News

Serving up new profits

April 13, 2005

Vending machines, when properly selected and maintained, can be one of the best uses a retailer can make of floor space.

Integrating the modern kiosk with the classic vending machine can take things to a whole new level of convenience and profitability. It also promises to improve the maintenance and refill processes, allow for comprehensive management and increase sales at the same time.

According to Dorn Beattie, president and chief executive officer of Canadian firm Solara Technologies, one of the chief strengths of the kiosk/vending machine marriage is the introduction of a cashless sale.

This story and all the great free content on Kiosk Marketplace is supported by: Solara Technologies

"Consumers are prepared to pay a premium in order to have the use of credit card operation," Beattie said. "If existing vending companies add our technology, they're into a cashless transaction."

Beattie said that turning a vending machine into a kiosk has a second benefit on top of the cashless sale: The introduction of a new revenue stream from on-screen advertising.

"POS advertising is something that advertisers will pay a significant number of dollars for," he said. "And it also provides product reinforcement."

When customers approach, they see the ad for a second or two, then touch the screen. The ad is paused, the customer makes a purchase, and the product is dispensed.

"At the moment the product is vended, the inventory control realizes that particular product is reduced by one item, and that the transaction has taken place," Beattie said.

"The machine thanks you for your patronage, and after a few seconds, the advertising will resume from the point where it was interrupted."

Remote management tools also make life easier for the operator. Beattie said that Solara's technology allows managers to log in from any Internet connection to check product and cash levels, download extensive management and sales reports, and issue refunds for bad transactions.

A tough sale?

Solara and others looking to merge the kiosk with the vending machine might have a tough road ahead of them - at least according to vending industry consultant David Murphy, who worked in vending for 33 years before becoming a consultant 12 years ago.

"I always feel that vending is almost a generation behind," said Ontario-based Murphy. "We want to make sure it's going to work first."

Murphy has mixed feelings about the potential for POS ad sales at vending machines. He thinks they'll do the best in places where people are forced to be dormant for long stretches of time, such as airports and train stations. But he thinks the kiosk screens could serve another role; he uses displays on his machines to promote the company offering the location, turning them into an added "foot in the door."

He said one customer, a marina, was absolutely thrilled to see their name and logo branded on the vending machine's display - making them all the more eager to place the machines.

"On my machines in schools, I use the displays to promote school teams and student functions," he said. "In a factory, I'd promote their social clubs or social events."