When I heard someone call micro markets "the shiny penny" of the industry, it got me thinking about their staying power. Were micro markets just the latest new concept to dazzle until something better comes along? After all, I know there are quite a few operators struggling with micro markets, from the fresh food spoilage to theft. Some aren't even willing to invest in the concept.
Micro markets are indeed an investment. However, that is exactly why they aren't going away. It's not just a new piece of tech or a fancy dress on an existing concept. It is a different service model that our business owners are ideally placed to handle and it makes money.
Dealing with spoilage
Admittedly, because micro markets are more open than vending machines, more products are required to fill the space. This is a selling point among consumers who can now pick from several flavors of an item rather than being limited to the choice in the vending machine. However, the danger in having all this food is spoilage. The items code out before they are purchased without careful inventory management. This is especially true of the fresh food in micro markets. Fresh food was losing ground in vending machines as consumers didn't like to buy salads and sandwiches from behind glass. The segment boomed in micro markets where consumers could pick up and examine the entrees before purchase, especially as operators used different packaging and even different recipes to enhance the fresh food selection. Fresh means short shelf life however, and that requires acute attention to expiration dates and proper temperatures. Successful micro market operators have invested in reporting tools, micro market segment managers and better warehouse technologies to reduce spoilage. This hasn't been cheap or easy, but those dedicated to the segment see the benefit. The sales just simply increase when a micro market is placed, especially those from food items.
Patchwork of regulation
Another obstacle to micro markets is that depending on the county or state health departments, an operator may or may not even be able to place one. In many states, such as Indiana, micro markets are not allowed in areas open to the public such as car dealerships, an expansion that other operators are looking towards as other location types reach saturation. Even the licensing and paperwork vary. In parts of Ohio, operators are forced to fill out paperwork meant for restaurants just to convert a bank of vending machines to a micro market. In contrast, many operators in Wisconsin are allowed to operate a micro market under their vending machine license. The patchwork of regulation is something NAMA is working very hard to address with local and national support. The investment in advocacy is a forward-looking investment, but no less substantial in cementing the micro market segment. Today there is even more news on this important advocacy front.
The anxiety about consumers taking products without paying has always surrounded micro markets. Depending on the temperament of the operator, this is a serious problem or the cost of doing business. It is, however, one of the hot topics of 2018 for micro markets with a number of our readers setting it in the cross hairs. They are investing in loss prevention personnel, better camera equipment, and developing strategies to discover and handle theft. You will be able to read about some real-world techniques in the upcoming March issue of Automatic Merchandiser magazine.
Signs point to continue
Micro markets are preferred by customers and growing fast. Even longtime industry consultant Brad Bachtelle admitted that the opportunity for micro markets is higher than what he forecasted early in their introduction. In our surveys, micro markets always rank as having the highest growth potential. Full service operators are nearly always more optimistic about the micro market segment than vending or even office coffee service. This segment will become more important to our industry as it evolves into convenience services, so stay tuned.