Self checkout micro markets are the fastest growing segment in automatic merchandising today, carving a new niche in our nation’s retail landscape. Being a new format, many questions remain about financial metrics and the best business model for operators to use with these systems.
But what the vending industry needs to recognize going forward is that 1) the technology doesn’t stand still, and 2) the micro markets will have a big, positive impact on traditional full line vending. The micro markets will inject vending with a long needed shot in the arm.
In his article on page 18, contributing editor Allen Weintraub reviews the key questions vending operators should ask themselves in deciding which system to invest in. The more salient topic he brings to light, however, is the revolutionary impact of the consumer data that the micro market software gathers for operations and marketing.
Vending enters a new era
The micro markets are bringing vending into the world of retail marketing in a more powerful way than ever.
Most micro market providers are offering customer rewards programs and combination offers. Because the system providers have roots in vending, some have recognized the benefits of adapting these programs for vending and are developing ways to introduce them to vending.
The vending industry’s adoption of cashless payment technologies, meanwhile, sets the stage for a consumer data revolution in vending.
Cashless systems evolve
Cashless vending system providers are developing interactive prepay, coupon and loyalty programs to enable operators to offer prepaid cards that give consumers the ability to reload a card, stack up loyalty points and be rewarded for their purchases with coupons and promotions. The programs can be integrated into Facebook and other social media sites.
These payment systems will allow vending operators to adopt micro markets’ marketing programs, giving vending a whole new set of consumer benefits.
In his article, Weintraub notes the micro market operator’s first objective is to enroll customers in stored value card accounts so that the individual consumer can be identified. By using cash to upgrade the stored value card, credit/debit card fees are eliminated. More importantly, the operator has access to data about the consumer that opens the door to value enhancing marketing opportunities.
Keep in mind: technology doesn’t stand still. Consumers are already using their mobile phones as mobile wallets. Even for vending purchases.
When consumer product manufacturers realize the marketing power the vending channel can give them with these new tools, vending will command the same relevance for these manufacturers as supermarkets, mass merchants, drug stores, restaurant chains, and convenience stores. The manufacturers will then invest more of their marketing dollars in vending.
The future is already here
The immediate opportunity for vending is to use the data that the cashless programs generate for marketing and operations.
The micro markets, meanwhile, are helping to drive the vending industry to a bold new future.