Smart stores, premium products and micro markets fuel double-digit industry growth

The exclusive data revealed strong growth, driven primarily by continued gains in micro markets, premium product offerings and emerging technologies like smart stores. Industry revenue increased by 30% year-over-year, following a 20% increase in the prior year. Panelists attributed this to several factors: higher product prices, increased operator sophistication and a jump in micro market installations, from about 40,000 to over 55,000 active locations.

New technologies like smart stores are gaining traction, especially in nontraditional settings like fitness centers, residential complexes, airports and car dealerships. Smart stores allow multi-item purchases and combat shrinkage more effectively than open micro markets, which often face theft challenges. Operators are beginning to deploy smart stores in locations where vending was once the only viable option, indicating an evolving operational strategy.

Fresh food and premium products are driving higher ticket sales, the panel noted. Operators are successfully selling higher priced, higher quality items in micro markets and smart stores. Fresh food, in particular, has seen strong growth thanks to better merchandising and packaging, with some smart stores generating more than $20,000 monthly at high volume sites.

Remote monitoring and real-time data are key operational tools to ensure success. Operators adopting robust vending management systems (VMS) and remote monitoring tools are gaining efficiency, streamlining routes, optimizing product mix and reducing service calls. Real-time inventory visibility is particularly important for high value or perishable items in smart stores.

Smaller operators can compete through agility and service. Despite ongoing industry consolidation, there’s room for small and mid-size operators to succeed, especially if they deliver superior service, act quickly on new opportunities like smart coolers and present professionally in-person and online.

In an increasingly digital world, smart operators will keep in mind that a strong digital presence drives inbound leads. Operators with strong websites and local SEO are capturing more business. Inbound interest often begins with a Google search, so appearing among the top three local results is critical for winning new accounts.

Markets are not one-size-fits-all: Operators were advised to tailor their solutions — micro markets, vending or smart stores — based on each location’s environment, workforce size, security and product demand. Flexibility, rather than pushing one format, leads to more sustainable growth.

Finally, growth requires planning and capital. The panel emphasized the importance of proper capitalization and strategic planning. Operators scaling from a few machines to a full-service business need to budget not only for equipment but also for vehicles, warehousing, staffing and marketing. A general rule: expect costs to be double what you initially anticipate.

The panel included Tony Danna, the vice president of small business and general manager of Cantaloupe Go Markets at Cantaloupe Inc.; Natali Pupovac-Peters, head of global operations at Naturals2Go; Jeff Criswell, business growth consultant as well as a vending/ micro market operator with Naturals2Go; Matthew Rainey, owner/operator of Surpass Refreshments; industry consultant Orrin Huebner; and our own Bob Tullio, contributing editor of Automatic Merchandiser and VendingMarketWatch.com.