Current challenges in vending operations
Vending operations face myriad challenges that can have an impact on profitability and customer satisfaction. Key among these are stock management, expiry tracking and the environmental impact of waste. Efficiently managing inventory is crucial as it prevents overstocking and understocking, both of which can lead to lost sales and dissatisfied customers. Additionally, keeping track of product expiry dates is essential to maintain product freshness, reduce waste and ensure customer safety.
The environmental impact of waste is a significant challenge. Unsold items, especially perishables, contribute to environmental degradation when not managed properly. Furthermore, the failure to adapt to consumer preferences in real time can result in a mismatch between offered products and actual consumer demand, exacerbating the potential for waste.
Technological solutions
To address these challenges, a variety of technological solutions have been developed, leveraging advancements such as RFID technology and AI-powered predictive analytics. RFID tags on products enable accurate real-time inventory tracking, making it easier for operators to know exactly what is in stock and what needs replenishing. This technology also aids in managing expiry dates more efficiently by alerting operators to products that need to be sold soon or removed from the machine or simply automating discounting processes of soon to be expired products.
AI and machine learning go a step further by analyzing sales data to predict future buying patterns and preferences. The data used can be enhanced with other data sources, like similar vending machines operated by others or with weather and traffic data. This allows vending operators to tailor their product offerings to meet anticipated demand, reducing the likelihood of unsold stock and minimizing waste. Additionally, these technologies can optimize the restocking process, ensuring machines are filled in a way that matches the ebb and flow of consumer purchasing behavior, thereby enhancing overall operational efficiency.
Case study: A Nordic hospital reduced food waste by 70% thanks to smart vending
Östersund’s Hospital, located in the north of Sweden, provides an exemplary case of how smart vending solutions can transform food service operations. The hospital initially deployed six smart vending machines as a pilot project to enhance food accessibility for patients, staff and visitors at the hospital. This trial was a success, attracting over 1,367 unique users and facilitating more than 6,000 transactions within six months, prompting an expansion to 12 fridges right after the pilot.
Strategically placed across the hospital, including high-traffic areas like the central surgical unit and the café, and the lobby, these fridges offered convenient access to fresh food around the clock. The introduction of the “Surgical Unit Friday Breakfast” and the “Save the Planet” fridge, which sold items nearing expiry at a discount, demonstrated innovative ways to promote sustainability. Notably, the hospital was able to reduce its food waste by 60%-70%, demonstrating a significant environmental and economic benefit.
The accomplishment of these fridges was not just in their ability to reduce waste, but they also catered effectively to the diverse needs of the hospital's community. By analyzing sales data and customer feedback, the product offerings were refined, focusing on popular and nutritious options that met the specific preferences of hospital staff and visitors. This targeted approach helped in maintaining high customer satisfaction and further reducing waste, as the products stocked were those known to be in demand.
Case study: Smart fridges enhance food services at a Nordic airport restaurant
Name Company, a visionary catering service operating at Helsinki-Vantaa Airport in the Finnish capital area, exemplifies the successful integration of smart vending solutions to address food service challenges. With over 15 years of experience in airport catering, Name Company faced decreased demand and rising labor costs due to the COVID-19 pandemic. Traditional vending solutions were inadequate due to their inability to offer fresh food options, which are crucial for Name Company’s commitment to quality.
Adopting smart fridges and freezers allowed Name Company to offer a wider range of fresh and frozen food options around the clock, catering to the varied schedules of airport employees. The strategic placement of two fridges and one freezer per location enabled them to provide breakfast items, ready-to-eat meals and frozen foods. This setup not only catered to diverse dietary preferences but also significantly optimized operational efficiency.
One of the most impactful outcomes of implementing these smart vending solutions was the dramatic reduction in food waste. By leveraging the smart vending solution analytics system, Name Company was able to manage inventory with precision, applying automatic discount rules based on expiry dates. This approach reduced their waste to just 3% in vending operations, compared to 15%-20% typically experienced in their traditional restaurants.
Conclusion
The integration of smart technologies like RFID and AI in vending operations offers substantial benefits, including enhanced operational efficiency, reduced costs and improved customer satisfaction. The case studies of Östersund’s Hospital and Name Company illustrate how these technologies can transform vending services, making them more responsive to consumer needs and environmentally sustainable. Vending operators looking to improve their services and operational effectiveness should consider how such technologies could be integrated into their operations. As demonstrated, the benefits extend beyond simple convenience to deliver significant business improvements and customer benefits.
ABOUT THE AUTHOR
Malin Östman, chief marketing officer at Selfly Store, champions the modernization of the vending industry, promoting the advantages of smart vending solutions. Her innovative digital marketing strategies catalyze the adoption of intelligent systems, positioning Selfly Store as a leader in innovation. Östman has been recognized by Automatic Merchandiser as a 40 Under 40 award winner and a Most Influential Women in Convenience Services Award winner in 2023, as a key influencer in the field.
