Merchandising technologies elevate vending

Technology provides new ways for vending machines to give shoppers a more rewarding experience. While many of the newer technologies remain elusive to the average consumer, more vending machines are offering touchscreens, video screens, coupon dispensers, cashless readers, and even biometric scanners.

These technologies allow vending machines to provide more information to answer shoppers’ questions and, at the same time, speed up transactions and provide a more sensory intensive buying experience.

Some observers believe the calorie disclosure requirements in the new federal health care reform bill will help build interest in point-of-sale technology since some of the technologies will allow vending operators to meet the disclosure requirements.

The point-of-sale technologies that have been introduced in recent years bring benefits to operators, location managers, consumers and even product manufacturers.

“We’re encouraged to see such proactive measures being taken to bring vending into today’s technology centered environment,” said Joshua McCutcheon, associate manager at PepsiCo Americas Beverages, in response to Sprout, one of the technologies that will be covered in this article.

Several video screens have been demonstrated at industry trade shows in recent years. Some of the video screens work in combination with other technologies, such as coupon dispensers and remote machine monitoring.

Video screens allow a vending machine to provide information about products, visual images of products, promotional offers, as well as news and weather reports.

These point-of-sale merchandising technologies are emerging in tandem with remote machine monitoring (RMM) and cashless transaction capabilities. In most cases, the machine, in order to host a video screen and/or a coupon dispenser, also has RMM and cashless capability.

This article will review the progress of some of the key point-of-sale merchandising technologies that have been introduced in recent years.

QUICKSTORE24 OFFERS A HOST OF FEATURES

Quickstore24™, introduced in 2004, consists of a glassfront beverage machine and glassfront snack machine connected by a bright green enclosure that features point-of-sale graphics. The divider between the two machines contains the payment modules. Machines offer digital thumbprint payment, interactive video touchscreens that include advertising, and promotional coupons printed at the point of sale — all in addition to cashless readers and RMM.

Quickstore24™ uses an unconventional vending business model. Instead of selling machines and software to operators, the company provides a complete package to operators in exchange for a fixed percentage of sales. The company is also active in soliciting accounts.

Several operators who placed Quickstore24™ in the New England market have discontinued the system. One operator noted that he was unable to make a profit with the system’s vend pricing.

Sanese Services Inc. in Columbus, Ohio has 15 Quickstore24™s, noted Jeff Sanese, the company’s director of OCS. He said some of the promotional offers do bring extra value to the consumer. He said the system has also helped the company win some accounts.

Sanese said Quickstore24™ has not been greatly profitable. “It’s still in its infancy stage,” he said.

SPIO MEDIA NETWORK: COUPON DISPENSER, VIDEO SCREEN

The SPIO system, introduced in early 2008, consists of a coupon dispenser that is installed in the vending machine and offers a coupon that the consumer can redeem at a retail store. The system has recently added a Sony video touchscreen to complement or replace the printed offer.

SPIO provides the hardware at no cost to the operator. It also provides coupons, plastic or paper, in clips that are placed in the machine to be dispensed. There are an estimated 1,000 SPIO devices in the field currently.

SPIO has run coupon promotions for close to 30 consumer product manufacturers, according to Dobbin Prezzano, president and founder.

Dennis Thornton, a partner in Advanced Vending LLC in Ringgold, Ga., operates about 600 SPIO devices and has carried numerous offers for several restaurants as well as for Coke. He said an offer for a free Coke Zero was the most successful, which he credits to the product’s popularity.

“We did see a really good lift in sales once we had some good programs running,” said Scott Plaisted, customer service manager at Southern Refreshment Services in Tucker, Ga., another SPIO partner with hundreds of coupon dispensers. He said the recent promotions have lifted same store sales by at least 20 percent.

The SPIO video screens also allow customers to use digital coupons. The video screen displays the coupon number that the consumer can then text to the merchant.

Prezzano said the future rests more with the video screen than the print coupon. “Consumers visit machines with digital screens on them at a higher rate than just pure print,” he said.

Prezzano said the vending machine’s unique ability to reach consumers where they work will draw more attention to vending when SPIO and similar products become more prevalent. He also said the new calorie disclosure law will build demand for the digital screens since the screens allow the operator to display information at the point of sale.

SPROUT INITIATIVE ADDS A PROPRIETARY CARD

Sprout is a strategic partnership designed to use technology to improve operational efficiency and develop interactive consumer programs for unattended retail locations.

The Vend Marketing Institute (VMI), a coalition of 17 independent vending operators, has deployed about 18,000 RMM and cashless installations across its network of machines and hopes to triple that number. Cantaloupe Systems is supporting these deployments with its Seed® services platform, including the company’s new Seed® cashless service.

Jim English, CEO of Sprout, said VMI members will offer Sprout card promotions to customers. Customers will be able to load value on their Sprout cards over the Internet with a credit card, checking account or through payroll deduction.

Imperial Companies, based in Tulsa, Okla., has 1,000 Sprout cards it plans to provide customers. The company has found it a great selling tool, noted Paul Tims, company president. Tims’ company offers to donate 1.5 percent of the Sprout card sales to a charity of the customer’s choice.

Tims likes the fact that the Sprout card is an operator sponsored promotion.

For Tims, the ability to use technology to improve merchandising was an added benefit of the Cantaloupe Seed® system. He invested in RMM initially in order to pre-kit his routes. By year’s end, he will have RMM on all his snack and soda machines and his higher volume food machines.

Refreshment Solutions LLC in Norco, La., another VMI partner, plans to offer 25 cents off on Coke Zero using the Sprout card, noted Marc Whitener, company president. He expects to have as many as 9,000 machines networked this summer.

Whitener said the Sprout program will allow consumer product manufacturers to measure results better and will therefore allow them to better target promotional offers. “The suppliers are very excited about this,” Whitener said.

Whitener, a former convenience store operator, noted that convenience stores have been using these types of consumer product promotions for many years, and that such promotions play a major role in driving convenience store sales.

Barton Shaw, co-owner of Atlanta Vending in Atlanta, Ga., another VMI partner, said the Sprout card will help him get prices beyond the dollar price point. “We feel like a stored value card is the best answer for a vending transaction,” he said. “The whole ease of payment is what we think will be a game changer in the future.”

FAST TRACK CONVENIENCE OFFERS SELF CHECKOUT

The Fast Track Convenience consists of a self checkout station where products are scanned by an RFID reader. It was introduced in 2005 and has gained a small following in the Midwest, Connecticut, South Carolina and Georgia.

The self checkout system allows an operator to offer far more variety than a traditional vending bank, and it has found a home in some large locations.

There are currently about 35 Fast Track Convenience stations operated by seven operators in the Midwest, Connecticut, South Carolina and Georgia.

Ray Friedrich, a Detroit, Mich. area vending operator who has been marketing the Fast Track Convenience system to vending operators, recently developed a foodservice application for the system that allows an operator to offer more product variety with less labor than a traditional food line. The cafeterias equipped with the self checkout station offer foodservice products priced at $5 and $6.

Customers can order their meals from an attendant, then pay at the self checkout kiosk. Because of the improved inventory control, the location can offer as many as 600 different items, far more than traditional cafeterias.

Friedrich said he has been able to install three of these systems without requiring a subsidy from the location.

He said the system generates $53 per labor hour with two full-time employees.

“It gives us the ability to increase the customer satisfaction and drive volume,” said Joe Hessling, president of foodservice at Sterling Services, the parent company of Fast Track Convenience. “The RFID is what allows us to do that. The product offering is what grabs the customer.”

MB MEDIA OFFERS AN LED TEXT SCREEN

MB Media is a Phoenix, Ariz.-based company that produces a wireless text messaging system for vending machines. The company retrofits existing vending machines with digital screens that run text messages of stock reports, public service announcements and world news stories, which are updated daily. These news feeds contain no advertising.

The main LED screen is about 26 inches wide, 3.9 inches deep and 1.8 inches thick. It fits just across the bottom of a 5-column snack machine and is attached using Velcro. There is also a smaller version of the sign which is 20 inches wide with the same height and depth.

Dave Levine, company president, said the system has been used by vending operators as a selling tool. He said he has operator customers in about eight states.

“It’s another bell and whistle to sell to the customer,” said Todd Elliott, president of Tucson, Ariz.-based Tomdra Vending, who has a handful of MB Media’s LED screens on his machines. He said the screens run news and can also deliver a customized message.

DIJI TOUCH BEGINS FIELD TESTS

The Diji Touch machine — a partnership between Crane Merchandising Systems, Kraft Vending & OCS and Samsung, was introduced at last year’s national expo and is being tested by Canton, Mass.-based Next Generation Vending and Foodservice, Inc. in the Boston metropolitan area, beginning this month.

The test locations will be college and university settings, health care locations, transportation centers and other high traffic locations. The test will measure consumer interaction with the machine relative to both purchasing snack products and the delivery of video advertising and promotions. 

The test will measure sales volume, consumer interaction and acceptance, and its potential to deliver video advertising over a 6-month period.

Sales volume will be measured by product and by machine using Crane Streamware management software. Sales volume will be tracked weekly and will be compared to prior year performance.

In addition, when the Diji-Touch machine is in a bank of vending machines, sales volume will be measured for all machines to determine if the Diji-Touch machine can drive higher sales for the entire bank of machines.

Consumer interaction and acceptance will be measured in two studies conducted by Digitas LLC and Nielsen Strategic Media Research Service, respectively.

Digitas LLC will implement data mining and analysis on 20 Diji-Touch machines to capture interaction time, drop-off rates and more for the various screens in the consumer user interface.

Nielsen will conduct 375 interviews at 15 locations to better understand who, demographically, is using the machine. The combined objective is to determine how consumers use the machine, their acceptance of the machine, and if necessary, what issues might inhibit even higher usage and acceptance rates.

The potential to deliver video advertising will be measured in a study conducted by Nielsen Strategic Media Research Service. In addition to the 375 interviews conducted at 15 locations, continuous audience measurement for Diji Touch will be delivered by an electronic measurement device called TruMedia.

COKE PLACES INTERACTIVE VENDER

Coca-Cola North America has placed 150 of its interactive vending machines in tests around the country at select Simon Malls locations. All of these machines are serviced by Coke bottlers.

The company is reviewing the results from the current placements and evaluating its execution strategy, according to Jeff Busch, director of on-premise innovation and operations.

VEII MIND ADDRESSES NUTRITION DISCLOSURE RULES

Vendors Exchange International Inc. has named its retrofit video touchscreen the MIND (Make Informed Nutritional Decision) because the company views nutrition disclosure as the key driver for the device in the near term. Brent Garson, president, claims the long-term uses for this technology will include more strategic point-of-sale pricing, paid video advertising and other benefits. But for the time being, he claims that most of the 200 MIND screens that have been installed to date are being used to provide nutrition information.

Garson believes the new calorie disclosure rule will raise awareness of both the power of video screens and Web-based data management tools in vending. “It’ll be site (location) driven and operator driven,” he said.

VEII’s MIND requires a 10-minute installation at the machine. The operator can download the nutritional information from a Website onto an SD card and place the card in the retrofit MIND device.

When used in combination with VEII’s universal control board, the digital video touchscreen becomes an even more powerful merchandising and management tool, Garson explained.

Besides displaying nutrition information, the video screen, in tandem with the control board, will allow the operator to display pricing information at the point of sale and allow the operator to change pricing in the machine from a remote location. Because the control board will enable the operator to monitor information such as pricing and profits more easily, he will be able to discount prices at an opportune time, thereby maximizing sales and profits.

The data can be sent to the control board via a cellular signal if the machine has a cellular modem.

Garson is also among those who believe video screens will bring paid advertising to vending machines.

He believes this due to the ability of item level tracking to verify sales in the machine. The item level tracking, in combination with a video advertisement on the machine, will quantify the number of sales that occurred when an ad was displayed on the machine. Garson claims this has already been proven.

New point-of-sale merchandising technologies utilizing new hardware and data management software promise to make the vending channel more relevant to consumers and hence, the food industry.

For more information, contact:

Coca-Cola Co., 800-438-2653, www.thecoca-colacompany.com
Crane Merchandising Systems, 800-325-8811, www.cranems.com
Fast Track Convenience, 419-764-3213, www.ftconv.com
Kraft Vending & OCS, 800-537-9338, www,kraftvendingocs.com
MB Media, 480-332-0844, www.mbmediabrokers.com
Quickstore24, 877-893-8903, wwww.quickstore24.com
Sprout, 908-927-1001, www.sproutretail.com
Vendors Exchange International Inc., 800-321-2311, www.veii.com

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