Creative vending opportunities
By Rose Simone
Technology is opening the door to new market opportunities like industrial and car wash vending
By Rose Simone
About 30 years ago, when Chuck Pifko got a job working for a Coca-Cola vending business straight out of college, he had no idea he would land in a high-tech business.
At the time, vending machines were straightforward mechanical gadgets. You popped the coins in the machine, and out came the chips, chocolate bars, soft drinks or coffee you desired. How could that ever change?
But Pifko, who bought Can-West Vending Distributors in Edmonton almost five years ago, has witnessed an amazing revolution, in the variety of products being dispensed, in how people pay for the products and in how the machines are managed.
The industry is merging with the high-tech world of cloud computing, the Internet-of-Things, smart card readers, smartphone payments and data management software. “All of that is available now,” Pifko says.
That, in turn, has expanded the horizon for new vending opportunities in specialty markets.
Vending machines that dispense industrial tool and safety equipment in large industries are a good example. Manufacturing facilities typically have tool cribs with managers who dispense the tools and supplies and keep everything organized. But now, more of these facilities are using vending machines that dispense industrial cutting tools and hand tools, lubricants and spare parts, as well as well as safety equipment such as glasses, aprons and gloves.
Unlike a snack machine, these machines are generally not operated for a profit, but they do save the manufacturers money.
“If it is a three-shift operation, for example, they may not have a tool crib that is open for the third shift. But this way, the workers can get their safety equipment without having to see someone at the tool desk,” Pifko says.
The main advantage is that the system tracks the supplies automatically. To get the item from the machine, the workers key in an employee number or swipe an employee ID card, “so they will know who got the supplies and they can control it,” Pifko says.
“It helps with the accounting as well, because it makes it easy to see which department or which job or which project gets billed for these items,” he adds.
Pifko says car washes are another example of an emerging specialty vending opportunity. Car wash facilities are increasingly installing vending machines that dispense things like shammies, air fresheners, upholstery cleaners and other car care accessories.
“If you want to get creative, you can vend just about anything, as long as it isn’t too big,” he says.
Today’s sophisticated vending machines have touch screens and card readers that make it easy to get the products using an ID card, credit card or debit card. There are even vending machines that accept Apple Pay and other smartphone pay systems, Pifko says. Moreover, the vending world is being transformed by wireless communication and cloud computing that makes automated communications, or telemetry, possible. Vending machines are becoming part of the Internet-of-Things network. They are equipped with sensors that can detect if the machine is low on certain products and send a message to the vending equipment operators in a remote location. It allows the operators to plan their plan their routes to repair or restock the machines much more efficiently, Pifko says.
“You can monitor all of your equipment from the computer on your desk, and now, as opposed to buying the software program to do that, you can access it in the cloud, as a web-based program.”
But Pifko says the speed at which new technology replaces the old depends on the economy.
“They can get very high-tech machines, but depending on what they are vending and what their profit margins are, they may not have the sales lift to justify spending money on these upgrades.” With the Canadian loonie being low and most of the products coming from the United States, those profit margins are much tighter, he adds.
He says that right now, western Canada is experiencing the fallout from the oil price bust: “When the building projects stopped in places like Fort McMurray and at the oil refinery camps, that slowed everything down.” Places that did fabrication, for example, have gone quiet, and that affects the vending business, he says.
Like many people in the vending industry, Pifko got into the business “almost by accident.” But it’s been an exciting ride in an industry that is constantly changing in ways no one could have imagined decades ago.
As the more interesting and high-tech machines are introduced, “that will make a difference in terms of the perceptions of the business,” he says.