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OPERATION PROFILE Micro markets take off for Trolley Before the merger, both Halloran and Calkins wanted to explore micro markets. They had each installed four Avanti Markets within a year and were seeing great success. Within two years of becoming Trolley House, they'd added 32 additional markets. "Micro markets allowed us to expand our products," said Calkins. Trolley House could offer customers 400 products in the markets. And many of the healthier items also did well in vending, if the price point wasn't too high. The partners found products like string cheese, rice chips and protein bars crossed over well. Markets increase food sales Food items sold well in micro markets. For Trolley House, food represents 30 percent of micro market sales, while only 2 to 3 percent in vending. "The huge increase in fresh food usage challenged us internally at first," said Halloran. Trolley House had to add large walk-in coolers, create refrigerated zones in the trucks and add systems and security to track food temperature. It does not operate its own commissary, instead buying food from a third-party. Every month, Trolley House continues to add micro markets. Ideal locations include 150 or more people who work for one company within a semi-secure area. Public locations don't work well and increase shrinkage. Trolley House management and staff work closely to keep operations running smoothly. Operation Profile: Trolley House Refreshments Owners: Scott Halloran and Michael Calkins Headquarters: Richmond, Va. Founded: 2011 Employees: 27 Routes: 11 Annual Sales: Not revealed OCS success For Trolley House, office coffee service increases each year. It offers a private label, Trolley Coffee and Tea, as well as single-cup brewers like Keurig and Tassimo. "They are both excellent," said Calkins who likes taking specialty drink brewers to tastings. "People get very excited. The majority of Trolley House OCS business is still fractional pack coffee, however, two to one, versus single cup. New location promotion Promoting a new micro market is important to success. "We always hold a grand opening the first day," said Calkins. Trolley House sets the stage with balloons, flyers, raffle prizes and edible samples. The grand opening allows Trolley House to teach location employees how to use the micro market kiosk and put money on their Avanti card. About 50 percent of employees use the market cards to pay instead of cash or credit. 14 Automatic Merchandiser While Trolley House recognizes that micro markets have a place in the successful vending business model, vending is still a strong opportunity. "Vending is never going away, so we're investing big in vending too," said Halloran. Vending management and prekitting It wasn't just micro market technology that helped Trolley House grow, but also vending management soft- VendingMarketWatch.com February 2013 ware and prekitting. Both Halloran and Calkins added Streamware VendMax software to their operations. It helped the two owners develop route efficiencies and save on labor. Halloran calculates the return on investment, with just those benefits, was 24 months. There are also other efficiencies that are harder to measure, such as the benefits and savings related to prekitting. Halloran started prekitting in 2009, while Calkins didn't start until the two operations merged into Trolley House. Prekitting had many benefits, including allowing Trolley House to customize products by location. A location could make special requests and have unique products, rather than what was available on the route driver's rolling warehouse. "It becomes the customer's machine," said Calkins. A year after the merger, Trolley House took its prekitting program to the next level by installing LightSpeed Automation, a pick-to-light system for the vending warehouse. "It was one of the easiest technology roll outs I've ever experienced," said Halloran about LightSpeed. Not only has LightSpeed allowed Trolley House to prekit products more quickly, but it created a centralized point where all the data is funneled. The Avanti and Streamware data both funnel into the LightSpeed system. "We even created a committee where the warehouse manager meets monthly with the vending manager and micro market manager to discuss issues," said Halloran. Issues might include bad data, shrinkage or slow