SNAXPO report: Get ready for a vending revolution

by Dan Malovany
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Just as e-commerce has transformed the way many consumers shop at brick-and-mortar retailers, V-Commerce may revolutionize the way people buy snacks from vending machines in the near future, according to Michael Kasavana, professor at Michigan State University’s School  of  Hospitality Business and endowed professor with the National Automatic Merchandising Association (NAMA).

No longer will consumers need to fumble in their pockets for loose change or dollar bills, and they won’t have to pay first and shop later. Vending has had it backwards, until now, Prof. Kasavana told attendees at the Snack Food Association's SNAXPO, held in Phoenix, AZ, in March.

Rather, the next generation of vending machines features video and smart phone-like technology that allows them to view advertisements or even touch a panel to check out a product’s nutritional information before purchasing them using debit cards, the Google wallet and other forms of convenient cashless transactions.

In addition to encouraging multiple product purchases at one time, these new machines leverage wireless technology and the Internet to help vending operators be more efficient. Software and microchip technology by Intel and other companies can be applied to improve profitability by tracking vending machine inventory to minimize shortages, streamline the restocking process and even ensure product freshness. To maximize sales, such software also can create a plan-o-gram to show operators which slot to select for their top-selling products. Wireless technology also can identify broken or malfunctioning vending machines and prompt them to send signals when they need to be serviced to maximize uptime.

Moreover, cameras on some vending machines may rely on facial recognition software to make general observations and anonymously identify the demographics about consumers at a specific vending machine and, on a more specific basis, how frequently that group using it. In some cases, machines can also reward frequent shoppers with discounts or potentially increase sales by offering a cents-off offer if the shopper selects a specific item within 30 seconds.

Overall, the new vending machines target a younger demographic, specifically Gen-Y users and Gen-X consumers who are more comfortable with such technology and would use vending more often if they provided a cashless alternative.

When will such technology be available? It is already, and Prof. Kasavana expects that 2012 may be a breakout year for rolling out such systems across
the nation.

For more on SNAXPO, visit www.sfa.org.

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