Self checkout markets raise the bar: Key things for operators to consider
The market report shows, starting with the blank fields under the “consumer” heading, the purchases made by credit/debit cards. The micro market operator has a dual incentive to convert these purchases to the stored value account card: 1) to eliminate the credit/debit card fees, and 2) to identify specific promotions to these consumers.
Finally, the micro market operator should work with the product manufacturers to coordinate micro market promotions with the product manufacturers’ national and regional advertising and promotions.
For example, Coca-Cola and Kraft had a joint Super Bowl promotion advertised in the New York metropolitan area. New York area micro market operators could have taken advantage of this advertising to convert non-users to consumers. These product manufacturers’ programs and advertising are calendared for at least six to nine months. Micro market operators should know these programs, have the ability to implement them to attract new consumers, and analyze the effectiveness.
The ability to analyze the impact of the product manufacturer’s programs on individual consumers places the micro market operator in the forefront of the second decade of the 21st century. If the micro market operator cannot analyze sales by consumer and stock keeping unit (SKU), micro markets will just be a stagnant, back-water retail channel compared to the dynamic developments in other retail channels.
Micro market operators need support in analyzing this data. But given the current contracts with micro market companies, the question arises: who owns the data? Microtronic US and Breakroom Provisions agree that the data is the property of the micro market operator.
In its contract, Microtronic US states that “Client (micro market operator) shall own exclusive rights (including all intellectual property rights) to any information hosted by the database pertaining to client’s account only, and shall be entitled to the unrestricted use of any information for any purpose, commercial or otherwise.”
Breakroom Provisions currently offers a variety of combination deals to customers and claims its combination offerings are versatile.
In contrast, some other micro market companies have a different view. Some apparently believe the operator does not need to own the data to reap the benefits of market data based promotions.
In its contract, Company Kitchen has the right to mandate product promotions and loyalty programs to its micro market operators and to approve product promotional programs initiated by the micro market operators.
Currently, Company Kitchen offers promotions to micro market consumers.
Avanti Markets has language in its contract that “commercial advertising” revenue must be shared between Avanti Markets and the micro market operator.
Avanti Markets recently released a customer rewards program. The company claims to have the ability to offer meal deals and bundling deals.
Retail 365 offers its clients a comprehensive and strategic analysis of its sales data as well as access to its proprietary product optimization algorithm. The company claims the combination of these items helps its micro market operators optimize profits.
Operators must understand data needs
The micro market operator must have a clear, unequivocal understanding from the equipment provider as to the ownership of the data. Operators who wish to rely on the kiosk provider for promotions will have to be willing to work with a company that owns the data. Operators who think they might wish to develop their own promotions with the product manufacturers, however, will need to own their own data.
Either way, the micro market operator should be associated with an organization that can provide independent consumer analysis. In retail channels like grocery and convenience stores, such organizations exist and work with product manufacturers to provide such data. Perhaps the product manufacturers can provide similar guidance to the micro market operators.
Vending operators for the most part just track and report vending purchases, not consumer sales. This is a 20th Century approach, increasingly not viable in the 21st Century.
Currently, my firm, Vending Consultants Co. is conducting a micro market test to analyze the micro market data with a micro market operator and product manufacturer to increase the monthly micro market sales by 20 percent. To achieve this objective, products and promotions beyond those normally associated with vending will be tested.
