Why Micro Market Promotions Still Matter

June 26, 2020

Like most business owners, convenience services operators had to change course to effectively navigate their companies through the coronavirus pandemic. While keeping the health and safety of their employees and customers top of mind, operators are now managing supply chain issues and enhanced sanitization practices on top of an already long list of priorities. Out of necessity, this has led some operators to consider pushing certain items — like micro market promotions — down the priority list.

As offices and businesses reopen to the public and employees return to the workplace, even in staggered numbers or limited capacity, there’s an opportunity to recapture micro market customers and build loyalty through promotions.

“We believe there will be a heightened interest in micro markets and on-premise eating options,” said John Reilly, president of Avanti Markets. “Employers aren’t going to want employees to venture out; they’re looking to keep their employees safe and in the office. So, what can the market operators do to incentivize the employees to come back and shop?”

For operators who are looking to freshen up their current micro market promotions — or those who have yet to launch promotional programs — technology providers offer solutions that can have a major impact on the bottom line. 

Streamlined solutions for operators 

Understanding that operators manage many dynamic parts of their businesses, technology providers have made integrating and updating promotions as simple as possible. Operators can easily notify registered users about promotions through mobile apps, kiosk screens and email offers.

365 Retail Markets gives operators complete control over their entire operations, including promotions, through the company’s backend management platform, ADM. Ryan McWhirter, 365’s vice president of product management, said that the company makes administering promotions and loyalty programs seamless by enabling operators to create a promotion and immediately deploy it everywhere through 365’s Connected Campus. This includes micro market solutions, vending machine payment devices and selfcheckout dining kiosks. Operators have streamlined insight into their locations, products, reporting and promotions through one backend website.

“In order for it to work in this industry, it has to be intuitive, it has to be familiar, it has to be easy to scale — that’s what ADM and our promotions engine give our operators,” McWhirter explained. “When you set up a promotion on ADM, it literally works on every device that we have. It makes the operators a lot more efficient to market these promotions across their client base.”

Reilly noted that the Avanti Markets Platform was built by an operator, Jim Brinton, and that the ability to manage a wide range of promotions is embedded in the core technology platform. Initiating and running a promotion is as easy as creating a route. Operators have the flexibility of providing unique and demographically specific offers to their locations. To assist, Avanti gives operators training and hands-on consultation to help them understand and run the AMS system to its optimal level, including promotions.

“In AMS, our operators are able to create promotional bundles like buy one/get one, coupons, meal allowances, two-tier pricing or targeted promotions to specific people, days, times or products,” Reilly said. “All promotions can be scheduled for specific days or times to draw customers back into the markets for different offerings or to enhance what they’re buying. The ability to advance schedule multiple promotions, offer combinations for specific days, times or locations allows operators to efficiently manage these programs across multiple markets.”

Yoke Payments enables operators to easily manage promotions and loyalty programs alongside the rest of their operations, including sales and reporting, through their back office portal. Michael Johnson, Yoke’s co-founder and CEO, said this portal was built with operators’ feedback in mind in order to create a dashboard that truly meets operators’ needs.

“We made the user interface simple enough for someone to come in and select from a couple of pre-made [promotions] options, but to also have the customizability to make things work exactly how you want,” Johnson said. “You can let a promotion run for a bit, and then come back and see how it’s doing and make tweaks. The portal not only gives operators the ability to build these promotions, but also provides a way to analyze and improve them.”

Yoke also has a built-in loyalty program that’s available to any user who signs up for an account. This baseline program requires no extra effort from the operator; any user who has an account and makes purchases in the micro market will earn points, which can be redeemed to purchase more items in the market. Operators can then build more strategic promotions on top of this baseline program.

Vagabond’s vĪv consumer engagement platform allows operators to manage promotions through the Vagabond and Vendsys VMS platforms. According to Juan Jorquera, chief marketing officer at Vagabond, other VMS platform integrations are in the works.

“The vĪv consumer engagement platform provides the ability to influence consumer behavior so that consumers purchase more of what operators want them to buy at specific sales points at specific times,” Jorquera said. “Vagabond also assists operators with marketing guidance and assistance in the form of images, email templates and brainstorming sessions for tackling specific types of accounts and customer profiles.”

Tony Danna, Three Square Market’s director of international sales, said that the company’s 32M portal helps operators easily manage promotions. Danna noted that as long as operators are currently managing their micro market business with Three Square Market’s software, implementing promotions requires minimal change. Promotions that are successfully sold will pull directly from the inventory numbers that are already being managed within the 32M Inventory Intelligence.

“You will also be able to identify the money that the promotions have generated within this same portal,” Danna said, adding that the company is currently beta testing a new feature in stores. “The latest change that we have made is the ability to prompt an upsell of a specific product or category. When a consumer scans a product that is tied to one of the promotions, it will prompt them to purchase the additional item if they choose. It is proving to have some great success.”    

Promotions drive sales and engagement 

The nature of unattended retail previously gave operators few opportunities to engage directly with customers. Using promotions can foster that engagement, even when it’s done virtually.

“In the beginning of micro markets, engagement was driven largely during grand openings and, maybe three years later, doing a remodel,” McWhirter explained. “Promotions have advanced that in recent years, turning our operators into true retailers by highlighting new products or driving frequency with loyalty. Now, 365 is bringing more to the table with true customer engagement via the 365Pay app. In many ways, it catapults our operators beyond even what main street retailers can do today.”

Johnson explained that Yoke enables operators to offer promotions by sending push notifications to customers through their mobile app. Going an extra step, operators can also email users about a promotion or send them a coupon that they can add to their loyalty card and then redeem later.

“Some promotions are designed to build happy, loyal, repeat customers that feel appreciated, but you also want to use these tools to drive consumer behavior,” Johnson said. “A redeemable coupon keeps someone from just coincidentally saving money on something they were going to buy anyway. When you push someone a deal that gets added to their wallet, it can actually change consumer behavior. You want to encourage people to buy, but to buy more than what they would have otherwise.”

Jorquera said that operators and brands can subtly increase sales of specific products by up to 50% by displaying selected products as the first items to appear when consumers open vĪv.

“Operators can promote specific products without directly advertising to the consumer that particular products are being promoted,” Jorquera explained. “It can be thought of as ‘advertising without advertising.’ Most consumers don’t want ads prominently displayed to them and usually dismiss them. vĪv product promotions influence consumer purchases without them even realizing it and consistently increases purchases.” 

Overcoming barriers 

Promotions only work when they’re properly conceptualized and executed, and if micro market customers are aware of them.

“It’s all about driving awareness of these programs and having a sustained marketing plan like a retailer would,” McWhirter said. “If you’re simply waiting to see what you have extra inventory of in the warehouse to run a fire sale on that one product, you’re doing it wrong.”

According to Johnson, getting users on board has always been a key to success for micro markets.

“It sounds so simple, but in this self-checkout, contactless, human-less environment, it’s easy to forget, but it’s all about awareness,” Johnson added. “Especially coming from vending, when you’re transitioning into micro markets, you’ve got to have more of a retailer’s mindset. Retailers don’t just put products on the shelves and hope they sell. They’re engaging customers, they’ve got marketing, and they’re building a genuine connection between their brand and those customers. You could go through your portal and build the world’s greatest promotion, but if that doesn’t reach people, you’re wasting your time.”

Johnson said that any time a new market opens, operators should hold a grand opening, sending someone to physically sit in the market (ideally during a busier time, like the lunch rush) and inform new customers about how the loyalty program works and sign them up for it. Doing a “re-grand opening” as needed is also helpful, even as often as once a month, in order to build a loyal, engaged customer base and drive consumer behavior.

Partnering on promotions 

When it comes to utilizing advertising and marketing campaigns to drive promotions, operators are not alone. They can partner with suppliers on advertising and marketing campaigns to push promotions out to their highly desirable audience of loyal micro market customers.

“By having a collaborative partnership with suppliers or brokers — they order in bulk and can get discounted pricing — operators can get special deals.” Reilly said. “Also, work with manufacturers or partners to introduce new products. A lot of the time, manufacturers will offer collateral and support in introducing these new products with swag, giveaways or promotional discounts.”

Partnering with brands and food providers is a course of action that Vagabond always recommends to vĪv Market operators, Jorquera added.

“By forming partnerships, the operator can shift the cost of discounts from themselves to supplier partners and brands,” he added. “Product brands and operators can target particular consumers with specific promotional programs through direct mail or by promoting specific products at the vĪv sale point to support all efforts as well.”

365 Retail Markets has a relationship with Advana, a company that specializes in organizing targeted campaigns with consumer packaged goods (CPG) brands that manufacture food and beverages sold in micro markets. Ads are pushed out on screens on vending machines, digital displays in cafeterias or kiosks in micro markets.

“Advana creates relevant ads tailored for each of those devices,” McWhirter explained. “Advana can work with brands and operators alike to transmit content to our 20,000+ screens across the globe.”

McWhirter said this is especially attractive for smaller and independent operators who need help in getting a collective deal in place to get more value out of the investment in their equipment. He noted that micro market operators can offer CPG brands something other industries can’t: direct access to the workforce consumer.

“We had a certain CPG that wanted to put out a feature for a new flavor of product,” McWhirter explained. “They would give you half off the product if you answered two survey questions that were linked on that ad. That CPG got a lot of insight from direct consumers that was candid and targeted for the space it was consumed in. It was a new channel that CPG had never been able to reach before to really tap into the at-work consumer.”     

How to use promotions effectively 

Integrating promotions can be as simple as selecting a daypart to increase sales, such as a free coffee with a breakfast item to boost the 5 a.m. to 10 a.m. time slot, or offering buy one/get one free on featured products.

According to Jorquera, another way to keep consumers engaged and excited is to offer a “product of the week” deal, in which operators promote a specific product to their customers.

“That ‘product of the week’ will be promoted so it shows up at the top of customers’ vĪv menus and/or the product will be discounted to provide further incentive to purchase,” Jorquera said. “We’ve seen the impact of this particular effort increase sales of specific products anywhere from 20% to 300%.”

It can also incentivize customers to buy items that operators need to move quickly.

“We have an operator in the Midwest who has a ‘Fresh Food Friday’ promotion,” Reilly said. “On Fridays, they offer 40% off fresh foods. That’s a win-win because the market customers love to get a good deal. At the same time, it allows the operator to sell out their fresh food before the weekend.”

Moving beyond internal promotions in the micro market, Danna suggested that operators propose to their clients’ HR departments the creation of a unique rewards program for high-performing employees.

“Talk to HR about creating a ‘high-five’ program,” Danna said. “This allows HR to identify the top number of employees at the end of the month and reward them with a voucher that is only good in the micro market. The consumer then logs into their account, scans the voucher and it will top up their account with the dollar value. It is a great tool for the vending operator to get money in advance by invoicing the company for these vouchers.”

Avanti offers a meal allowance that enables the employer to load money on an employee’s stored value card.

“Every week, [employers] could give [employees] $5 or $10, and it’s good for a week. Then, it resets at the beginning of every week,” Reilly explained. “We’ve been promoting meal allowance as a way to engage with employees to keep in them in the office, safe and virusfree. We’re seeing employers start to take a bigger look at that.”

During COVID-19 and beyond

For operators who have experienced a slowdown in micro market business, Jorquera advised working closely with accounts who are still active to maximize impactful promotions.

“If the account is open, operators should be taking advantage of these programs more to increase engagement with their loyal customer base to show that they’re not going anywhere and they support their customers and are thinking of them,” he said. “Double down [on] efforts at accounts that remain busy and could use further engagement.”

Danna said operators who have seen a decrease in pantry service can take this opportunity to convert those accounts to a subsidized micro market.

“Instead of companies offering 100% subsidized products, they can now offer items at different subsidies based on what they are willing to cover,” Danna explained. “You will also be able to tier these subsidies to give different percentages based on the type of products they are purchasing from the market. A great example is to give a subsidy for only healthy products.”

As employees are increasingly returning to work, operators can take this opportunity to reintroduce the micro market.

“We’ve talked to our operators about doing ‘welcome back’ rewards, or doing a re-grand opening,” Reilly said. “These professional efforts will provide the company with a touchpoint for their employees and show them that they care about their safety and are offering promotions to them.”

“A company’s micro market provides a natural touchpoint for employers to positively communicate and show they care,” Reilly said. “Offering a special ‘welcome back’ reward or doing a re-grand opening of their market can create a sense of connection while encouraging staff to stay safely onsite for snack and meals.”

Johnson reinforced how important a personal connection — from a safe distance — can be as micro markets reopen to customers.

“It doesn’t have to be this huge grand reopening, but just show up and sit there and talk to people,” Johnson said. “Remind people that this a business and there are humans behind it who care. That will get people warmed back up. Micro markets should come back stronger than ever because people don’t want to go to a public place when they can get what they want right there, in their office.”


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