Technology spells success for Virginia operators

by Emily Refermat
Created: February 1, 2013

How two vending operators who believed in the value of technology partnered to beat the recession and become the largest independent vending operation in Richmond, Va.

Partners Scott Halloran and Michael Calkins focus on new technology to enhance their operation.
Partners Scott Halloran and Michael Calkins focus on new technology to enhance their operation.
Co-owner of Trolley House Refreshments, Michael Calkins, explains how the micro market works at a new location.
Co-owner of Trolley House Refreshments, Michael Calkins, explains how the micro market works at a new location.
Customers at the micro market launch have a good time.
Customers at the micro market launch have a good time.
Vince Lewis installs a new VendScreen unit.
Vince Lewis installs a new VendScreen unit.
Trolley House has its own private coffee blend.
Trolley House has its own private coffee blend.
Dan Houston, general manager at Trolley House Refreshments, runs the Streamware system.
Dan Houston, general manager at Trolley House Refreshments, runs the Streamware system.
Connie Wager, Trolley House office manager, handles phone calls.
Connie Wager, Trolley House office manager, handles phone calls.
Hilda Brooks, gets her pick list from the Lighspeed terminal in the Trolley House warehouse.
Hilda Brooks, gets her pick list from the Lighspeed terminal in the Trolley House warehouse.
JB Eads picks product at the Trolley House warehouse.
JB Eads picks product at the Trolley House warehouse.

“Micro markets allowed us to expand our products,” said Calkins. Trolley House could offer customers 400 products in the markets. And many of the healthier items also did well in vending, if the price point wasn’t too high. The partners found products like string cheese, rice chips and protein bars crossed over well.

Markets increase food sales

Food items sold well in micro markets. For Trolley House, food represents 30 percent of micro market sales, while only 2 to 3 percent in vending.

“The huge increase in fresh food usage challenged us internally at first,” said Halloran. Trolley House had to add large walk-in coolers, create refrigerated zones in the trucks and add systems and security to track food temperature. It does not operate its own commissary, instead buying food from a third-party.

Every month, Trolley House continues to add micro markets. Ideal locations include 150 or more people who work for one company within a semi-secure area. Public locations don’t work well and increase shrinkage.

New location promotion

Promoting a new micro market is important to success. “We always hold a grand opening the first day,” said Calkins. Trolley House sets the stage with balloons, flyers, raffle prizes and edible samples. The grand opening allows Trolley House to teach location employees how to use the micro market kiosk and put money on their Avanti card. About 50 percent of employees use the market cards to pay instead of cash or credit.

While Trolley House recognizes that micro markets have a place in the successful vending business model, vending is still a strong opportunity. “Vending is never going away, so we’re investing big in vending too,” said Halloran.

Vending management and prekitting

It wasn’t just micro market technology that helped Trolley House grow, but also vending management software and prekitting. Both Halloran and Calkins added Streamware VendMax software to their operations. It helped the two owners develop route efficiencies and save on labor. Halloran calculates the return on investment, with just those benefits, was 24 months. There are also other efficiencies that are harder to measure, such as the benefits and savings related to prekitting.

Halloran started prekitting in 2009, while Calkins didn’t start until the two operations merged into Trolley House. Prekitting had many benefits, including allowing Trolley House to customize products by location. A location could make special requests and have unique products, rather than what was available on the route driver’s rolling warehouse. “It becomes the customer’s machine,” said Calkins.

A year after the merger, Trolley House took its prekitting program to the next level by installing LightSpeed Automation, a pick-to-light system for the vending warehouse.

“It was one of the easiest technology roll outs I’ve ever experienced,” said Halloran about LightSpeed.

Not only has LightSpeed allowed Trolley House to prekit products more quickly, but it created a centralized point where all the data is funneled. The Avanti and Streamware data both funnel into the LightSpeed system.

“We even created a committee where the warehouse manager meets monthly with the vending manager and micro market manager to discuss issues,” said Halloran. Issues might include bad data, shrinkage or slow selling products. The managers analyze the bottom selling units for vending and micro markets on a month to month basis and change out the slowest moving products to provide better variety to the customer. “We’re finally catching up to retail,” said Halloran, “we’re going to do a much better job moving forward.”

Halloran and Calkins have found their employees very helpful throughout the technology rollouts. “We’ve got a really good team,” Halloran said. Trolley House has almost zero turnover with most drivers working 5 to 20 years. It offers drivers full benefits and competitive salaries.

Adding the cashless component

While Trolley House has always been an early adopter of technology it didn’t add many cashless payment options to its machines. “I was never excited about cashless platforms,” said Halloran, “until VendScreen.”