OPERATION
PROFILE
New York-based U.S. Coffee employs 100 people.
especially in defense against these types of companies
adding coffee service. "We even hired an offce supply
sales specialist," said Shindler.
U.S Coffee currently offers 40,000 offce supply items
in its catalog, something Shindler wants to add to the company Website. The biggest hurdle is getting preferred products to show up before other products in a search, Shindler
explains. If a customer is searching for hot cups, Shindler
wants the company's OCS vendor cups to show up ahead
of the offce supply vendor hot cups, which cost him more.
"It's a matter of prioritizing the correct vendor," he added.
Internet offers B2C
Despite the challenges, the partners believe the Internet
will be the OCS battlefeld of the future. "It's becoming
less and less a [physical] territory business," said Shindler.
"It's certainly a different business than coffee service
was." Trapani agrees. "If you're not on the Internet…
you're falling behind."
Since U.S. Coffee has no prescheduled routes, locations
must submit their orders via phone, fax, or more recently,
the Internet. Trapani has seen more and more location managers using the Internet, especially among the millennials,
who rarely call to talk to a customer service representative.
Having several robust Websites allows the operation
to not only reach its OCS customers, but also sell directly
to the consumer.
U.S. Coffee commits a lot of marketing dollars to the
Websites' SEO (search engine optimization) and Google
AdWords. The company is also active on Facebook, Twitter and Pinterest. Once you start selling on the Internet
you are no longer an OCS operator. You are an Internet
retailer and that's a totally different game," said Shindler. It
requires different skills and a large monetary investment.
"Creating a Website is the easiest and cheapest part."
Meeting customer requests
U.S. Coffee has three vending routes, separate from its
OCS business. The vending business was added because
of OCS customer requests. However, despite being a relatively small part of their service, they have invested in a
lot of vending technology. The operation uses handhelds,
prekitting, credit card readers and the partners just added
vending management software to better analyze product
sales and track cash accountability.
While Shindler and Trapani recognize the value
in micro markets, they don't consider them a good ft
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VendingMarketWatch.com
September 2013