Many vending operators recognize that new equipment and software will allow them to operate more efficiently, but the newness of these tools, coupled with the investment required, can be intimidating. This is why technology suppliers such as Crane Streamware are developing operating models to help operators incorporate new tools.
Bill Lockett, national accounts manager at Crane Streamware, recently offered an overview of the new technologies and a plan to allow operators to invest in them. The purpose of the presentation was to simplify the steps that can oftentimes seem too cumbersome. Lockett presented a talk titled "The Emerging Vending Model" at the Texas Merchandise Vending Association annual meeting held recently at the San Antonio Marriott in San Antonio, Texas.
Lockett began his presentation by picking up on a theme from the speaker who preceded him, which is to use technology to "get in front of the customer and talk about something besides commission and price, and at the same time also improve profit." Lockett followed a presentation by Elliot Maras, editor of Automatic Merchandiser, who spoke on "Wake Up Vending."
Lockett noted that his company reviewed equipment purchases of operator customers and learned that those operators who invested the least in technology purchased 26 percent less equipment than other operators. This insight reinforced Crane Streamware's belief that technology holds an important role in the vending industry's future.
Traditional route service model has inefficiencies
Lockett noted that technology tools are those that enable operators to perform the most basic customer service tasks more efficiently: servicing locations. He said the traditional route servicing model is highly inefficient for the following reasons:
- Machines are serviced on a fixed schedule.
- The typical route returns an average $6,500 per week, according to the National Automatic Merchandising Association's operating ratio report.
- The average route covers 18 to 25 machines per day.
- The average route vehicle travels 85 to 100 miles a day.
- The vending product warehouse is organized by product categories.
Lockett said DEX (Digital EXchange) technology allows the operator to arrange machine fill orders based on individual machine needs. "That's the area where we have the greatest opportunity to change the (route service) model," he said.
He noted that under the traditional model, route drivers must return to the truck to retrieve the products needed to fill the machines and then make a second trip to the machines. Under the emerging model, he said these additional tasks can be eliminated.
Crane Streamware has also revealed the following insights about route servicing, according to Lockett:
- One in five machines serviced could have waited for the next service visit.
- An annual salary of $35,000 for a driver who works a 10-hour day translates into an hourly wage of slightly more than $14 an hour, which in turn causes high driver turnover. "Our drivers are working hard," Lockett said. "They end up doing something else."
"This is the (service) model that we're dealing with today," Lockett surmised.
Under the emerging model that utilizes DEX technology, Lockett said all individual products are bar coded and scanned in and out of the warehouse.
The DEX data that is retrieved by DEX handhelds allows the operator to determine what product mix will provide the location with the fastest selling products.
In other words, DEX allows for the design of machine planograms that ensure the top selling items are placed in each machine.
Important benefit: Electronic cash audit
Another major benefit that DEX provides is electronic cash audit, which Lockett said allows operators to know exactly how much cash should be collected, based on the machines' DEX readings.