He updated the employee handbook to include instructions on using handhelds. “Not only do they (route drivers) have to fill machines, they have to fill to our standards,” Foley said.
DEX-based line item reporting set the foundation for utilizing some of the new merchandising concepts the company introduced.
Evolving with technology
In 2005, Foley Food & Vending became one of the first operations in the country to embrace the Quickstore24 machine, an Internet connected machine with a video touchscreen that prints coupons and accepts thumb print payment in addition to other types of payment.
The Quickstore24 did not prove to be a big success (see sidebar on this page), but it familiarized Foley with the benefits of remote machine monitoring. Because Quickstore24 does not require the vending operator to buy the machine, Foley has been able to operate several of these machines with minimal investment.
In 2007, with all routes reporting item-level sales, the company began pre-kitting routes in the warehouse. This came at a fortuitous time. Pre-kitting allowed the company to reduce its inventory and delivery costs.
When the recession hit in 2008, the company was operating more efficiently due to pre-kitting.
Line item sales reports did not prove as useful a selling tool as he might have hoped, Foley noted. He said only the more sophisticated customers take the time to look at these reports.
Pre-kitting did, however, help enable Foley to expand into self checkout markets. This has proven a major success for the company this past year.
The self checkout market allows an operator to sell a large variety of products in open racks, coolers, freezers and bins. Filling the containers is much faster and easier than stocking vending machines, there is no cash float tied up as there is in vending machines, and there are almost none of the mechanical issues associated with vending.
“Customers like it,” Foley said of self checkout markets. “Once they have it, they love it.”
All 11 of Foley’s self checkout markets have been installed in new locations, making it hard to compare sales to a traditional vending bank.
He said his average self checkout market does between $30,000 to $35,000 per year in sales.
Self checkout: The new convenience
In a self checkout market, the customer picks products from open racks, coolers, freezers and bins, then scans the UPC bar code for each product at a kiosk. They then pay with a single payment, using cash, a credit card or stored value pay card. The customer can add value to the stored value pay card with credit or cash. The kiosk alerts the customer when the stored value pay card needs to be replenished.
The front of the payment kiosk has a video touchscreen that prompts the customer through the purchase process. The video touchscreens also run programmed ads for some of the product suppliers.
Surveillance cameras are installed at the location and monitored at Foley’s headquarters.
The upfront cost for an Avanti Markets market, the self checkout market Foley uses, is comparable to a traditional vending bank.
The touchscreen on the payment kiosk has proven to be a great promotional tool. Foley offers its own sweepstake promotions, giving customers a chance to win market credit.
Customers can also win market credit for referring another customer.
Foley is currently offering customers a 5 percent cash back if they add value to their stored value card with cash versus credit. Cash revalue allows Foley to escape the credit card company fees.
Most of the products in the market do not have price tags. A customer can check a price at the payment kiosk before buying.
For items without UPC codes, such as fruit, the touchscreen prompts the customer through a non-scan purchase.
More price flexibility
One benefit of the self checkout market is that unlike a traditional vending machine, the operator is not limited to certain price increments.
Foley warehouses a total of about 920 stock keeping units (SKUs) for his 11 self checkout markets. A typical market offers around 400 SKUs. Products include large bags of snacks, submarine sandwiches, TV dinners, fresh fruit, boxed candies, boxes of K-Cups, utensil packs, single-use laundry detergent packs, and seasonal items.