Jim Dillingham of Vend-ucation wants to see more blood from outside the traditional vending industry.
Twin Cities vendor Steve Marx thinks communication and marketing skills will be key skills.
Marc Whitener, a Norco, La. vendor, thinks financial skills are becoming more important in vending.
Glenn Butler, CTO Services LLC, says self checkout markets have more data to manage than vending.
Tom Whennen of The Entrepreneur's Source sees operators becoming more "customer centric."
With vending becoming more professional thanks to the adoption of cashless transaction capability, wireless remote machine monitoring and other tools, the next generation of vending operators will likely have a different skill set than their predecessors. For operators to succeed in a market where more technology investment and training are needed, where will the next generation of operators come from? What types of education and career background will harvest the next generation of vending industry leaders?
The question was recently put to a randomly selected group of vending industry veterans. Most are optimistic that today’s new tools are improving the public’s image of their industry, a trend they expect will continue.
Operators agree that technology will play a bigger role. Because of this, they need the financial skills to manage their capital, communication skills to educate employees and customers about the technology, and marketing skills to survive and prosper in a more competitive market.
Operators generally believe that future vending leaders will have more financial expertise, stronger marketing backgrounds and keener communication skills than previous generations.
Operators also agreed there is no single type of education or career background that will dominate the next generation of leading operators. In this regard, the operators of the future will mimic their predecessors, having varied business and education backgrounds.
The key characteristics for future leadership in some ways are similar to those of previous generations: good business sense, the ability to delegate responsibilities, knowing how to identify good talent, being willing to reward employees fairly, and a commitment to high quality service.
While many of these characteristics remain constant, operators also agree that the need to understand new technology is one of the biggest differences that future vending leaders will possess. New technology, in turn, creates the need for stronger financial acumen since the technology adds more cost to operating the business.
Rome Refreshments in Houston, Texas is a 33-year-old company that utilizes DEX handhelds and is investigating self checkout micro markets. Dominic Macerola, founder, hopes to pass the business to his 28-year-old son, G.P. Macerola, who is a lawyer by training. Dominic Macerola said operators must understand how to use new tools such as card readers and know when it makes sense to invest in them. “They (customers) want us to put it in the vending machines,” he said. “If you don’t know that (the use of the new tools), you’re going to be out of the game.”
Marc Whitener, owner of Refreshment Solutions in Norco, La., has been proactive in introducing wireless pre-kitting. The company has also witnessed strong growth in recent years. Asked what he would do today as a newcomer, Whitener said he would find ways to build a stronger financial structure, one that would allow him to invest more in technology, acquisitions and salaries. All three of these areas, he noted, are interrelated.
Financial skills critical
With technology playing a bigger role, Whitener said it’s necessary to not only have the funds to pay for it, but to have people who are trained in how to use it. He said a formal financial education would be helpful to him today. Whitener studied economics in college, which he noted is not the same as finance. Vending operators need to do more than manage day-to-day expenses, he noted; they need to be capitalized for long-term growth.
Steve Marx, another veteran operator who has invested in technology in recent years, echoes Whitener’s concerns about being financially educated in order to deploy technology successfully. Marx, who owns Royal Vending in Maple Grove, Minn., has invested in cashless readers, DEXing his machines and in automated warehouse tools to allow him to pre-kit his routes. “You’ve got to know when and where to spend your money,” Marx said.
To these traits, Marx adds the importance of good communication and marketing skills. He thinks the vending industry continues to suffer from poor skills in these areas.
Communication is an area that several veterans cited as important, both in relation to the customer and the staff. “You have to take time to invest in seeing the client and building a relationship with them,” said Tony Goodman, president of Goodman Vending Service in Reading, Pa. To this end, his company has become proactive with social media in addition to its print newsletter.
Goodman said a well rounded education is more important than a focus on any one area of business.
Employee assessment to be key
Greg Breland, president of Ocean Springs, Miss.-based Gulf Coast Canteen, said the demands required by automated management systems require managers to be more adept at identifying critical employee skills. While data management is highly automated using today’s software, the data input requires attention to detail. A longtime operator, Breland said it is very hard to pre-qualify an employee’s awareness of the importance of detail.
Breland seconds those who noted the importance of motivating employees. “If you can’t get your people to buy in, you’re doomed,” he said.
Another important trait, according to Breland, is self assessment. Most vending owner/managers are strong in some areas and weak in others. A successful leader recognizes his or her strengths and weaknesses and delegates accordingly. “You can hire someone where you’re not good,” he said.
Some observers are hopeful that today’s exciting technology will bring people from outside the industry with better marketing and management skills.
“We need people from outside the industry,” said Jim Dillingham, who operates Dunbarton, N.H.-based Vend-ucation, which educates schools about vending. He is a longtime vending operator and equipment distributor. “The same old mentality is the problem. Inside the industry, we just have too many assumptions that are no longer accurate,” he said
Dillingham maintains the industry is rife with bad business practices, such as offering customers high commissions, dishonest sales reporting, and promising unrealistic benefits without delivering on the promises. He agrees with those who say financial and technology backgrounds will be important for future operators.
Dillingham said future leaders will have longer return on investment schedules due to the higher investment required for state-of-the-art equipment and technology. He said unique technology affords a window of opportunity for negotiating realistic and profitable vend prices. New technology can place a vending proposal outside the framework of a perceived commodity, he noted.
Tom Whennen, a former vending operator who now operates a business consultancy called The Entrepreneur’s Source in Oak Park, Ill., said future vending operators will be more focused on the bigger picture.
He said vending companies will be more “customer centric,” meaning by using technology they will create a more positive consumer experience at the point of sale and post sale. He said people with college business backgrounds are more likely to understand this concept than those without it.
One thing that everyone agreed on is that a strong work ethic remains important. New tools are creating new capabilities, but there is more training needed and supervision remains as important as ever.
Paul Tims, owner of Imperial Companies in Tulsa, Okla., thinks technology raises the bar, and in doing so, requires stronger marketing and communications skills. His company is proactive with many vending technologies. Tims is adamant that it is easier to find people with strong technology backgrounds than with good marketing skills.
The need to educate customers about health and wellness issues has brought even new demands to the game, Tims noted. “It takes a smooth, more clearly capable person to communicate all the health and wellness (information),” he said.
Self checkout markets enter the fray
Tims is also among those operators who think self checkout micro markets require an even stronger marketing skill set. His company recently hired someone to market the self checkout systems.
Five Star Food Service Inc., based in Chattanooga, Tenn., recently hired a vice president of micro markets, with a convenience store chain operations management background, for its self checkout micro markets line of business. Alan Recher, company president and a 28-year vending industry veteran, believes the markets require a type of merchandising more similar to convenience stores and retail than the merchandising of traditional vending.
Recher said the products sold in the markets are of various sizes and higher quality while offering a better value to customers, and must be merchandised differently. He did not wish to be specific. Recher added that his company has hired a dedicated marketing manager for self checkout markets for each of its major market regions, all of which brought with them retail merchandising experience.
Glenn Butler, who operates CTO Services LLC, a Boston, Mass.-based consultant, agreed that the self checkout markets involve more data to manage than vending machines, and the data must be managed efficiently. He said operators will not need additional skills for managing these systems provided they are able to integrate the self checkout markets’ reporting with their vending management software.
Allen Weintraub, who operates Vending Consultants Co. based in White Plains, N.Y., said a lot more attention to detail is needed with self checkout markets. He said it’s easier for products to be displayed sloppily on shelves and in coolers than in vending machines. “It’s more complex,” he said. “You have to have someone who analyzes the data to maximize sales and change the products.”
Not everyone agrees with this. John Mitchell, president of Treat America Food Service, which provides self checkout markets to its customers, has used vending employees to both sell and service the markets.
Operators agree that as technology is adopted, many existing job roles will change. These changes affect nearly every standard position.
“We would be well served to dedicate more resources to data analysis than we have in the past as an industry,” said Mitchell.
Dave Griesedeck, a longtime St. Louis, Mo.-based operator, welcomes the new technology and has DEXed his machines and is using cashless card readers. He thinks the most important skills will not change. The employees must be trained on the job and drivers must be able to work unsupervised and represent the company professionally.
Griesedeck agrees that financial and business skills will always be important. Hence, a business and financial education will give someone a good foundation for vending.
Leaders must be more versatile
The role of the leader will be to understand all the roles as they change, in addition to understanding the capabilities of new technology, staffing in a way that allows the company to use the tools effectively, and rewarding employees according to new areas of responsibility.
The vending operators of the future will need a solid foundation in finance, marketing and communication skills in addition to a good overview of evolving technology.