Vending Takes New Role in Marketing Promotions

Technology is giving vending machines new promotional capabilities. As a result, consumer product marketers are beginning to see vending machines as tools to do more than market products for immediate consumption. They are beginning to see vending as an avenue to encourage consumers to buy a wide range of items, including financial services, TV services, vacation packages, and more.

In the past few years, technology players have developed touchscreen video screens and coupon dispensers that can be retrofitted to existing vending machines. These devices, on vending machines, enable consumer product marketers to reach consumers in school, at the work place or in transportation and at entertainment hubs.

The ability to target a message to a consumer in the at-work environment in particular has raised eyes in the marketing community.

In January, Automatic Merchandiser reported on the Quickstore24™, a vending machine that has interactive video touchscreens, multiple payment options, and on-site dispensers that give redeemable coupons. This system was developed by a Walker Digital, LLC, a company that focuses on finding solutions using modern information technologies.

In February, Automatic Merchandiser reported on another technology solution, the SPIO system, that utilizes coupon dispensers and interactive video touchscreens to give vending machines new capabilities as marketing vehicles for consumer product manufacturers.

The SPIO system consists of a coupon dispenser that is installed in the vending machine. When a vend is made, a promotion is dispensed simultaneously. It can be an offer to receive a free item from a restaurant or $5 off a $25 purchase at a retail store.

SPIO provides the dispenser at no cost to the participating vending operator. SPIO provides the operator with coupons, either plastic or paper, in clips that are placed in the machine to be dispensed. The only cost assumed by the vending operator is the labor for installing the dispenser.

INNOVATIONS OFFER OPPORTUNITY FOR VENDING

All of these innovations are happening at an opportune time for the vending industry, since traditional vending has become increasingly unprofitable due to a shrinking customer base and rising costs and more competition from other retail channels.

Innovations such as Quickstore24™ and SPIO could give the vending industry the tools it needs to bring a higher level of value to the consumer. Preliminary indications are that this is beginning to happen.

SPIO recently completed a successful test with a Chick-Fil-A restaurant in Oglethorpe, Ga. Promotional offers were distributed through vending machines within a 10-mile radius of the store. Consumers redeemed the offer for a free food item. The redemption rate was around 20 percent, which is 10 times greater than most traditional coupon promotions.

Chick-Fil-A isn’t the only consumer product marketer to see merit in the vending promotion. SPIO has recently signed similar arrangements with Direct TV and Blockbuster.

SPIO ENHANCES CUSTOMER EXPERIENCE

“It’s a pretty effective way to put your ad right in the hands of the consumer,” said Chuck Treister, executive vice president of vend partners for SPIO. In addition to lifting sales for the vending operator, the coupon enhances the experience for the customer and the location. “It’s what it does from a standpoint of customer relations,” Treister said.

Treister, who has worked in vending operations and equipment manufacturing, said coupon redemptions are not a new idea in vending. However, earlier programs required some labor on the part of the vending operator.

“A lot of (product) manufacturers have dabbled in this concept,” said Dennis Thornton, a partner in Advanced Vending LLC, the Ringgold, Ga. who participated in the Chick-Fil-A promotion. What’s unique about SPIO is that the operator doesn’t have to do anything extra and the marketing offer is very well targeted to the end user, resulting in a win for every party involved.