Product Suppliers Can Help More With Technology

Aug. 15, 2007
Operators Need to Invest More in Technology.

The State of the Vending Industry Report, beginning on page 44, notes once again that new market realities require operators to invest more in technology. The need has been apparent to many observers in recent years.

Most operators, however, remain slow to invest in technology. And in all fairness, their reluctance is partially understandable.

When asked, most operators say they recognize the benefits technology can provide them. Cashless transaction capability improves customer satisfaction and enables higher price points. Remote machine monitoring improves operating efficiencies.

But operators don’t want to make the investment required when only a handful of their colleagues have verified a sufficient payback.

‘Chicken and egg’ scenario

This challenge is a classic “chicken and egg” scenario.

Operators are reluctant to invest because of the risk that it might not pay off. But at the same time, successful operating models will not emerge until more operators invest in new technology.

It’s about time the industry’s product suppliers took a more active role in helping operators move into the future.

Some large beverage manufacturers have taken an important first step by equipping machines with credit card readers. They have funded field tests, shared their findings and are developing “best case” scenarios for cashless vending.

Other product suppliers have also come forward on an individual request basis to support operator investment in telemetry-based remote machine monitoring systems, largely at the urging of telemetry providers. The telemetry providers have urged product suppliers to consider
the benefits of better market intelligence.

Product suppliers must do more

But it’s time that more product suppliers got involved helping operators invest in new technology. Product suppliers, after all, have as much at stake in operators’ success as anyone.

About a year and a half ago, one product manufacturer came up with a technology incentive program for operators.

The company offered to share in the cost of investing in technology. They invited operators to qualify for technology rebates, which funded part of the cost of various technology hardwares.

The program didn’t get very far. An executive involved noted that operators didn’t feel that it was generous enough.

Formal incentive program

What’s needed is a structured technology investment incentive program supported by not one, but a group of product manufacturers. A program involving multiple suppliers will be most effective.

A meaningful investment incentive program will convince operators the supplier community is committed to their success.

Product rebates have already supported operator investment in frozen food machines. These rebates have been a three-way-win for the product manufacturers, the equipment manufacturers and the operators.

A key component of the frozen food rebates is the support of multiple suppliers.

Product and equipment manufacturers could work together to develop a technology incentive program that would get operators’ attention.

The operators, for their part, will need to respond in a positive manner to the chance to invest in technology.