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Small footprint, large return

July 21, 2005

Floor space is one of a retailer's most precious commodities. As a retailer, you want products to deliver a strong revenue stream without requiring a lot of space. And while you're making a wish list, you might as well add that the product be virtually maintenance-free (or at least low maintenance).

Is that too much to hope for? Well, perhaps not with the transformation the tried-and-true vending machine is making as it incorporates today's kiosk capabilities.

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The convergence of vending and kiosk technologies plays to consumers' and machine owners' demand for convenience. The cashless aspect of the new vending machines is certainly one of its main attractions, and one that Dorn Beattie, president and chief executive officer of kiosk vending manufacturer Solara Technologies, believes consumers will pay a premium for the convenience of using.

Keith Ruschival, owner of Crestwood, Ky.-based Crestwood Vending, believes that the success of these premium machines will depend on location. High-traffic areas, such as airports or higher-priced hotels, would be obvious choices. According to Ruschival, "The location will have to justify the cost of investing in the new technology."

Two-in-one

The often-overlooked benefit of a vending kiosk is the additional revenue generated from advertising on its touchscreen display.

According to Beattie, for the same footprint, owners have added a revenue-producing opportunity. An ad runs continually on the screen, stopping only when a customer is making a purchase. Once the machine dispenses the item, the ad resumes. Often, owners can sell advertising to companies whose products they carry.

One

The out-of-product, out-of-business principle behind traditional vending is a thing of the past.

perceived drawback to adding traditional vending to a retail space is that owners wouldn't know if a product had sold out or if the machine wasn't working properly unless they visited the site. As those owners know, for every moment the machine sits idle, opportunities for revenue growth are lost.

The vending kiosks' PC-style system alleviates many of those concerns. Solara system's e-panel, for example, allows owners to check their machines by logging onto the Web. The software also can be programmed to send an e-mail alert to a pager if there's a problem.

The out-of-product, out-of-business principle behind traditional vending is a thing of the past. "Our system allows the owner of the machine absolute control of that machine," Beattie said.

Not only do you not have to worry about losing business, but you can also use the proprietary software to maximize your gains. Solara's e-panel allows the owner or management staff to change prices from a remote location.

The system allows a machine owner to track purchases, note which cards are being used, and even apply refunds to a customer's card. Improved efficiency translates to improved customer relations and return traffic.

If you already own traditional vending machines, you may be hesitant to consider a change because of the capital investment you've already made. The good news is that you don't have to junk your current machines and buy all new ones. Existing machines can be retrofitted with the technology that allows for cashless transactions.