Canadian Vending

Features Business Operations
Dispensing Strategies

Think Like A Retailer


August 18, 2010
By Michelle Brisebois

Topics

The traditional vending sector has had a rough go of it lately. With
snack foods under fire, a declining industrial sector and competition
from non-traditional channels such as drug stores – something has to
give.

The traditional vending sector has had a rough go of it lately. With snack foods under fire, a declining industrial sector and competition from non-traditional channels such as drug stores – something has to give.

Fortunately, younger consumers may provide a glimmer of hope. A study published in 2008 by NCR Corporation reported that 86 per cent of North American consumers were more likely to do business with companies offering some sort of self-service. Many of the study participants said they had a more positive perception of a brand if it offered self-service technology.

This appears to be especially true of young shoppers. While younger consumers may offer us a life-line, the same old strategies probably won’t move the needle. Generation Next still wants a compelling shopping experience even if it is self-service. It’s time for vending to start thinking like a retailer.

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Draw them in:
The most successful retailers know how to merchandise their stores. Ikea shows their products assembled in attractive living areas that invite customers to imagine the furniture in their own homes.

Vending can leverage some of this same magic. Some machines are triggered to light up as a consumer approaches – what a welcome!

A high-end cosmetics company called U*tique has begun dispensing their products from beautifully displayed self-serve vending machines. As Compass 360 consulting reports “The machines aren’t simply stocked – they are “curated.” Merchandise in U*tique machines is arranged and lighted “like works of modern art in a series of dainty portals, evoking a neon honeycomb.”

Even if it’s simply arranging your products in attractive colour groups or upgrading the lighting – give some thought to how effectively your machines beckon the customer.

Increase awareness:
If you have a machine placed in a company, college or university; does your target market know it exists? Don’t assume that your machine is on every orientation tour given to new employees and students – turnover has been massive.

Retailers regularly use flyers and advertising to increase awareness. Why don’t you try it too? Advertise in the student paper. Tell them where your machine is and what products it sells. If you have a unit placed in a company – a simple computer generated sign posted on the coffee-room bulletin board will do wonders to remind people that your machine has the perfect solution to their 3 p.m. snack-attack.

Have a sale:
Every retailer knows that LTOs (limited time offers) are one of their most important weapons. Sales often become annual events which customers anticipate with glee. Most importantly, retailers trumpet the news of a sale: it’s a big deal.

Why don’t you give it a try? If a product can be off-priced for a week or so, post it in the coffee room, or on the student union board. Put signage right on the machine to highlight the sale for those machines that rely on transient foot traffic. If you can gather some Twitter followers – here’s where you can quickly announce a limited time offer and get it to those who are truly interested.

Location, location, location:
Every successful retailer knows that fishing where the fish are makes for a healthy bottom line. The great aspect of retail vending is its portability.

If a location isn’t performing to your expectations – pulling up stakes and heading to greener pastures is less complicated than closing a retail store. Maybe the better location is one rich with other vending machines because a hub of self-serve options will attract consumers who accept the channel? The more machines, the more accepted the channel.

Japan has one vending machine for about every 23 people (edinformatics.com). Japan’s dense population, low crime rate and comfort with technology have made it a success story for the vending sector.

Let them talk to you:
Customers like to provide feedback and the best retailers encourage them to do so. Whether it’s a website, Facebook page or voice mail account, having a means for people to request certain products or to even let you know if a machine is broken will mean a lot.

Even if you don’t invite customers to contact you; chatter about your machines or the products you carry would be a good thing to monitor. Make it a regular practice to “Googlestalk” yourself by typing in your company’s name, machine location or product offering into a search engine. You may discover that a simple tweak to a product offering or machine placement could escalate sales.

The younger generation is receptive to self-serve retailing but the key to its success lies in our ability to act like true retailers. As long as vending thinks of itself as simply a channel, it will continue to struggle.

Self-serve retailing should offer an experience just like any other retail space. If you’re not ready to invest in the technology to elevate the delivery, then in the meantime kick it up old school. A little retail discipline can go a long way.