Micro markets are a prominent and growing segment in the vending and OCS industry. The popularity of micro markets for operators can be attributed to several factors including increased diversity in snack and beverage choices, more payment options for customers, the ability for consumers to touch and examine food, as well as the ease in purchasing multiple items at once – all of this leading to increased sales for the operator.
Buffalo Rock Co., located in Birmingham, AL, has had success growing to 53 micro markets in just a little over 3.5 years. “They are a huge employee benefit and I don’t see traditional vending coming back to places where a micro market exists,” said Dick Hanson, executive director of marketing and sales for Buffalo Rock Co.
Another perk that micro market operators can offer consumers that isn’t widely used in vending is the stored-value account.
Stored-value accounts tie a consumer purchase to his or her personal account. When a consumer logs into their account and makes a purchase, they have the ability to load money, see past purchase history and earn rewards. Hanson also noted that his customers like getting their purchase texted or e-mailed to them when they use their account. From an operator’s perspective, stored value accounts mean lower credit card fees, payment in advance of a purchase and higher spending per transaction than cash, as reported by Automatic Merchandiser.
Despite the benefits—for both operators and customers—of micro market stored value accounts, usage is still nearly the same as credit/debit purchases, even though they don’t come with the perks. In fact, Joe Hessling, CEO of 365 Retail Markets, told Automatic Merchandiser that in his experience, transaction mix is steady with 49 percent of micro market purchases made with a credit/debit card, 49 percent with a stored value account and 2 percent with cash.
“There is a 90-100 percent usage rate of stored value accounts at the beginning around the grand opening and then it drops down and plateaus as people get into their habits,” said Ryan Harrington, president of Royal Vending, located in Portland, OR.
So how do operators increase stored-value account usage among the micro market consumer?
- Give incentives—“We pre-load $2 onto every user’s account,” said Harrington. Doing this encourages employees to go back to their account to make a purchase. Another incentive is to offer a larger ‘perk’; for example, for every $100 of pre-loaded funds, incentivize the user with a $5 or $10 ‘bonus bucks’.
- Get a thumbprint into the system—Employees can’t leave their desk without their thumb. If they have money on their account and forget their phone or credit card at their desk, they still have the option of purchasing items with their thumbprint.
- Host a tasting—Every few months, host a tasting. This is great opportunity to introduce users to new products and to encourage them again to use their account. Employees come and go, and so this will also give you a chance to connect with the new employees who weren’t at the market’s grand opening.
- Tie promotions to accounts—One easy way to drive account adoption is by tying micro market promotion to a user’s account. In order to take advantage of the “Buy 1 Get 1 50% off” deal, the customer will need to log into their account.
- Manufacturer give-a-ways—“We once gave away polar bears to those consumers who bought a Coke,” said Harrington. The customer had to be logged into their account for Harrington to know who purchased a Coke.
“One benefit of using your account is the 365 User portal,” continued Harrington. “Micro market users have the option of funding and managing their accounts on their own computers or tablets using the portal. This is another benefit that we highlight at our grand openings and plan to revisit at our future Open House promotions.” In the last year, 41 percent of Royal Vending’s total micro market sales have been made using an account.
As operators dig deep into micro markets, beyond the 101 lessons, the challenge to further engage the consumer and keep the market fresh will take more time and attention. Spending some time focusing on driving consumer account adoption could have big payoffs in this upwards-trending segment.