Micro Markets: The Logical Next Step For Vending Operators

April 1, 2016

In the most recent State of the Vending Industry report from Automatic Merchandiser, nearly 25 percent of industry operators last year expanded into a new service. Of that amount, 40 percent added micro markets. For many operators, micro markets are a logical next step when looking to expand services and add upward revenues. 

Expanding service

Dan Holt, Jr., president of Canteen L.C. Vending located in Fayetteville, TN, believes that micro markets are a logical next step for vending operators mostly because many vending products fit well in a micro market setting and are easy to incorporate. Holt opened his first micro market in 2013 and has been able to additionally use the commissary the company purchased in 2004 to offer fresh food to micro markets. “With our commissary, we’re able to make anything and we’re able to do it in a timely manner,” Holt told VendingMarketWatch last year.

Micro markets also provide a service that goes above and beyond customer expectations, says Ryan Harrington, president of Royal Vending, located in Portland, OR. He believes adding micro markets is a good ‘next step’ for vending operators who want to go the distance for their customers. “We experience a high level of increased customer satisfaction when a new micro market is installed in place of the old vending bank at a company location,” said Harrington. “Our customer feedback is very positive.”

The uptick in sales is a plus, too, he says. “Every market has given us a 100 percent to 300 percent lift in sales and profit. Our company feels that micro markets are a definite win-win for the customer and our bottom line.”

Operating a micro market doesn’t come without its challenges for vending operators just entering the segment, however.

Overcoming challenges of expansion

Both Holt and Harrington revealed that one of the biggest obstacles in entering the micro market segment was the increased number of SKUs. Harrington saw the hurdle in increasing his company’s SKUs by two to three times what it offered when it was just a vending operation. Holt had a similar experience and had to take steps to manage the added inventory. “Soon we realized that we really needed to operate the markets as a separate business, so we did that by adding dedicated routes for our micro markets and concentrated more on proper merchandising along with building and managing a good fresh food program,” said Holt.

For Harrington, the installation process for setting up a micro market varied significantly from a vending installation, and the company needed to find a solution that worked. To help make the transition easier, the company set up its infrastructure for installation and servicing micro markets before it installed its first market. “We aligned with a store fixture company and low voltage installer, local in our area, to assist with our micro market installations,” he said. “We also set up new local fresh food and produce vendors to handle our anticipatory growth with these products.” Being proactive with the changes that the company expected with the addition of micro market service helped Royal Vending with its transition, Harrington concluded.

Micro markets are a fast growing segment and an exciting growth opportunity for vending operators who are looking for the logical next step in expanding services.