One reason for this is that the number of large locations has declined in recent years. While employment has increased, labor experts claim more people are working for smaller companies. Technology has made it possible for companies to get more done with fewer people.
Rising operating costs have made it harder for operators to make money in accounts with less than 100 people. Larger operators have higher overhead and thus higher minimum revenue requirements.
The State of the Vending Industry Report noted in recent years that extra large operators responded to the decline in large work sites by expanding into smaller locations. This accounted for the decline in market share of large ($5 million to $9.9 million) and medium ($1 million to $4.9 million) and small (under $1 million) operations in 2004, the report claimed.
In 2005, extra large operations were apparently unable to continue their expansion into smaller work sites.
Operators still slow to invest in technology
Operators have yet to take advantage of some new technologies that offer the vending industry significant growth potential. Remote monitoring and curbside polling offer the ability to schedule service at the most opportune time, increasing per-stop collections and improving return on labor.
Cashless card readers offer the ability to improve customer satisfaction, offer higher priced products and improve machine level accountability.
Line-item tracking allows operators the chance to meet customer demands more accurately and better determine the most popular selling products.
While these technologies offer significant potential, the operator base has barely begun to invest in most of them due to the high capital required, the need to integrate new hardware and software with existing management systems, and the lack of proven return on investment (ROI) for many of these products.
The last new technology that made a big difference to the vending industry was the bill validator, which was a much easier technology to accommodate. The industry adopted this within a few years after its introduction in the early 1980s.
Technologies require compatible hardware and software
To introduce remote monitoring and/or curbside polling, operators need to have machines that are DEX capable, as well as hardware and software that supports this feature.
Depending on the route accountability software used, and the extent of the software features/modules used, operators need to be sure remote data collection software is compatible with existing systems.
Operators using spreadsheets or custom-designed systems may find it easier to rely solely on the remote data collection software or in concert with their existing system.
To introduce cashless capability, an operator needs an MDB-capable machine in addition to the card reader.
Survey examines DEX use
To determine how close operators are to adopting these technologies, the survey asked several questions about computer use. The survey found that 35 percent of all operators are currently using DEX to some degree.
Forty one percent said they do not use DEX but intend to use it in the future, as indicated in chart 5f. Thirteen percent said they have no plan to use it while 11 percent were not certain.
Technology suppliers estimated that between 10 to 20 percent of the operators have all of their machines DEX capable. The suppliers estimate that about 60 percent of the machines in the field are DEX capable.
Last year's report noted that larger operators were in a better financial position to invest in technology that could improve operating efficiencies and offer better customer service.
This year's report found that while few operators are utilizing the newer tools, such as remote machine monitoring, curbside polling, DEX handhelds and cashless systems, the assumption that technology benefits the largest players has not proven completely correct.
Large vendors lead move to cashless
Technology suppliers noted that the larger operators are not leading the growth in every area. The only technology where larger operators clearly outpaced smaller ones is in cashless capabilities.
The survey found an increase in the percentage of accounts equipped with credit and debit card readers in 2005, as indicated in chart 5g. Larger operators accounted for most of this activity.