Dan Mathews, executive vice president and chief operating officer of the National Automatic Merchandising Association (NAMA), updated attendees at the Southeastern Vending Association Convention in Destin, Fla. on the progress of NAMA’s industry growth strategy (IGS), a multi-faceted growth strategy announced at the NAMA OneShow in April. Speaking to one of the largest SEVA turnouts ever on the second day of the convention, Aug. 3 to 5, Mathews estimated the price tag of the ISG at $1.5 million and noted it is the most ambitious such project in NAMA’s history.
Mathews reviewed the consumer research NAMA conducted before developing the IGS. The key takeaway of the research is that consumers hold a more positive perception of vending than vending operators themselves do. “You have a lot to be excited about,” he said. “The consumer’s perception is not negative.”
It was also noteworthy that Generation Y consumers, the “millennials,” have the most favorable view of vending. This is important not only because Gen Y is the future, but because other consumers often follow Gen Y’s lifestyle habits.
A key challenge the research found is the need for the industry to overcome the perception that vending does not provide a good value for the money.
The research found that 50 percent of non-users and 33 percent of users believe this.
Another challenge is having the products consumers want. Both users and non-users indicated this was the main reason for not buying from a machine, next to cost concerns.
The third most frequent reason cited for not buying from a machine is not being able to make a cashless transaction.
Before delving into the IGS, Mathews said the research verified that vending faces a big challenge when it comes to consumer health awareness. He said most users of vending machines say they are not necessarily looking for a healthy item in a vending machine, but they still want vending machines to offer these items. “Consumer feel good about vending companies that offer healthy options,” Mathews said.
He noted that a 2006 consumer survey yielded very similar findings to the recent survey.
Focusing on IGS, Mathews noted the purpose of this campaign is to grow the business. A big part of the campaign focuses on Generation Y, an audience that wants to participate in a dialogue and have its views heard.
A key component is Facebook contest by which consumers can encourage friends and family to “like” their favorite machines and share pictures, share videos and win cash.
Mathews showed the Website, www.facebook.com/VendLoveWin, where consumers can participate. “It’s really hip and cool,” he said.
“We’re so positive this is going to work and give you some growth,” Mathews said. “But we need your help with this.”
He said operators should promote the Facebook contest to their customers. He suggested operators place a link to the site on their own Websites and Facebook pages.
He also suggested placing a poster at vending banks to promote the Facebook Website.
Another part of the ISG is the “Gratitude Tour,” a mobile marketing tour of innovative vending machines that will dispense free products in large urban settings, complete with musical entertainment and media presence. A key message from these events, which will take place in seven cities beginning in September, will be that vending is Gen Y’s preferred retail channel.
Mathews showed both an artist rendering and a diagram of what the Gratitude Tour exhibit will look like.
“Putting Vending Online” is another part of the campaign, whereby Gen Yers will be invited to dialogue about vending in blogs, Websites and through social media. Mathews said there are video skits about being designed to be presented online.
A mobile nutrition application is being developed for consumers to use when buying from a vending machine.
NAMA is also developing game applications about vending that have the potential to generate revenue for NAMA.
Another part of the campaign is “Vending Vangurd,” which will provide third party endorsements about vending. NAMA has already communicated with associations that interface with Gen Y, such as the American Student Government Association, the National Association of College and University Food Services, and the National Association of College Auxiliary Services. NAMA will also reach out to Gen Y recreational groups.
Mathews said the campaign overall will encourage more vending operators to join NAMA. He also thinks it will make existing members more committed to their industry and more focused on marketing.
“We’re convinced this is going to increase your sales,” Mathews said.