The latest news about Vendon, industry trends, and practical advice to grow your business
Life for vending operators has become a lot more dynamic than it used to be.
First, the pandemic disrupted the flow of operations. Now, upward-trending price fluctuations for products and gas are keeping vending businesses on their toes. And all of this comes at a time when customer preferences are rapidly evolving, whilst new competition in unattended retail, such as cashier-less stores, is shaking up the status quo.
Accordingly, you'll have a hard time competing, let alone thriving, if you're still
On the flip side, the evolution of unattended retail has unlocked new customer segments, optimization avenues, and business opportunities. You too can take advantage of these trends and grow your business proactively, rather than keep it afloat reactively.
In the current landscape, success depends on how you respond to growing costs and adapt to changing customer preferences quickly and efficiently. To do so, telemetry is a must, as it drastically improves a vendor's ability to optimize their operations across the board.
Let's look at how.
Vending is a low-margin business model, which means minor price changes can have a major impact and makes the industry highly sensitive to price fluctuations. Here are three things any vendor should do to ensure their profits don't slip into the red.
1. Optimize machine visits
Between salary, gas, and vehicle depreciation, machine visits for restocking and maintenance are one of the costliest elements of the vending business. For example, having to return to the machine after realizing it needs not just a product restock, but encashment as well amounts to wasted time, labor, and (expensive) gas.
With Vendon's telemetry platform and Route Planning module, operators can minimize related expenses and optimize their business. Telemetry keeps operators in the know about the real-time stock, encashment, and technical status of their fleet, which makes it possible to operatively plan visits – at the right time and with the right products and tools.
Optimal routes can be easily plotted to avoid spending any more time on the road than is necessary. They can also be reused through templates, making efficient machine visit planning quick and painless.
2. Regularly review and update prices
In times of fluctuating product prices and rising costs, you need to keep a close eye on how this impacts your own margins. You cannot afford to sit back and let things play out – when product costs go up, so should your prices. Keep track of your costs and, for most machines, Vendon remote price change can be used to quickly adapt to the situation by remotely updating the pricing.
That said, it's a fine line to walk – higher prices might turn customers away, so keeping track of how they react is also important. You can track and compare customer buying habits in your Vendon Cloud, which allows you to experiment with various pricing methods and understand how they impact your bottom line.
In short, react to increasing costs by increasing prices, but do it smartly.
3. Eliminate machine downtime
Last, but by no means least, you need to hyperfocus on machine uptime and doubly so when it comes to peak hours. Maximizing your sales has never been more important and any downtime equates to lost income.
There's no magic key to ensuring your machines don't malfunction or don't suffer some damage from aggressive customers, so what you need to do is optimize your response time for machine maintenance.
Again, telemetry is essential. You can view the real-time technical status of your fleet on Vendon Cloud, as well as set up alerts for when a machine goes down to ensure you can respond operatively.
To recap, you can deal with increasing costs by minimizing operational costs, maintaining your profit margins, and ensuring your business is up and running at all times.
The reality is that you might do all of the above, but still see a drop in sales. On one hand, it might be due to price changes. On the other hand, it might be due to evolving preferences and changing expectations of customers.
Here's what to do.
1. Track customer behavior
In Vendon Cloud, you can track purchasing patterns and review sales reports to understand what are the current trends, what's hot right now, and what's on the way out.
For instance, during the pandemic, there was a noticeable spike in comfort food purchases. By observing customer behavior, you can identify causes for sales volume fluctuations and respond accordingly. People might be less inclined to buy a salad if they think the world is coming to an end.
Doing weekly reviews of sales data can allow you to jump in on a trend as it's happening, instead of discovering it after the fact and realizing it's too late to take advantage.
As mentioned earlier, you can also use telemetry to experiment with pricing and customer price sensitivity. Perhaps you can improve your margins and increase your profit without affecting sales volumes – experiment and see how people respond. You might realize that you could have been taking a larger profit all along.
2. Offer a frictionless & reliable shopping experience
We're advancing towards a cashless society in leaps and bounds. Contactless payments have shifted from a nice-to-have to a must-have. The vending industry – a traditionally cash-based one – needs to adapt, and those who do are reaping the benefits because the most optimized product selection won't mean a thing if your customer can't actually buy from you.
That's where Vendon Contactless Payments comes in. This simple, affordable plug-and-play solution allows you to transform your machines from cash-based antiques into modern solutions that anyone can use, regardless of whether they have coins in their pocket or not. Naturally, it connects with the Vendon ecosystem, meaning that it's all further enhanced by telemetry.
That said, one of the hottest opportunities for vendors right now revolves around the return-to-office movement. Employers seek to attract their teams back to the office and a common strategy is to expand in-office benefits, including access to snacks and coffee. Vending businesses can capitalize on this situation by offering those employers attractive closed-loop solutions that help them better manage and control their offerings.
For instance, the QuickPik loyalty platform enables employers to assign employees free or discounted products, monitor and limit consumption, as well as set up and modify benefits remotely. The employees, on the other hand, can enjoy a seamless vending experience by transacting using their phones.
3. Take advantage of global/seasonal trends
While tracking and responding to customer behavior is essential, it can leave you playing catch up with current trends. For some such trends, you can get ahead of the data.
Seasonality is a major one. For example, as spring turns to summer, healthier snacks are favored over heavier foods, and demand for cool beverages spikes. While this would likely be reflected in your sales reports, you can update your offerings ahead of time to preempt preference changes and maximize profit.
Similarly, global trends such as return to the office can reshape demand. For instance, if you swapped out fresh products for ones with longer shelf-life when office buildings were left vacant, it can now make sense to reintroduce certain meal offerings, as consumption rises.
The global landscape is changing rapidly, and, unless you and your business change with it, you run the risk of being left behind.
At the end of the day, it all boils down to optimizing your operations. To deliver what the customer wants, when they want it, letting them pay how they want, and doing it all at the lowest cost to you.
Start optimizing your vending business today and boost your revenue – get in touch with us at email@example.com or your local distributor.Back To All Posts