Typical vending route drivers don’t make good micro market service providers. That is what early adopters of this newest business opportunity in vending quickly discovered. Vending drivers are trained for efficiency -- to quickly fill a machine, wipe it down and move on to the next account. They don’t have the training or skills, usually, to properly face product for a more pleasing display or pay attention to stale dates when filling products on shelves (putting newer products in back). This leaves a vacancy to be filled, but by whom?
Hire a stocker
"There's probably been more testing on micro market service than anything in the industry - on who the driver should be and how the driver should be compensated," said Michael Coffey, vice president of strategic initiatives for Canteen Vending Services. Coffey has been analyzing micro markets since Canteen launched its version, the Avenue C, in 2012. He sees the potential for operators to actually get more revenue for less labor cost from this new on-location, but unattended automatic merchandising opportunity. "It's a different person and different compensation structure," said Coffey.
For example, if a typical vending route driver makes $40,000 a year. Coffey compares that to the person stocking shelves at the grocery store who is facing shelves and looking for out of date products. The stocker is probably making $25,000 a year.
The micro market job is ultimately a hybrid of a typical driver and retail stocker, because there is some transportation of product involved as well as doing retail-like product merchandising. Therefore, in Coffey’s opinion, the wage for that micro market worker could be $13 per hour, nearly $30,000 per year. That is a savings of about 25 percent on a vending driver’s salary.
"It's a different business model," said Coffey, "and immature enough that we can set the expectation for the industry."
A less demanding job
"I don't think the job is an arduous," said Coffey about micro market service. He cites the fact that the typical vending route driver touches all the products in a machine every time he or she is at a location. Each slot needs to be refilled. In a micro market, there is room for a greater volume of products. The product replenishment levels provided by the backend systems mean, optimally, a driver should only touch 25 to 30 percent of the products in the store at each visit, including the fresh food and top-selling items. "The micro market driver has ability to generate much more revenue for less time," added Coffey. Therefore, paying the driver a salary instead of commission is preferable.
In the end, Coffey believes a real benefit of micro markets is that they can potentially reduce the cost of labor. Sales increase and the driver wage is lower. Operators could potentially see a 5 percent reduction in labor costs depending on their pay scale and market. It’s another return-on-investment to consider when investigating these new opportunities.
