Technology Brings Payment Options to OCS

The recession has forced businesses in all industries to cut costs. The customers of all service industries want options for making do with less.

For the OCS industry, the challenge has been to give customers more cost efficient options and still provide the benefit of a good cup of coffee. Many operators welcome new products and equipment that provide more customer choices.

One option that has emerged has been cashless brewers. While not well established, cashless offers a new option that gives locations the chance to pass on some of the cost of OCS to the end user. The technology that allows cashless payment in a vending machine can be incorporated into some coffee brewers.

Providers of cashless transaction capability face resistance in the OCS industry, which is based on providing free coffee. Any payment option defies the very basis of OCS to begin with. This is why most OCS operators resist adding any type of payment mechanisms to brewers.

Some, however, have found that customers want more options. Cashless transaction capability is a new option which in itself can create interest.

The telemetry technology that supports cashless payment also supports other benefits that OCS operators will find useful. One is the ability to monitor machine activity from a remote location. Another is tracking usage to make sure unauthorized product is not used in the machine.

Still another benefit is the opportunity to analyze consumption habits. Cashless transaction technology gives operators the ability to track item-level transactions by location. Hence, the technology can give operators access to more extensive market data.

Operators surveyed about the new technology recently were not enthusiastic about it. Most are not anxious to invest in more expensive equipment, and the inventory management and data tracking benefits are not seen by most as being important.

Once the technology rolls into the market, however, these benefits could gain credibility. This was the case with the single-cup brewer, which OCS operators initially dismissed as too expensive to justify potential benefits.

PAYMENT MECHANISMS NOT COMMON IN COFFEE SERVICE

OCS operators associate payment mechanisms with added costs, increased service calls, the need to count and carry cash, and most significantly of all, decreased consumption.

As noted, taking the OCS brewer off of “free vend” changes the purpose of the OCS service. “It (a payment mechanism) sends a different message,” noted Jack Kirshner, owner of Philadelphia, Pa.-based Coffee Serv Inc. “It’s a radical step.” His views were echoed by numerous OCS operators nationwide of whom the question was asked.

While operators resist adding payment mechanisms to brewers, the need to offer options to customers is pushing more operators in this direction.

Equipment manufacturers note that payment options are increasing as more locations want to pass the cost onto customers.

Bob Hale, who is both an operator (chairman of Mister Coffee Services Inc. in Toronto) and equipment manufacturer (president of Bodecker Brewed) said that despite the disadvantages of coin op, the present economy is causing customers to consider it. “They’re motivated by the economy to cut their overhead,” he said. He said many customers will be more inclined to add coin op to a single-cup system than revert back to bottle brewers. “They still want the cartridge (single-cup system) because they can meet the needs of the people in the office,” he said.

Dave Manly, vice president of marketing at Keurig Inc., said traditionally about 10 percent of the company’s brewers are equipped with vending accessories, but this number has jumped to 14 percent as of late.

Marguerite Deutsch, marketing manager at Mars Drinks North America, said more customers are asking about the coin-op accessory on the Flavia system in the U.S.

Gary Stevens, co-owner of Cuda Coffee LLC, which sells OCS and vending equipment over the Internet, said the requests for brewers equipped with payment mechanisms has been increasing. He is currently planning to offer a single-cup brewer that accepts credit cards.