What is at the intersection of a micro market and a vending machine?

Micro markets are to vending as the Cloud is to small business – useful and exciting, but not for everyone. There are some locations that make sense for a micro market and are very profitable. There are other locations whose needs are better met with vending machines. However, for every operator, there are locations that don’t quite match the standard; the locations whose needs are just a little different. For these types of clients the operator must find a different solution – something that is at the intersection of a micro market and a vending machine.

Make it a hybrid

One innovative way to get micro market benefits such as multi-purchase transactions, advertising revenue from a video screen and the consumer engagement of touch is to convert your existing vending machine to a micro market hybrid. Vendors Exchange revealed such a system at the 2014 NAMA OneShow, the DISCOVER™. Still being developed as a prototype, Stephanie Begley, director of marketing at Veii indicates the system will be ready in 2015 with improved features. “This system is designed to bridge the gap between a vending machine and a micro market,” said Begley. “It will incorporate many new features likes pagination and swipe technology.” Begley explains the DISCOVER product is being designed to accommodate large offices that are still too small for a full micro market system (75 to 150 employees). The touchscreen is placed on the snack machine door and incorporates a scanner and preset options for items in a nearby cooler, open shelf or pastry case. “It is a truly innovative way to combine the vending space with the micro market space,” added Begley. 

Locked coolers

In a micro market, fresh food is a top-selling category. Part of the attraction is that food can be packaged in containers that better showcase the product, without having to fit in a vending machine food carousel. The other driver is that consumers can read the food label and examine the item prior to purchase – a benefit in the micro market over the vending machine. However, a micro market requires a greater level of security and trust than a vending machine as items are not behind a locked door requiring payment. How can we get the benefits from both? A locked cooler, which allows for alternative packaging, pre-purchase exanimation and ensuring the operator gets paid.

In 2012, ShelfX launched a locked cooler with attached RFID-enabled access and cashless payment acceptance. The system won a NAMA Innovation award two years in a row.

“The ShelfX ideal locations are what we call soft vending locations,” said Ran Margalit, ShelfX CEO.  Margalit explains that offices, hospitals and other workplaces would be examples of soft vending.

“With a micro market you have to trust people not to steal, or eat without paying,” explained Margalit. “The solution today is a camera, but it’s hard to know if product is missing. Especially because some theft is people taking product up near the kiosk and pretending to scan or scanning and then hitting cancel.” There are other times cameras might not be an option at a location such as if the union doesn’t allow it or the employer has a policy against it. To ensure security while still offering the availability of fresh food, ShelfX uses a NFC cashless payment reader and pressure plates inside the cooler. The end user scans their NFC enabled credit or ShelfX card, which unlocks the cooler. The consumer can then pick up, examine, select or put back the item. The pressure plate registers if a product was removed or replaced. Once the door is closed, whatever item is removed is charged to the account.

“It can be a dry goods cabinet, cooler or freezer,” said Margalit. In fact, the company is testing a micro market concept where consumers uses their Xcard to access a locked room with open shelves and glass coolers. Consumers wave their Xcard in front of the shelf or cooler before taking an item. Once the item is taken, they can wave their Xcard again to close the transaction. If an item is removed without holding the Xcard first, a loud buzzer is activated.

“The ShelfX system allows you to vend anything and the consumer experience is superior,” said Margalit. No moving parts mean a lower service cost than vending and the system costs less than most micro market kiosks, adds Margalit.

An additional feature of ShelfX is the display which shows the cost of an item the consumer has removed. “It can alert the consumer that the product has ingredients he or she has said they are allergic to,” explains Margalit. Also, in schools, parents can review their student’s buying history and replenish the card account.

Selling 24/7

A relative newcomer to the industry, Pantry Labs, has brought an innovative locked cooler solution best suited to niche sites that also offer foodservice. “It is a way for foodservice to sell food even after the cafeteria or canteen has closed,” said Alex Yancher, co-founder of Pantry Labs Inc. Once the foodservice operation has closed, unsold food is wrapped, tagged with an RFID label and placed in the pantry lab cooler. The Pantry Labs system requires the end user to swipe a credit card or authorized ID card to unlock the cooler. The user can examine food items and make a selection by just taking the item out of the cooler. Once the item is removed and door closed, the RFID label on the food item is recognized as missing so the customer gets charged. “It is ideally suited for locations like hospitals, campuses and airports that have people around 24/7,” indicated Yancher.

Anything goes

One of the opportunities a micro market presents is to offer products without size restrictions. This is something difficult to match in a vending machine, but not impossible. The Fastcorp machine uses a robotic vacuum system to lift and dispense products. This means the same vending machine that dispenses ice cream bars and frozen meals, can be made to distribute anything. “With our robotic and vacuum platform, it is by far the most versatile automatic retailer,” said Brian Weinstein, president and new owner of Fastcorp Vending, LLC. The machine can dispense delicate salads that should not be shaken or glass jars of fruit that need to be gently lowered, explains Weinstein. “It can really expand what the operator can sell as far as healthy food, yet retain the benefits of a vending machine,” he said. Fastcorp is also working on a new version of its machine that includes a touchscreen with a barcode reader that will allow for cashless payment at the machine. “There have been a number of orders for that machine already based on the prototype,” said Weinstein.

While the addition of the robotic and vacuum system make the machine slightly more expensive than a typical ambient machine, because of the way the machine stacks products, the capacity is quite a bit higher than vending. It’s ideal for a location that needs high capacity, without lots of variety.

“In addition, as our parent company is a metal fabricator. We can provide something quite customized using our platform,” said Weinstein. “It’s all in-house manufacturing.”

 A bigger box

Sometimes what’s needed isn’t to think outside the box, but to make the box bigger. That is what Shop24 does, takes the idea of a vending machine, but makes it bigger to incorporate various goods. “We focus on the college and university marketplace as well as transportation hubs, and carry up to 200 SKUs in a Shop24,” said Matt McGovern, CEO of Shop24 Global LLC. The stores are outside, in areas that are typically amenity deficient, and focus on the needs of the target consumer. For example, near new student housing a Shop24 might include charging stations on the sides of the store for phones, tablets, laptops, etc. Inside the machine there will be over-the-counter drugs, fast food items, fresh sandwiches, milk, full size-cereal boxes, toiletries, beverages and larger size-snacks. “We also wrap the store in vinyl that will match the surrounding architecture, or on a campus we will wrap to match the school’s branding,” said McGovern. Shop24 current owns and operates its store and monitors them remotely.

In the end, different locations require different solutions. Being the operator to properly asses a new location or how a current location could see benefits of a micro market/vending machine hybrid. This type of solution could be just the technology to draw attention and generate consumer engagement while also driving profits.