Technology, government regulations change vending industry
From Beverage Industry
Smart technology, government mandates and consumer expectations are changing the face of the vending channel. Despite slow changes, the industry is making positive progress. The vending channel declined 12 percent during the 2009 recession, but only 1 percent in 2013.
Nick Yates, chairman and founder of San Diego-based Fresh Healthy, finds that overall the younger generation is more educated on the impact that sugary sodas have on obesity, and that the health market is the fastest growing channel. In addition, there has been an increase in companies focusing on the health of their employees, which also is affecting healthy vending options.
With this shift in products, vending companies are getting smarter about what to offer and where. More companies are testing what consumers are buying and not buying. In addition, they can figure out the likelihood that a consumer will buy product B if they buy product A.
This technology is driven in part by what millennial customers are used to having in their purchasing experience. They like the convenience of the shopping cart experience, which allows them to buy more at a time.
“Millennials are ideal consumers for refreshment services. We offer reliable, convenient, affordable snack and beverage options, all at the touch of a button,” Roni Moore, vice president, marketing and communications, National Automatic Merchandising Association, says. Millennials also prefer – and expect – cashless options. This consumer rarely carries cash and rarely goes anywhere without their smartphones. Additionally, they are the largest influencers in Apple Pay and Google Wallet payment options.
However, it’s important to note that cashless options aren’t completely taking over the way consumers pay. In fact, in 2014 the Federal Reserve Bank of San Francisco published a paper that showed a strong connection between the use of cash and low-value transactions; if the amount of the transaction is less than $20, the probability of the consumer using cash increases to 91 percent, according to the paper. “Consumer Preferences and the Use of Cash: Evidence from the Diary of Consumer Payments Choice.”