By now, the euphoria many of us felt at the Las Vegas convention, with its outstanding attendance and a barrage of exciting high-tech innovations, has subsided. We are back to the daily grind of a stubborn recession. Our State of the Vending Industry Report, beginning on page 8, serves as the industry’s annual “reality check.”
There was a lot of positive media coverage in 2011 about interactive touchscreens and what they can do for vending, thanks in large measure to NAMA’s media outreach campaign. The self checkout micro markets also gained a lot of exposure, which further uplifted our spirits.
But for all the promise that technology has to offer, the challenges of surviving in today’s economy make it hard for most operators to consider long-term investments. These technical marvels, while promising, carry a long-term payback. A payback that most operators have a hard time believing in right now.
Reality: reason for optimism
But the reality check beginning on page 8 allows readers to recognize there is in fact reason to be hopeful.
Because our State of the Vending Industry Report delivers hard facts on the industry’s performance, any good news to be found is more believable than if it were based on false hopes. And good news there is.
I’m not talking about the fact that the 1.5 percentage point sales decline in 2011 was the best performance since 2008.
Instead, I point to the fact that operator investment in technology, while slow, has been moving in the right direction despite a difficult operating environment.
Progress amidst challenges
Operators added thousands of cashless readers in 2011, more than in any other year. This is good news because it shows that despite the unfavorable economy, operators are recognizing they need to respond to a changing market.
The economy wasn’t the only thing that made it tough for operators to invest in technology in 2011. The Durbin amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 delivered a tough setback for cashless vending.
When the Federal Reserve announced caps for debit interchange fees, financial institutions raised fees on small ticket transactions to cover anticipated losses on larger transactions. Many vending operators stopped accepting debit cards and put their cashless programs on hold.
But eventually, cashless providers announced reasonable interchange fees on most debit cards. And operators saw fit to resume their cashless programs. Investment in cashless technology continues at a healthy clip.
Solutions bring new blood
As technology helps improve our industry’s image, more people with experience in other industries are taking an interest in automatic merchandising. Case in point is Charles Olson of CNC Vending in Houston, Texas, subject of this month’s cover story, beginning on page 30. Olson is the first operator to win the NAMA iSpot award.
New technology needs to be viewed in the context of the business facts that face us day in and day out.
The State of the Vending Industry Report serves as a reality check. As such, it offers reason for realistic optimism, the best kind of optimism.
