(Editor's Note: Following is an expanded version of a feature article that ran in the May 2011 edition of Automatic Merchandiser Magazine. The article below ran in Automatic Merchandiser up until the subhead, "Product Recognition Solutions: Vending Operator Perspective.")
For years vending operators have struggled to find a more exacting method to coordinate products in a machine with reported sales data. The ability to link DEX data to sales information is often based on a pre-determined planogram or product map; both of which rely on products being placed in a vending machine with strict adherence to the scheme. Unfortunately, to date there has been no easy way to prove that strategic product placements were completed as planned, thereby complicating marketing, rebate, and sales analyses.
Similarly, product manufacturers striving to gain strategic advantage may encourage or influence vending operators through incentive programs oriented toward shelf placement and/or number of facings. While operators wrestle with menu mix, manufacturers tend to seek commitments dictating the number of product spirals dedicated to their products among various rows and columns. Like adherence to a product map, assuring manufacturers that such agreements are strictly followed can be highly challenging.
Vending operators tend to price products on the same shelf at identical prices thereby minimizing operator anguish. But the opportunity to present a broader array of items, with differing prices, is becoming more appealing as consumers and operators recognize premium products often carry correspondingly higher prices.
The problem with traditional vending is that selling prices need to be determined and posted or displayed in static locations beneath the product facing. An error in product placement or a mixture of dissimilar products in a single column can result in diminished contribution margin and/or lost sales; especially when the product is incorrectly priced.
Consumers have a bad perception when products are over-priced and conversely operators are negatively impacted when products are sold under-priced. A solution to this problem would be the ability to set a price for each product and to have that price displayed and available when the product is in the front spiral position (next available for sale).
The need to display nutritional, and often ingredient, data is becoming of significant importance to the vending industry. Given that legislation intended to assist the consumer in making an informed product choice will soon be mandated, vending operators will not only need to know the exact identification of a product in each facing, but will also need a way to display its nutritional content.
A consumer interested in purchasing a breakfast pastry, for example, may use the machine capabilities to review the item's nutritional data. But if the response to the query leads to the machine displaying the nutritional panel for a salty snack, much confusion may ensue.
Is the actual item presented for sale the one linked to the nutrient file? It appears likely that inaccuracy in matching product to nutrient description may have unintended sales consequences. Knowing which product appears where in the machine at any point in time can be critical to operational success.
The above concerns, as well as other issues, are addressed and resolved through product recognition (PR) technology developed by Vendors Exchange International, Inc. This innovative high-tech solution is designed to specifically determine the content of each spiral in real time, reference its price, and provide the opportunity to link to nutritional and key ingredient data.