News

Vending continues its evolution

November 1, 2005

Vending machines aren't often hailed by consumers as being the most customer-friendly devices. In fact, they've probably received more than their share of kicks. Sure, they're typically located in all the right places, but if the customer doesn't have enough change and the bill acceptor is malfunctioning - again - then the customer ends up annoyed and the vending operator loses a sale.

Fortunately, that scenario is being played out less frequently as more vending machines incorporate kiosk capabilities and technology. Advancements in the industry - such as cashless vending, multiproduct vending and multilingual capability - promise to satisfy customers and improve operators' bottom line.

Dorn Beattie, president and chief executive officer of kiosk vending manufacturer and application service provider Solara Technologies, said customers navigate the Internet-managed systems much as they do e-commerce Web sites. They no longer have to go through a series of transactions to select more than one product.

As customers select their products, they are added to a virtual shopping cart. The software keeps a running tally and displays on the ordering touchscreen how much is being spent. When the selections are made, the customer can pay for all of his items at once with cash or a debit or credit card. The cashless vending option also entices customers to buy more because they are no longer limited to the cash they have in their pocket, said Beattie.

But perhaps the best feature of all is that products vend in sequence so that the heaviest item comes out first.

Dealing with shrinking profits

For operators who are hesitant to move toward cashless vending because of transaction fees, the shopping cart feature is another way for them to keep the price point down, said Matthew Kalthoff, founder and director of Telemetreat, a Kalthoff Group company. "With the shopping cart, you can make it one transaction, which will cut credit card transaction and processing fees," he said.

The multiproduct option also helps operators move products by allowing them to remotely program special promotions and change prices. To facilitate vending operators' efforts to move less popular items, the system allows an operator to bundle items. For example, one promo might include a less-popular product in conjunction with a more desirable one. Or, a different promo might offer a discount when a customer purchases a certain number of items.

In addition to supporting cashless and multiproduct vending, Solara's application package also supports multilingual instructions. Customers can choose their preferred language when they first approach the machine, which allows operators to reach new markets. According to Beattie, the focus is currently on English and Spanish, but he expects Solara's system to be able to support any language for which there is a translation program available.

"Non-English speakers are a strong market for the vending industry. Because of the communication barrier, many look for ways to purchase goods without having to interact with a salesperson, and a vending machine allows them that option," said Kalthoff.

This article appeared in theRetail Kiosk & Self-Service Executive Summary, Fall 2005.