Automatic Merchandiser

MAY 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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be plenty of mistakes and reworking along the way. To manage it all successfully operators typically need at least one person to manage the project and extra technicians to handle installation and troubleshooting. Telemetry is not the "plug and play" experience that we get from our smartphones. Success is mainly driven by the commitment of everyone in the business. Sadly, telemetry is just one of the decisions facing a progressive operator: cashless, consumer programs, multimedia screens, nutritional solutions, video screen and micro markets all compete for time and attention. Each decision is just as complex and has a similar potential for success and disruption. It's easy to understand why many operators don't make any bold moves with technology. One project is more than enough for an operator to undertake while managing his or her business. Undertaking more than one is a challenge for all but the largest operators. The problem here is that customers expect us to do it all, and do it well. So 3. We can't invest because we're not proftable. I don't have to explain to any operator the proft challenges we face as an industry. We all know that subtract 1 percent net proft as an industry and a fat marketplace leaves little room for investment. Beyond that, we have suppliers trying to recoup an industry-specifc investment across a small user base (read high hardware and service costs). Topping off the perfect storm is fragmentation. With more than 7,000 operators and hundreds of different technologies fghting for a limited amount of capital and operator attention it's a wonder we've made it this far. The answer is a dose of reality and planning. Operators need to recognize an investment in connectivity is an investment in their business' future. Route effciency can drive 5 plus points to the bottom line, so it's not unreasonable to invest part of that savings in connectivity. For technology suppliers, that means to TELEMETRY is not the "plug and play" experience of a smartphone. we're seemingly left in a lose-lose situation: don't do it well or don't do it at all. To succeed, operators need to flter information, streamline decision making, manage implementation, obtain support and control costs. The reality is that no one operator can do it all, so one of the best options is a cooperative approach. An example of this is USConnect, a technology cooperative that takes all of the basic technology needs and bundles them into an affordable package for the operator. Innovative approaches like US Connect are part of Telemetry 2.0 because they help operators solve the challenges of implementation. 10 Automatic Merchandiser stop looking at their product as the solution, but components of a larger ecosystem. To be successful we need to fund everything (hardware, cashless, consumer programs, telemetry, VMS) and the solutions need to work together out of the box. Without both a cost effective and connected solution we'll fail to achieve the usage rates needed to spark the next generation of innovation. In the end, the answer is scale and commitment, either we make it work together or we continue to advance at a snail's pace. The other piece missing from almost every discussion is the consumer. How are we working to meet VendingMarketWatch.com May 2013 their current needs? While we were selling essentially the same product for 40 years the world changed. The idea of people walking around with a couple singles in their pocket waiting for a vending machine is a thing of the past. In a world of no cash, instant gratifcation and social feedback we might as well be selling typewriters door to door. Continuing to do nothing takes us further down the path to irrelevance. Operators have some of the most valuable retail possible with direct access to some 100 million employees, students and visitors every day. Our ability to develop a strong connection with the consumer is the key to unlocking new revenue. However we can never expect to get there unless we take the frst step with telemetry. Recap Telemetry 2.0 isn't a product or solution, it's a way of thinking and moving forward. After working with telemetry for a few years and looking at the data, it's obvious that there is more opportunity than we expected, but also major hurdles to moving the industry forward. Telemetry 2.0 is about working through the diffcult choices. It doesn't challenge the principles of dynamic routing and scheduling, but looks at how to ease implementation and improve results. This requires all of us to look at the most basic business decisions with a new lens and seek out products and solutions that can increase our relevance with consumers. ABOUT THE AUTHOR Jim English is the founder and CEO of Sprout Retail, which provides data and consumer services for the vending industry. He can be reached at jim.english@ sproutretail.com.

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