Automatic Merchandiser

AUG 2015

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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Page 33 of 47

An additional driver of the micro market segment growth for Accent has been enhanced promotional and loyalty programs. "Our ability to give back, such as 'buy four get one free', as well as help our CPG partners get in front of the consumer has proven to be a success model, especially in a grey/blue collar manufacturing world," said Rosenberg. Besides customer-facing fea- tures, dedicated channel support for micro markets has been imperative. Rosenberg employs a micro market customer care team and has a dedi- cated IT department just for the micro markets side of the operation. He also has processes for integrat- ing the two different micro market operating systems, which can pres- ent a challenge especially when also incorporating a third system for the vending and OCS segments. "Get- ting to a point of integration with micro markets is the next hurdle," said Rosenberg. In the future, he hopes new technology will overcome employees needing to understand and operate within three systems. Despite any diffculties, Rosen- berg sees micro markets as a great opportunity. He fnds micro mar- kets at least double revenues versus traditional vending at a location. "Micro markets give you the ability to reinvent your existing footprint with fresh and better food, expanded variety in both beverage and snack and health and wellness across all categories. Consumer awareness and their desire to want to touch the product and understand what they are putting in their bodies is very relevant in today's shopper's mind," explained Rosenberg. Having receptive customers is very important to the success of micro markets. That is the reason why Accent assesses each potential micro market location carefully and has a set of qualifcations. "We try to target $40,000 in minimum sales," said Rosenberg about new micro market installations, "Whether that's 100 people or 300." Rosenberg's focus is on the employees, their access to other eating options and the location's hours of operation. With certain locations, Accent is willing to place a micro market with fewer people because experience has shown call centers, highly secure facilities and 24-hour locations usually produce a high rate of return on a micro market. Even with the required minimum revenue, Rosenberg doesn't believe the industry is close to saturating the micro market segment. "We are growing by 75 to 100 micro markets per year," he said. "[As a micro market operator,] we are truly merchandising like a retailer, not for a captive vending audience," said Rosenberg. Items sell for higher prices because of the variety and Accent's ability to meet different day parts as well as the melt- ing pot of consumer needs whether that is portion-control items or non- carbonated beverages. Food sets Accent apart Accent recently decided to take con- trol of its own destiny by consolidat- ing food production under one roof for both micro markets and vending. Prior to that, distribution was too dif- fcult and using local catering compa- nies wasn't working. "We decided that we were going to take the time to invest in the pro- duction process of our foods by devel- oping quality control standards and improving the menu," said Rosen- berg. "It's probably one of the smart- est decisions we've made in the last few years." As of May 2014, Accent has been directly involved in producing its own fresh, premium food line. The operation employs an experienced food service operating partner who drives menu creation by following consumer trends. There is also an emphasis on consumer needs, such as gluten-free or vegetarian. Accent tries to tailor menu items based on the time of year as well. For instance, during Lent the company offered veg- etarian as well as grilled and fried fsh entrees on Fridays. "Our food is our lead," said Rosenberg. Coffee service on the rise On par with micro markets for one of Accent's most proftable segments is offce coffee service. "OCS is moving at the speed of light," said Rosenberg, who really enjoys this aspect of the operation. The "Starbucks Effect" Health & Wellness Employers Need Skin In the Game While Accent sees an increase in requests for products meeting health and wellness standards, success of those products relies on a focus from the employer regard- less whether the products are in micro markets, vending machines or delivered as part of pantry service. "When a company demands it, our message is 'We'd love to, but we have enough experience to know that if you don't sup- port it, then we'll be the one suffering on our P&Ls. If you monetize it for the employee, we see a difference in em- ployee purchasing pattern.'" Rosenberg fnds about 20 percent of clients who want to focus on health and wellness are willing to incentivize it by offsetting the cost of the prod- ucts to employees. "If a client doesn't get behind it, the needle doesn't move," admits Rosenberg. "Then it's very dif- fcult to maintain proftability on those accounts." 34 Automatic Merchandiser August 2015 O P E R A T I O N P R O F I L E

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