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NAMA Launches Vend Market Data Analysis Program

Posted On: 4/25/2001

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LAS VEGAS - The National Automatic Merchandising Association announced a major initiative designed to rationalize the collection and analysis of vending sales information. Called "NAMAvision," the program was introduced at the association's Spring Expo here.

Dr. Michael J. Kasavana, who holds the NAMA Endowed Professorship at the School of Hospitality Business, Eli Broad College of Business at Michigan State University, introduced a panel session on "NAMAvision." He explained that NAMA has empaneled a Vision Committee whose mission is to enable the vending industry to take full advantage of the power of modern retail sales analysis.

To this end, the committee is pursuing the standardization of terminology, definitions and reports; the creation of a uniform, industry-specific system of accounting criteria; the formulation of product category management processes for vending (which Dr. Kasavana calls "v-Engineering"); the determination of requirements for certification of management software in conformity with the new standards; the identification of industry best practices and benchmarking criteria; and the syndication of industry news, trend analysis, reports and research. These all are important steps in the emergence of a new, much more broadly based and mainstream vend retail channel that Dr. Kasavana calls "v-Commerce."

Plans also call for the establishment of an Internet "port" linked to NAMA's website that will serve as a central data collection and dissemination point.

Dr. Kasavana serves as chairman of the committee, and Patrick P. Caffarelli, NAMA director of finance and assistant secretary/treasurer, is secretary. Subcommittees have been established to develop technical standards, including those for software certification; standardized industry terminology; to conduct a survey of product manufacturers and distributors, to assess the total size of the vending and coffee service industries; and to explore refinements to the Vending Industry Data Transfer Standard (VIDTS), maintained by the European Vending Association and NAMA.

With an efficient, standardized mechanism in place for collecting, concentrating and analyzing vending machine sales information, the new website (www.namavision.org) will evolve into a "vertical portal" (or "vortal") for business, a content-rich management site providing new products and services for NAMA members, Dr. Kasavana predicted.

He introduced the panelists, all of whom have made contributions toward upgrading vending market data collection and analysis and standardizing product definitions. Mary Jo Kirchner and Suzanne Silliman of Management Science Associates (Pittsburgh, PA) have played key roles in MSA's "Vendscape/Vscan" market research project. Warren Phillips of Validata Computer & Research (Montgomery, AL) was instrumental in enabling the project, based on information collected by vending route drivers with handheld computers. John Roughneen, who founded Streamware, also launched the industry's first handheld computer-based market data collection and analysis service, "InfoVend." Streamware is now a unit of Crane Co.

MSA's Silliman led off by pointing out that the way for operators to increase turns in their machines is to obtain timely and accurate information about what items are selling best, and trend data suggesting products that are gaining in popularity. "What we hope to do is gather intelligence for you: news, facts and data," she said. "We hope to provide a central channel that will deliver accurate information to you."

MSA is proud to participate with NAMA in the "Vision" project, she said, and is confident that it can make a real contribution to its success. The company has four decades' experience in market research, and has been studying the evolving vend segment for more than 20 years.

Streamware's Roughneen said that "Trying to get good data is why I got into the business." He recalled that the establishment of "InfoVend" in 1996 was not an easy task, since operators initially did not recognize the value of the information they were not receiving. However, increasing industry concern with improved route productivity through more sophisticated category management and sales analysis has prompted ever-increasing operator interest.


Work by NAMA's technical standards subcommittee on implementing and refining the vending industry's implementation of DEX direct data exchange, VIDTS, also is paying dividends by making it faster and easier to collect detailed, accurate information on the route, Roughneen reported.

Validata's Phillips said that he is excited about the promise of the "NAMAvision" initiative. "Thirty years ago, I had to learn everything the hard way," he recalled. "But everything was simpler back then. Today, business is becoming much more complicated; even the simple things aren't all that simple any more!"

An example is the straightforward formula for sales success, "Get the right product to the right place at the right price and at the right time," Phillips pointed out. The complexity involves assigning values to those variables; and it is here that accurate information is essential.

"Our Vision group is represented on the NAMA technical standards subcommittee, and we now have an agreement on the standard data set for the DEX interface," the Validata founder explained. The existence of a well-defined standard will make it possible to certify hardware and software. "When you buy a vender, or when you buy software, you'll know that the two will work together," he said. "Our goal is to give you information that you can use every day."

MSA's Kirchner noted that "The idea is to provide you with standardized information." To this end, it's important that everyone who sells a particular kind of product refer to that product in the same way, so comparative analysis of performance is possible. "So we're surveying the manufacturers of consumer products; the next step will be to go to product distributors, and to operators too," she explained.

MSA knows how to do this, and has done it with other industries; for example, it has worked with the National Confectioners Association on a similar project. "We keep the information from individual manufacturers strictly confidential," Kirchner emphasized. This has built confidence, and the task ahead, though a large one, should prove fairly straightforward.

Dr. Kasavana invited questions from the audience. The first involved methods of data collection other than handheld computers receiving data uploads from vending machines. "Do you envision remote data collection playing a role?" an audience member asked.

"Yes," Roughneen replied. "And this trade show will give you a good idea of what can be done remotely."

Another operator wanted to know how soon the vending implementation of DEX will truly be uniform, providing all the data in exactly the same way.


Phillips replied that the DEX standard was adopted in 1988, and it is well-established and stable. "It originated in the grocery channel for direct store distribution reporting, more than two decades ago," he said. "But the vending implementation needs work, and it's been a chicken-and-egg situation so far. If there's no standard, no one will use the system; but if no one uses the system, there will be no standard.

"But now you're using it," he pointed out. "Nothing ever gets perfected until it's used. Now we can make real progress, adding new features and new attributes, and extending the standard in ways useful to operators. Now that you're using it, we can make it uniform."

NAMA senior director of technical services Larry M. Eils added that DEX is part of the Vending Industry Data Transfer Standard, which the European Vending Association also maintains. "We're meeting with them, and we plan to have the revised DEX standard implemented by the manufacturers on their controller boards by 2002," he reported. That, in turn, will make it possible to develop fully compliant software.

"Will this new DEX standard work with older machines?" another audience member inquired.

"If the machine is collecting the data now, software is available today that will allow you to retrieve it," Phillips replied. "The hard part already has been done. What we're trying to do now is make sure that we don't encounter any new 'hard part!'"

If a machine cannot collect data, it can be retrofitted with a device (or "box") that will enable it to do so, the Validata president continued. "The technology is here, today, and you can get started right now," he emphasized. "Don't wait until 2002."

Roughneen endorsed this recommendation. "Start by taking inventory," he advised. "How many of your machines have DEX already resident? How many do you have to retrofit? Determine what you need to do, and then start doing it."