The changing landscape of vending: Opportunities for traditional vending players to change
The vending industry has been around for centuries, providing consumers with quick access to food, beverages, and other products. The first vending machine is believed to have dispensed holy water outside of temples in ancient Greece and the modern vending machines, as we know them today, date back to the 19th century. However, the world has changed significantly in recent years, and the vending industry needs to evolve to keep up. In this article, we will explore the challenges faced by traditional vending machines and the compelling reasons for change.
Challenges in the traditional vending industry and compelling reasons to change
1. Shifting consumer trends and needs
Today’s consumers expect more from their vending experience. They want a wider variety of products, healthier options, and more convenient payment methods. Traditional vending machines often fall short in meeting these needs, offering a limited selection of items and relying on cash or coin payments. A better consumer experience and aesthetically appealing cabinets can help attract new segments where traditional vending machines would not be the first choice. Example segments include for example high-profiled hotels and modern workplaces.
2. Assortment limitations
While consumers expect more from vending machines, in terms of the experience itself, but also from the assortment in them, the traditional vending machines have limitations in the types of products they can dispense due to their design. Products must fit into dispense slots and withstand falling down, leading to a static product selection. This constraint leaves customers with fewer options and may lead to lost sales. On the contrary, modern, intelligent, vending solutions allow greater flexibility in in terms of product shapes, materials, and value. In many of the modern machines, assortment can be easily changed with minimal effort.
3. Revenue challenges
Traditional vending machines frequently encounter revenue challenges stemming from restricted product offerings and outdated payment methods. With a more or less static assortment, their ability to optimize revenue per transaction is limited. Traditional vending machines average just one item per transaction, generating a modest revenue of 1.7 €/transaction. On the other hand, Selfly Store cabinets boast an average basket size of 1.4 items/transaction and a revenue of 5.09 €/transaction, demonstrating the growth potential when innovative solutions are embraced. Another key factor contributing to increased sales in Selfly Store cabinets is the enhanced customer experience. The visually appealing product displays and the ability to touch and feel items before purchasing them encourage customers to buy more. By adopting new technologies, modernizing their product range, and providing a better shopping experience, vending machine operators can access untapped revenue streams and ensure long-term profitability.
4. Efficiency and cost
In the vending industry, it is crucial to minimize waste, optimize inventory, and streamline replenishment processes to achieve better efficiency and cost savings. Traditional vending machines often fall short in these areas, as they lack the advanced capabilities offered by intelligent vending solutions. Modern systems like Selfly Store use data analytics, automated inventory management, and dynamic pricing to minimize waste and ensure the right products are always available. Additionally, the ability to remotely monitor stock levels and sales data allows operators to make informed decisions and plan replenishment more effectively. By embracing intelligent vending solutions, businesses can significantly improve their operational efficiency, reduce costs, and stay competitive in an ever-changing landscape.
Sustainability has become a significant concern for consumers and businesses alike. The vending industry must address environmental concerns, such as energy efficiency, waste reduction, and sustainable product offerings, to remain relevant. For example, monitoring expiry dates and adjusting pricing to minimize waste can contribute to a more sustainable vending operation. Moreover, having the flexibility to use sustainable packaging of different sizes, gives the opportunity to choose the most sustainable solution available. Without being tied by the size or weight of the product sold.
The vending industry must embrace change and adapt to the shifting landscape to remain relevant and profitable. By transitioning to intelligent vending solutions, operators can overcome the challenges faced by traditional vending machines and capitalize on the opportunities presented by evolving consumer needs and technological advancements.
Stay tuned for our next article in this series, where we will delve deeper into the benefits of intelligent vending solutions and their potential to revolutionize the vending industry.