for a workplace to order its breakroom supplies from e-commerce websites that have no physical presence. The reason clients continue to deal with operators is that they want responsive, local service support and, perhaps, imaginative responses to workplace service questions. An efficient e-commerce site can compete with Amazon; the founder of one that does, Kirby Newberry of discountcoffee.com, spoke at the 2015 CTW conference. His message to operators was: "You have a better opportunity to sell than we do. If your customers buy from us, you've let them down."

For that reason, good workplace service providers have something that Amazon wants: daily access to American workplaces. The 2018 CTW panelists summarized this as "ownership of the last mile," and conjectured that it would be more cost-effective for Amazon (and perhaps other Internet giants) to make reciprocal arrangements with operators than to compete on the ground.

The idea of different service providers teaming up to meet client demands goes back a long way: vending operators subcontracting requests for ice cream machines to a local dairy, OCS operators subcontracting requests for bottled-water service to a local spring water bottler and so on and on. The old idea of "consultative selling" is that it's beneficial to give the customer the best solution, even if someone else shares in delivering it.

The reality of today's market seems to be giving new strength to this concept. If operators with different specialties find creative ways to partner with one another, and with their suppliers and manufacturers, on programs that will maximize the satisfaction of everyone's customers, everyone will profit – and we will all enjoy a happy new year.