Automatic Merchandiser

FEB 2013

Automatic Merchandiser serves the business management, marketing, technology and product information needs of its readers including vending operators, coffee service operators, product brokers, and product and equipment distributors in print.

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INDUSTRY 1. Healthy Choices Long thought of as machines that only dispense cookies, candy, chips and sugary beverages, vending machines are including a wider variety of product selections following a change in consumer snacking preferences. Global research company, Hartman Group, recently released a snacking report that said 57 percent of Americans rated having healthy snack options as important or very important. Another 2012 research report, by Symphony IRI Group, shows 87 percent of consumers are trying to eat healthier. Many operators have already jumped on the bandwagon of providing healthy options, but in order to stay ahead of the game, the industry as a whole must show it is nutritionally responsible. "As an industry, we have to take a very proactive role in showing that we are a part of the solution, instead of a 'devil' that only offers unhealthy options, especially in special markets such as schools and health care facilities," said Balakgie. "If we show that we are part of the solution and not the problem, various public and political administrators will see us as an active partner, and will be more likely to support a blended set of offerings that provide consumers what they want, including healthy options." Of course there will always be those consumers who would like to purchase a traditional snack, such as chips or a candy bar; however, more and more Americans are becoming health conscious. In order to increase sales, operators should offer a wide variety that includes both healthy and traditional options to ensure a sale every time. WE need to show we are part of the solution OUTLOOK 2. Cashless Vending For years, vending was a coin-operated industry; however, fewer and fewer people carry around cash or coins these days — especially the younger generation. "Cashless payment, enabled currently in less than 5 percent of all vending machines, will continue to grow as vending patron demographics shift," said Chuck Reed, director, marketing and sales operations support for MEI, a manufacturer of cashless technology. "Generation X and Y consumers are clearly predisposed to carrying less cash and they are demanding alternate payment methods on vending machines. Vending operators will need to accept any form of payment, cash or cashless, in order to compete with retail establishments." The 2012 Automatic Merchandiser State of the Vending Industry report showed there are less than 200,000 vending machines in the field that currently offer cashless as a payment option. Compare that to market research from Javelin Strategy & Research which reports that in 2011, only 27 percent of all point-of-sale purchases were made with cash and you see the problem. The number of cashless transactions is expected to drop to 23 percent by 2017, so the industry will need to make this payment technology a priority in 2013, in order stay competitive. Otherwise, what will keep a consumer with no cash from going somewhere else? While credit transaction fees may be a concern, payment solution providers are making this option more affordable. "Cashless payments must become the norm for vending to moving forward," said Anant Agrawal, co-founder and chief marketing officer of Cantaloupe Systems. "With increased pricing, and changing demographics, it's the only way to keep sales minimally at the same level as they are today. With two tier pricing [where consumers get a discount for paying with cash], the increased transaction costs can now be shared, making it more affordable." iStockphoto February 2013 VendingMarketWatch.com Automatic Merchandiser 9

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