"Too much change in too short a period of time" is how sociologist Alvin Toffler defined “Future Shock” in his 1970 book bearing that title. It’s a loaded concept, but it accurately describes the state of our industry today.
We already had more than our hands full of seemingly insurmountable challenges when the economy went into a tailspin brought on by the mortgage crisis earlier this year. The country’s economic stability has been shaken, and everyone, from big organizations to the average individual, is shaking with it.
Consumers ‘trade down’
The media have reported consumers are “trading down” like they usually do during a recession. Economists say it now affects the broadest array of goods since the recession of the early 1980s.
The winners thus far have been membership warehouse clubs, which have witnessed their strongest gains in years as consumers seek to economize on all sorts of necessities. Discount coupons have also made a big comeback.
For our industry, it means reconsidering strategy.
For the last several years, operators have struggled hard to raise prices. And to their credit, they have made progress. The State of the Vending Industry Report, beginning on page 14, notes that more than 80 percent of operators raised prices in 2007, and the National Automatic Merchandising Association’s Operating Ratio Report indicated operators improved return on assets in 2007.
But by now, that’s history. The choices today are even more difficult than they were six months ago. Customers have become more bargain conscious, and their spending habits are changing.
Vending, with its limited real estate, faces especially difficult choices. With consumers more price conscious, how does the vending operator sell on the basis of product and service quality?
Expectations give opportunities
Newspapers have reported that “even vending prices are rising,” as if that serves as ultimate proof of food inflation.
The public perception of vending won’t make radical changes any time soon. But this being the case, operators can use it to their advantage and at the same time make an argument for value based on benefits beyond price.
It requires doing some research, having your facts in order, and communicating.
While operators must raise prices, they still offer a superior value compared to other food and refreshment retailers. By offering consumers the option of taking meals at work, vending allows them to save money and still have a quality meal.
Use facts and Present your case
Make a chart comparing the cost of a sandwich, beverage and snack from the fast food restaurant, casual restaurant, convenience store and supermarket takeout, add the cost of fuel, and compare this to the cost of the same products in the vending machine. Show the savings by day, week, month and year.
Don’t forget quality. Point out the brands, the variety, and the nutritional options in the machines.
The goal is to educate the customer about the value of what you provide. Price has become a bigger part of value in today’s economy, but it is still only one aspect of it.
It is easy to become distracted by the immensity of the challenge facing us today. By breaking it into pieces, it is easier to chart a course of action.