Automatic Merchandiser

JUN-JUL 2016

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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CHART 10A: TECHNOLOGY UPGRADES, 2-YEAR COMPARISON % of machines equipped with the following: 2014 2015 Credit/debit card & mobile payment readers & telemetry 11% 15% Mobile-ONLY (no credit or debit cards) payment n/a <1% Video screens n/a <1% QR codes for mobile app n/a <1% CHART 10C: HOW WOULD YOU RATE THE FOLLOWING TECHNOLOGY ON A SCALE OF 1 (I DON'T REALLY LIKE IT OR USE IT) TO 5 (GREAT INVESTMENT - ROI) CHART 10B: DO YOU UTILIZE A VENDING MANAGEMENT SYSTEM OR VMS? ● No ● Yes 46% 54% 2015 QR code on machine Cashless payment Warehouse pick to light system LED lights Video screens Remote monitoring Prekitting Vending Management System 3.1 2.9 2.8 2.0 3.3 2.3 3.6 2.0 Total machine base estimates: 4,518,000 for 2015 reported increased revenues in 2015, the percentage rose to 62.6 percent. For operators that reported a decrease in their revenue for 2015, only 32.1 per- cent used a VMS. Using a system to manage vending data seems to help operators stay in the black. Many commented on technology innova- tions saying "it helped me learn my business better and grow our overall sales within locations" as well as "it has been a huge positive." Those opera- tors embracing VMS are also looking at other systems such as business intel- ligence software, e-commerce, ware- house picking solutions, customer relation management (CRM) tools and more, suggesting a more modern, innovative future for automated retail. Boost in cashless vending The number of vending machines that accept credit and debit cards has hit 15 percent, the highest on record (see chart 10). Not just the percentage, but the actual number of cashless readers has also increased, because in 2015 the approximate number of vending machines dropped to 4.5 million, down from around 5 million, pre- dominantly to the addition of micro markets. Operators adding cashless payment acceptance tend to comment that it has produced a sales lift. It ben- efts the operators' bottom line, but also increases customer satisfaction. Many operators use two-tier pric- ing now that it is available, to cover the fees charged for taking credit cards. Despite this movement towards a more cashless vending experience, the majority of vending machines still only accept cash or coins — a statistic that puts the vending industry at a disadvantage compared to its com- petitors for the consumer snack and daytime meal dollar. While there has been conficting information about how the Europay, MasterCard and Visa (EMV) or chip cards will affect vending, this is not a top critical issue for operators, who are working with processors to man- age any fees they have experienced. Micro markets change the landscape At an all-time high were operators reporting micro markets as the pri- mary driver of their positive bottom lines. Yet, the percentage of opera- tors that offer micro markets is less than 50 percent (see Micro Market Breakout). Roughly a third of micro market operators have 50 micro market locations, or less. The aver- age is 13, although that number is misleading. Operators usually try a couple markets, and if the concept works for them, jump into the seg- ment quickly, placing micro markets MICRO MARKETS was again THE new service to try in 2015. 1 2 3 4 5 June/July 2016 VendingMarketWatch.com Automatic Merchandiser 27 STATE OF THE INDUSTRY

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