The Convergence Of Vending And Micro Markets: Hybrid Products Offer Streamlined Solutions For Operators

Micro markets continue to grow in popularity in the convenience services industry. As noted in our annual State of the Industry Report, the combined percentage of sales for micro markets and office coffee service (OCS)/pantry increased over the previous year, producing one-fourth of the industry’s $23.5 billion in revenue in 2018. As more operators are diversifying beyond vending and branching out into micro markets, OCS, pantry service and water delivery, suppliers are responding by providing innovative hybrid technologies to streamline operations, enhance monitoring capabilities and increase security. 

The survey results also showed that a growing number of operators — 40 percent, up from 26.7 percent in the previous year — reported that their smallest micro market locations served a client location of fewer than 50 people. New lower-cost hybrid technologies including tablet-based and mobile checkout systems have enabled operators to reap higher profits from these smaller locations, widening the prospective client base beyond medium- to large-sized companies. While theft remains one of the biggest challenges for micro markets, the introduction of locking coolers and other security measures allows operators to consider market locations that may have previously been considered high risk. 

For operators who are expanding and differentiating their offerings, an essential step to greater operational efficiency is moving all market segments under one software platform. While traditional vending management systems (VMS) were made for vending accounts, new systems are designed specifically with micro markets in mind to eliminate redundancy, provide better management of warehouse inventory and administrative functions, and allow drivers to service all delivery locations from one application on one device. 

Crane Merchandising Systems’ MarketConnect and Simplifi Mobile app

MarketConnect by Crane Merchandising Systems allows operators to use one device for data entry for vending and micro market accounts. MarketConnect has been available on handheld devices since 2017, and later this summer, Crane will offer the feature through their mobile app – Simplifi Mobile. The app is designed, as the name suggests, to simplify the day for drivers and technicians and to help operators to manage their businesses on the go. 

“Starting in August, the Simplifi Mobile app will work with micro markets and synchronize the data from those and from vending machines with the VMS,” explained Julia Fell, marketing communications manager at Crane. “This will allow operators to use one device and keep all SKUs in one system.” 

The Simplifi Mobile app drives higher sales and operational efficiencies with better data and allows drivers to reduce time spent servicing locations by 12 to 25 percent, improving productivity and customer service. The app provides real-time data and easy access to the operator’s network of devices, increasing connectivity. 

Erich Markee, president of LTD Refreshments Inc. in North Chelmsford, MA, currently uses MarketConnect to manage his rapidly growing company and will soon begin testing the Simplifi Mobile app as he extends beyond vending into micro markets. 

“Whether it be OCS, micro markets, vending or pantry service, my ideal solution would be one device for all channels in my business so I’m not bouncing back and forth between different platforms,” said Markee. “Using a mobile device that serves all of your channels of business is ideal for operators. A lot of us have multiple platforms because if we acquire somebody, we inherit it. For the medium to larger operators, that’s pretty common. So, one device for all solutions, that’s what we strive for.” 

Gimme VMS

Another solution that rolled out this summer is Gimme’s VMS, which launched July 28th. Cory Hewett, chief executive officer at Gimme, revealed that Gimme VMS is a mobile-first, fully cloud platform that can manage an entire operation including vending machines, micro markets, OCS, delivery and all back-end warehouse inventory management. 

“Our team has spent a long time with a diverse group of customers preparing Gimme VMS before it was officially announced. The world already had plenty of vending management systems, so we knew the only reason to build Gimme VMS is for it to be something truly different and more valuable to our customers than what they have today. Our mobile-first architecture and elastic cloud platform does just that,” Hewett explained. 

Evan Jarecki, chief customer officer at Gimme, continued, “Gimme VMS is the only mobile-first VMS out there. Most other vending management systems have some type of mobile companion app, but taking action still requires sitting at your desktop. We made it mobile-first because today’s business leaders expect to be able to take action on their business from the field or in the office. Gimme VMS is available on desktop too, from a browser, but building for mobile allows Gimme VMS to last the next 10, 15 or 20 years, and accommodates for new devices and technologies as they’re introduced.” 

Jarecki said the elastic cloud platform is highly secure and scalable, enabling instant report generation and real-time data transfer for all parts of the system. VMS updates will happen automatically, allowing operators to focus on other areas of their business. Jarecki noted this is especially valuable with security updates, as they can push these updates to customers almost immediately when necessary. Additionally, the VMS is easy to use, and quick to learn and even master.

“With our knowledge base and tutorial videos, there is no drawn-out training burden; this is something that can be used by anyone at the operation,” Jarecki added. 

USA Technologies’ Seed Markets™ 

USA Technologies’ Seed Markets, which completed its major partner integrations earlier this year, is a cloud-based, mobile-enabled platform that allows operators to optimize their micro market management and combine their vending and micro market routes into one. Seed Markets fully integrates with major micro market providers 365 Retail Markets, Yoke Payments, Avanti Markets, Company Kitchen, Three Square Market and Vendor’s Exchange. Adrian Austin, product marketing manager at USA Technologies, said that operators who already use Seed Pro, USAT’s vending and route optimization tool, will experience many of the same benefits in Seed Markets.

“One of the biggest benefits is that operators can now implement dynamic scheduling at their micro markets, which automatically creates optimized service routes for operators so they only service markets when they need to be serviced,” Austin explained. “They can avoid the common headaches that operators face with static scheduling, such as drivers showing up to locations that don’t need service, or locations that are already completely empty. Now they’re going where they need to go, and they know what to bring.”

Seed Markets allows operators to create schedules in one system, so operators can send one driver on one route to service vending machines and micro markets together, resulting in greater efficiency, fewer routes and less cost. Seed Markets also enables operators to integrate prekitting for vending and micro market accounts into the same list.

“[Our prekitting] is very accurate — I would say our prekitting accuracy is around 97 percent, so drivers are bringing far less products back to the warehouse when they complete a route,” Austin explained.

Seed Markets was built to treat each segment of a micro market like its own vending machine, for both prekitting and scheduling. In the prekitting process, each segment gets its own tote, and drivers are able to efficiently service each stop using the Seed Mobile app, an inventorying and servicing app that can be used across vending, micro market and OCS accounts.

“Service times can be really long for micro markets — it can traditionally take 30 to 60 minutes for a driver to restock and fully service a micro market location because there’s so many more things there than a vending machine,” he said. “If your cooler is full but your snack rack is nearly empty, we’re sending a driver out to look only at that snack rack. That’s unique to us; I don’t know of any other product that does that.” 

Yoke Payments’ tablet kiosk

Five years ago, Yoke co-founders Michael Johnson and Benjamin Thomas originally designed their tablet kiosk as an affordable, small-footprint solution that would allow operators to effectively and efficiently serve smaller locations. They launched an updated version in January, offering hardware upgrades — the VESA-certified unit can be easily mounted to any standard wall, tabletop or freestanding iPad stand that follows the same standard — but the major updates were on the software side. Customers can now create accounts to identify themselves at the kiosk and earn points through purchases, and they can manage their account through Yoke’s smartphone app, which offers full kiosk capabilities including purchasing.

“Customers can grab a product, scan the barcode right from the smartphone’s camera, add it to the cart, hit ‘buy now’ and never go to the kiosk,” Johnson explained. “If there’s a line at the kiosk, you don’t have somebody walk away. You can handle a 200- to 400-person lunch rush because everybody has the ability to put the kiosk in the palm of their hands.”

Johnson said that the Yoke point-of-sale easily integrates into operators’ back-office platforms, so operators don’t need to learn a new system. Another benefit to operators is scalability, especially for operators working with smaller micro market locations.

“We are one of the most affordable solutions out there, and with lower pricing you can buy more equipment, and you can scale faster,” he said. “Micro markets were originally designed for 500- to 1,000-person locations. Five years ago, there were a ton of those, but at this point, most of those locations have been approached. Where we see growth is from the endless sea of 200-person and less offices that still don’t know what a micro market is because nobody’s pitched them on it yet.”

Yoke’s software integrates with TriTeq locks, allowing operators to keep coolers and cabinets sealed until a customer makes a purchase on the kiosk or mobile app.

“When that is done on the dashboard, we account for every time a cooler door or cabinet has been unlocked, who unlocked it and the duration of time it was open,” Thomas explained. “So, now we have a time stamp of that transaction. We have an inventory tracking component so they can see if their sales match what the inventory is actually showing.” 

Express Market ™ and Flex Market® by ECRS 

ECRS offers two self-checkout kiosks: the Express Market, which is commercially available, and the Flex Market, which is currently in production and will be available for purchase later this summer. According to Felice Manget, micro market and campus systems executive for ECRS, both units run their CATAPULT® software, which offers perpetual inventory management, customer records, loyalty points and rewards, and remote enterprise-level business management.

“We offer versatile functionality across multiple use cases and touchpoints,” Manget said. “A company breakroom that offers both a 24/7 micro market and a corporate dining entity can use the same kiosk running the same software. It’s particularly useful in places like campus or university systems.”

Having one system that unifies those different segments streamlines business operations, especially for operators offering services beyond micro markets and vending machines, such as catering, corporate dining, delis or grills. For the end user, the kiosks are intuitive and easy to use.

“A customer can walk up to an ECRS Express Market or Flex Market and can either scan and go, use biometrics to check out with the tap of a finger, or create a customized sandwich, coffee or pizza — all at the same kiosks,” she said.

Both the Express Market and Flex Market come with walkaway detection, timeout functionality, and video cameras in the screens, powered by network video recording (NVR) wired or wireless IP cameras. Manget said that the Express Market is ideal for quick transactions as it is configured for scan-and-go scenarios, while the Flex Market has a slightly bigger footprint. The Flex is available as a tabletop, wall-mounted or freestanding kiosk and can come assembled with as little as a scanner and an encrypted payment unit, or as much as a bill acceptor, biometrics, proximity reader and receipt printer, depending on the operator’s needs.

“We also have 297 reports that come out of the box with our software, which enables operators to drill down to times and places at kiosks to determine if and when transactions may have gone awry,” she continued. “In addition to those security measures, our back-office inventory management helps minimize shrink, and biometrics help ensure customer identification.” 

Norm Technologies’ locking cooler by Three Square Market

Last year, Three Square Market became a vested partner in a cooler and freezer manufacturing company located overseas, leading them to start Norm Technologies. They commercially  launched the first Norm Tech cooler in the first quarter of 2019 and showcased this new line of micro market coolers at The NAMA Show earlier this year.

“There’s a standard cooler that’s been a staple of our industry: the 26-inch-wide, single-door cooler that everybody has bought for some time,” explained Patrick McMullan, co-founder and president of Three Square Market. “Our cooler has a similar compressor, warranty, square footage — the works. The difference is, we developed our own smart lock.” 

The cooler is equipped with the mobile-friendly, wifi-capable SmartLock Health Timer, which can lock the cooler if it’s left open or if the compressor fails. During busy times when doors are repeatedly opened and closed, operators can program the lock to control the temperature and keep items colder. At night, a standard cooler temperature is maintained. 

Another unique feature is the size, created specifically with micro markets in mind. 

“We introduced a model at NAMA that is a 34-inch-wide, micro market specific cooler that holds between 60 and 170 additional units, depending on what products you’re putting in there,” he said. “You’re never going to run out of your bestselling products. If you have a cooler that can hold more units, you don’t have to visit it as often. So, more of your bestsellers, less trips, more profit — that’s just better margins and a healthier company.” 

McMullan said operators can choose to keep the cooler locked at all times in high-theft areas, and that end users can easily unlock the cooler by identifying themselves by a thumbprint, a key fob or an account code through the market’s kiosk or mobile app. The coolers integrate with other brands of kiosks, making the cooler a seamless addition to a market. 

“You don’t have to be a Three Square client to buy our coolers,” McMullan said. “I welcome the chance to have our lock integrate with our competing kiosk systems.” 

Avanti Markets' Smart N Go

Avanti Markets’ Smart N Go, released in late 2018, is a modern, modular format that can be customized to fit almost any location, particularly public ones that are vulnerable to theft. The Smart N Go features locked, refrigerated and non-refrigerated modules displaying beverages, snacks, microwavable items, sandwiches, salads and freshly brewed coffee and tea. 

Each module has two cameras — a hidden camera that is always running and a second camera that activates when a customer initiates a purchase, which notifies the customer that they are being monitored.

Joel Berman, head of sales and customer success at Avanti and president of the Smart N Go division, said that this product is designed to overcome the limitations of vending while providing consumers with a high-tech yet welcoming shopping experience.

“Unlike traditional vending machines, customers can actually open the door and touch products or read labels,” Berman explained. “Leveraging infrared sensing technology, the Smart N Go system recognizes in real-time the products that a customer removes from a shelf and automatically adds those items to their shopping cart.”

Berman said that they’ve been placing the Smart N Go modules in hospitals, colleges, multitenant buildings, hotels, airports and car dealerships among other locations. He added that the customer experience is intuitive, fast and easy: A customer approaches the module and swipes their payment (credit, debit, member/mobile account or fingerprint) to preauthorize access.

“After a second or two, the lights brighten, a camera display comes on in the upper right corner of the module, and the customer can open the door and take out what they want,” he said. “If they pick up an item and decide they don’t want it, they can put it back and it will be removed from their cart. When done selecting items, they can simply shut the door and walk away. Upon shutting the door, the lights will dim and the door will lock.”

The Smart N Go is fully integrated with the Avanti Markets Software (AMS) platform, allowing operators to manage their Smart N Go with the same back-end tools and reporting they use to run their micro markets, including inventory management, dashboard and planogramming, account profitability and sales activity. 

365 PicoMarket

365 Retail Markets previewed its solution for public, high-shrink areas with its 365 PicoMarket at The NAMA Show in 2019. The PicoMarket is mounted on the outside of a locked cooler, and consumers either swipe a credit card or scan their Global Market Account (365’s stored value account) ID to gain access to the cooler. They select their item, scan it on the PicoMarket device and hit the pay button. 

Ryan McWhirter, 365’s director of product, noted the unique features of the PicoMarket. 

“There are a lot of cashless bezels out there that only use ‘swipe-and-tap,’” he explained. “The Pico does that as well, but it also adds EMV chip insert support and the ability to accept PIN-based debit cards, which I think is the first to the market in the vending context.”

Krishna Vedula, 365’s chief technology officer, added that the PicoMarket streamlines the market’s operations as part of 365’s Connected Campus.

“It’s smaller than a micro market and bigger than a vending bezel, but brings all the same advantages, such as a common back end,” Vedula said. “From an operator’s perspective, they don’t have to go to different websites to manage their devices. They use our portal that they’re really familiar with and monitor the devices in real time.”

McWhirter said the PicoMarket will be familiar to consumers because it looks like the 365 NanoMarket(TM) tablet. The PicoMarket has a large screen but is compact, and is an ideal solution for smaller markets, especially ones at risk of theft.

“It makes the footprint that the operator needs from the client a lot smaller, so there’s a lot of excitement around being able to put a cooler with a PicoMarket right on the front of the glass,” he said. “What probably makes it the most unique from standard vending bezels is that it has a webcam in front of it. We haven’t lost any loss-prevention tools as a result of making the device so small.”

The PicoMarket will be commercially available in late 2019 and is a complement to the recently launched 365Pay app, which enables consumers to manage their accounts, loyalty points and even promotional offers.

“When you walk into a location that has a PicoMarket and you have the app, it automatically integrates into it,” Vedula explained. “So, if you have a promotion you want to run in your market on a product, you can run it on the micro market screen, on the kiosk, on the PicoMarket, and/or send something directly to the consumer on their phone.”