Before 2011, Chuck Olson of CNC Vending, serving Houston, Texas, would have said his company was just like every other vending company. He sold the same products, with the same equipment, as his competitors. The only selling point he could make was better service. However, at the Chicago 2011 National Automatic Merchandising Association (NAMA) OneShow, Olson came across three ideas that changed the future of his company: cashless payment options, self-checkout micro markets, and the NAMA industry growth strategy (IGS).
At the show, veteran operators were presenting a more positive and exciting consumer experience. That really spoke to Olson, who had been in business for only three years. And he saw that technology could make it happen.
First was credit and debit card acceptance, which offers users more payment options, allowing them the convenience they want, while allowing them to buy more product than they could afford using only the cash in their pockets.
Micro markets present a completely unique experience for vending customers with convenience store product variety, and value that can increase sales at a location.
The IGS, the association’s strategy to target new vending consumer markets and grow existing ones, especially Gen Y, led Olson into the realm of social media. He embraced it, and started his own social media campaigns, which won him the first and only NAMA operator innovation award, the 2012 Gold iSpot award.
Olson’s success in vending did not happen without previous business experience.
Drawn to vending’s cash flow
After a career as a successful accountant, investor, restaurateur, real estate owner and landlord, Olson found vending. He thought it would provide the positive cash flow he was looking for, and was somewhat recession proof. He bought a 4-route operation in 2008 with a silent partner. He spent the next year learning the business. “It’s not for the faint of heart,” said Olson. “But I love it. It’s fun.”
Olson had ups and downs at first. He immediately condensed the four routes into three, in order to be more efficient. He lost two large accounts in the first month. He then picked up another significant location. “There’s a lot more to this business than babysitting machines,” Olson said. He was surprised by how much maintenance vending machines require. He also decided the investment was too high for telemetry, so he kept a paper-based inventory management system.
In 2011, Olson attended his first industry trade show. “It’s the best thing this company has ever done,” he said. “It was a turning point.” It changed how Olson viewed the industry — no longer a daily grind, but something new and exciting, with opportunities to grow sales at every location.
Cashless— the first move
Olson chose the USA Technologies’ ePort for his cashless system in 2011. And now 250 machines have readers that take all debit and credit cards, as well as near field communication payments, including Google Wallet. It’s a selling point for CNC Vending, which also increases sales. “Every machine that goes out now has a credit card reader,” said Olson.
This June, Olson will start using two-tier pricing, with a surcharge for customers using cashless payment. He has already received some pushback from locations, but feels it’s a move he has to make to cover the cost of the transaction.
Micro markets drive sales increases
“I’m just so excited about the markets,” said Olson, who installed his first micro market five months after the 2011 NAMA show. He quickly added two more in early 2012, with five to be installed in June.
For Olson, the micro markets, which he calls “CNC Company Markets,” hold many positives he isn’t getting from vending. First, the drivers don’t handle cash. Second, it has real-time data, so he can see what’s selling and what’s not. It also allows him to adjust prices or give refunds immediately. “They’re operationally easier to manage,” he said.