From the Editor: May 2007
Has to be retail
By Cam Wood
Retail. It’s been a dirty word to our industry for a long time. It
implies aisles and aisles of overstocked merchandise, the juggernaut
that draws out our hard-won clientele with flashy, splashy
point-of-purchase marketing and vest-wearing cheery door-greeters.
Retail. It’s been a dirty word to our industry for a long time. It implies aisles and aisles of overstocked merchandise, the juggernaut that draws out our hard-won clientele with flashy, splashy point-of-purchase marketing and vest-wearing cheery door-greeters.
Massive footprints, with some equalling the equivalent of 12,000 vending machines stood side by side, have permeated their way into our economic psyche. If it’s that big, there must be a lot of choice.
For a number of good reasons, the vending industry has always tried to distinguish itself as something other than a retail business. With only 18 feet of available shelf space, our business was not “retail.” Our business was not to overwhelm the consumer with selection, but rather appeal to their impulsive need for something to eat or drink.
Operators prided themselves on service models that were unique, and dedicated themselves to a more convenient delivery method than many alternatives. Vending was there: onsite, clean, and operational.
That was then … the so-called “good ol’days” when the coinbox was full and “healthy” meant that guy in shipping with bulging biceps and a penchant for posing in front of anything reflective.
With a dramatic shift in consumer perceptions, needs and product demands, the
time has truly come for the vending industry – and operators more specifically – to consider themselves retailers.
The competition isn’t just the C-store anymore. The competition is the changing North American lifestyle and “healthy” is now the responsibility of the human resources department.
Vending’s primary business is selling products, plain and simple. The business only survives when the consumer walks up to the machine, puts the dollar in and selects the product they want – a basic financial transaction that bears very little difference from a similar transaction in a retail environment.
Where the difference occurs is in the comparison between traditional retail and vending’s most valuable asset – shelf space.
The retailer with over 210,000 feet of shelf space requires a huge footprint, likely in a developing geographic area, in order for the financial transaction to succeed.
Then they must find a way to draw the consumer out to their location and make that transaction happen.
In vending, we’re smarter. We can take our shelf space to where the consumer already is. Like that big box retailer, we only get our money from product sales.
In order to make this paradigm shift, vending operators must now focus on what products generate that transaction, and exploit the profitable offerings – and unleash the dogs that continue to occupy precious shelf space.
Over the next few issues we’re going to explore category management, the proven model of product retailing, and how and why it needs to be the new model for the vending industry.
Today’s consumer isn’t going to make a transaction with your machine because of the service you give your location (yes, that helps maintain the location agreement), but rather because your machine offers the product they are seeking. It’s the exact same motivation that prompts them to get into their car and drive to that retailer out on the edge of the city with 216,000 feet of shelf space.