How To Place More Micro Markets By Reevaluating Location Size

Dec. 21, 2017

The number of micro markets continue to grow. Bachtelle & Associates estimate that there were 17,806 placements by the end of 2016, which is dramatically higher than a year ago. In many ways this is great news, as same-store product sales generally increase with micro markets compared to vending machines. In addition, there are merchandising and promotional strategies with micro markets that just don't exists with vending, except in rare instances. However, it also means certain areas of the county are beginning to feel saturated. These areas embraced micro markets early on, adding them quickly, and grabbing the majority of large locations that easily converted to the open concept refreshment solution. Now they are looking around and working to adjust their micro market strategy to serve locations with fewer employees to widen the playing field.

Going smaller in scope

Many operators who first launched micro markets in 2009 and 2010, were reporting that it only worked in locations of 200 or more. As time went on, progressive operators found they could place micro markets in accounts of 100 to 150, but it had to be the right account without a lot of outside competition for the food dollar. Fast forward a few more years, and operators are now putting them in smaller and smaller accounts, with 11 percent putting micro markets in accounts with fewer than 50 employees, according to the latest Automatic Merchandiser State of the Industry Report.

Using a smaller kiosk

To assist operators in their efforts, micro market suppliers have been working to develop and launch kiosk and micro market systems that have a smaller initial investment, in theory allowing them to be placed in smaller locations. There have been a number of new entrants using this premise, that don't even offer a full-size version. These lower cost micro markets are often tablets or iPads that act as a scanner and payment platform. The racks and small coolers can be separate or connected as though the entire unit is a mini display with checkout.

Maintain look and feel

While a lower kiosk price is desirable, many operators have found they still need to be careful where they put mini micro markets. There is still a need to regularly service the micro market. It keeps the product fresh, but also ensures the market looks desirable. Neat, properly faced products, full rows and orderly shelves, all add to the micro market's look and feel. Operators struggle with micro markets that get picked over and messy, as these don't draw in consumers to make purchases. Savvy operators know the perception of a micro market is just as important as what is offered within it, if they want to keep sales high. This attention to service carries a substantial cost. In order to keep a micro market at a smaller location, there might be an opportunity to get the location to subsidize part or all of the food in the micro market.

Add more shelf-stable items

Food waste, especially of expired fresh food, is another large expense for micro market operators. The smaller a location, the more likely those food items won't be purchased. The operator can only charge so much for the other products to make up for spoilage. Operators are overcoming this challenge by offering fewer fresh items and instead focusing on trendy shelf-stable offerings, such as breakfast bars

and protein packed cookies. By combining them with high end and popular beverages, the micro market can still feel like a high-end refreshment solution to consumers, unmatched by vending machines.

The larger the micro market portion of the operator's business, the easier small micro market are to manage. All the warehouse management, product picking and sourcing, refrigeration, food safety protocols, and merchandising plans are already in place. This helps some micro market operators serve smaller employee sizes without incurring undue costs.

Fill in existing routes

Some micro market operators are also looking at the physical location of these smaller offices as a possible solution. They consider the profitably of providing a mini micro market to a company very close to a large micro market location. The driver is already going in that direction with product, making it economical. If there is room in the truck, and the extra time is more than paid for by the sales, it is a successful way to service a smaller location.

The combination of less expensive micro markets units meant for smaller locations as well as creative solutions using existing service practices has certainly led to more options for micro market operators. Servicing smaller locations is not without costs and challenges, but it is a direction many are headed as areas become saturated.