Competition Will Force Payment & Marketing Creativity

Aug. 17, 2017

Online ordering is certainly convenient. After all, in our technology-filled society nearly 8 out of 10 people carry around a small personal computer, aka smart phone. However, while shopping and paying might be fast and easy, getting the item is not. It's either pay high prices for next day delivery or wait the more affordable week.  

Online retail giant Amazon has been trying to fix this disconnect between convenient ordering and convenient consumption. The company offers same-day delivery in certain cities, has experimented with drones that drop packages, and even opened the Amazon Go unattended convenience store. The company has just taken another step towards instantly meeting customer demands by adding Instant Pickup to five cities close to colleges. The idea is that prime and prime students can purchase an item and then go pick it up within two minutes at a nearby Amazon location from locker vending machines. According to Reuters, Amazon is hoping this will encourage people (students as of now) to order things like soda and snacks, as well as replacement technology such as phone chargers and hundreds of other fast-selling items.  

At first, I wondered how relevant this was for the industry. After all, while brick-and-mortar retailers are feeling the hit from online retailers, it's only marginally affecting the vending, micro market and office coffee service industry. OCS providers experience this the most, with customers buying ancillary products and coffee online that will be used in brewers provided by the OCS company. Amazon is not used for impulse purchases like a cold soda or protein bar. Plus, vending machines and micro markets are on-site -- down the hall instead of down the block or miles away.   

Does this mean we are in the clear? I don't think so. Today's consumer has so many choices, so many options that many will overlook the convenience of on-site retailers in order to get just the item they want or need. Not having cashless payment options might also drive consumers elsewhere, right into an Amazon or convenience store location. 

Overcoming competitors 

What's the answer? Is it offering online ordering for your OCS customers? Is it accepting credit and debit cards at all your vending machines? Is it changing the mix of products and services you sell? Probably, and more. However, what I do know is that while the industry should try to adapt and embrace the way society wants convenient online ordering, cashless payment options, and their favorite products with top quality service, you can't be everything to everyone. It's not realistic. This is where product level data and reporting comes in. Stay on those best sellers, emerging trends, and constantly adjust your product and service mix for profitability and sales.  

Beyond this, I think the answer is loyalty. We see loyalty programs being implemented everywhere from soda companies to airlines. It makes sense. With all the competition out there, all size companies are trying to reward customers for staying loyal and purchasing their products or services. This will work in vending machines and micro markets as well, perhaps even more so, because the machine or market is right there in the workplace, school, etc. Many of today's industry technology providers already offer ways to do this, even in vending machines.  

Vending, micro markets and OCS providers still have a huge advantage. Their offerings are instantly available. However, Amazon appears to be aiming to close the gap. Prime Now delivers within an hour, AmazonFresh Pickup within 15 minutes, and now Instant Pickup in less than 2 minutes. As an industry we have to remain vigilant in service and creatively meeting that on-site demand of customers. Let us know how you are staying ahead of the competitors. 

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