When most people think of eating on college campuses, they picture unappetizing cafeteria food. The use of University Vending Machines can change that.
Although cafeteria food has significantly improved, this is not always an option for a hurried college student. Students may not have time between classes to stop by the commons, and hunger can interfere with concentration and ability to perform.
Vending machines are both helpful and profitable. By placing a snack or soda machine in an ideal location, such as a college campus, you can help college students curb their hunger as well as make a profit from your sales.
The Benefits of University Vending Machines
Sometimes, hungry college students do not have the time to navigate their way through the cafeteria for a quick snack. Therefore, snack machines are ideal for universities. On-the-go students simply have to dig up their pocket change in return for an easy, tasty snack. Other benefits of college vending machines include:
Helping students get their “caffeine fix” to perk up for class
Providing college students with bottled water to prevent dehydration
Offering students both sweet and salty treats for a midday pick-me-up
Additionally, specialty devices like laundry vending machines can help college students with laundry, which is often a big step for new students. Others, such as medical aid vending machines, offer bandages and alcohol wipes to prevent infections and the spread of germs.
Vending Operations Making More Money Chuck Reed of MEI facilitates a panel of five outstanding vending operators to emphasize the main points:at the Nama show about Vending Operations Making More Money. Vending Operations Making More Money These large vending operators are talking about the basics of making money in the vending business and some of the new technology that keeps track of sales and inventory. There are new inventory controls from the warehouse to the route truck and into the vending machine. Vending Operations Making More Money a lot of the telemetry that are on vending machines can now tell if the machine is working or not and send a message when it is not. Recyclers were a big thing at this conference thus generating more vending profit. Installing credit card readers and telemetry that goes with it was also a big plus. To increase your vending business or keeping it at a manageable size. Good employees make mor profit. A good route man is worth his weight in gold. He sees your customer every day and can keep that account for you. Employee pay make sure some sort of commission. The better job he does the mmore money he makes and you make. Listen to some of the great ideas these guys come up with. You have been listening to Vending Operations Making More Money at The Vending Business Show only at A&M Equipment Sales. For More information Acquiring New Vending Accounts
Future Vending Technology ROI An interview with Mike Bunt, General Manager of Corporate Marketing Equipment of the Buffalo Rock Company
Future Vending Technology ROI The future of vending as it relates to sales and service is a topic that lots of vending operators are interested in but may not be able to evaluate from an operations point of view. Some of the hot topics today are healthy vending, interactive displays, campus id cards, mobile commerce, and micro markets. Have you evaluated any of these or similar opportunities in vending for Buffalo Rock?
“You must be careful on the new technology, we are, there’s a lot of it out there we call ‘foo foo’ technology that really is a marketing ploy today to those who like all the gadgets… but if it increases service calls, we have to be careful not to get overly involved with it.”
“We look at up front costs, then increased sales or decreased service calls and a lot of times it’s easier to come up with a decrease in cost of lifecycle than pin pointing an increase in service calls.”
Mike gives several examples of what he calls a win on technology, listen to the podcast:
EPISODE TRANSCRIPT:
Future Vending Technology ROI Tom Shivers: This is Tom Shivers with the Vending Business Show, here with Mike Bunt of Buffalo Rock, general manager of corporate marketing equipment of the Buffalo Rock Company. Thanks for being here, Mike.
Mike Bunt: You’re quite welcome.
Tom Shivers: Today we’re going to talk about the Future Vending Technology ROI and especially as it relates to sales and service because it’s kind of a popular topic today among vending operators, and sometimes it’s hard to evaluate from an operations point of view. Some of the hot topics today are healthy vending, interactive displays, campus ID cards, mobile commerce, and micromarkets. Have you evaluated any of those or similar opportunities in vending for Buffalo Rock?
Mike Bunt: Yes. Buffalo Rock is always looking at new technology. As a matter of fact, I attended the NACS trade show in Vegas and brought back six new pieces of equipment for testing. When we analyze equipment, we look at it from two points of views. One is the sales side and the other obviously is the service side of it. There’s all kind of new technology in the trade that is exciting. However, does it bring a value to the customer or to the company, and that’s what we have to look through.
Mike Bunt: For instance, LED lights. They claim to increase sales, which is a hard claim to back, but it does present the product in a much better light. However, we know LED lights last longer than the standard lighting and we know it’s going to reduce service calls, so the upfront cost of the LED is a no-brainer to us because we know we’re going to save service calls down the road.
Mike Bunt: And everybody must be careful on the new technology. We are, and there’s a lot of it out there what we call foo-foo technology that really is a marketing ploy to the youth today that likes all the gadgets and the gizmos, but if it increases service calls, we have to be careful not to get overly involved with it.
Tom Shivers: Yeah, for new vending technology, how do you go about weighing the cost versus benefits or say return on investment?
Mike Bunt: Well, we look at it from the standard ROI procedure. We look at the upfront cost and then we’ll look at increased sales or decreased service calls, and a lot of times like I say, it’s easier to come up with a decrease in cost of life cycle than pinpointing an increased service call. For instance, a few years ago everybody migrated to the electronic boards on equipment, and one of the things we noticed is that we were going to a lot of vending machines just to reboot the boards in the machines. Well, talking with the manufacturers, we convinced one, Vendo, to build a reboot chip if you will that basically just checks itself on all its boards, and if it senses a loss of connectivity, it reboots itself automatically. The boards that we were in test with, it drove service calls practically out of it for won’t take money calls, so that would be what we’d consider a win on technology. Now the consumer never sees it, but they enjoy the benefit of it because every time they go to the machine, they can buy a drink.
Mike Bunt: The interactive display boards, to me that’s more of a marketing ploy to the youth. It does draw excitement to your machines, but then you look at the cost of the doors versus the increased sales, and the placement potentials on those are very limited because you can’t just take an interactive vending machine and place it anywhere you have a vendor, so down the road, if we invest capital in equipment like that, we have to be very smart because you’re only going to be able to put in specific locations.
Tom Shivers: Are there any other examples that you have for evaluating vending technology?
Mike Bunt: We tested the [dex 00:04:52] project, where [dexing 00:04:56] was a huge technological win for Buffalo Rock is that you’re able to minimize routes on the streets, you increase sales, you reduce spoilage or outages of the machines, and that’s a huge cost to the company to get into [dexing 00:05:15] on 20,000 machines, but we know the payoff’s gonna be there through the efficiencies that the program’s gonna bring.
Mike Bunt: The MEI recycler, for instance. The big question is credit cards versus recyclers, and every machine that goes out into trade gets a changer and validator on it, so the upcost of the recycler, we have done tests on equipment where we put recyclers, and we’ve seen 30, 40, 50%. On a military base, we’ve seen 200% increases on machines for adding a component onto a machine that was already there operating, so that was a huge impact for us on sales, the return on investment was minimal, and it’s not like every machine doesn’t get a validator anyway.
Tom Shivers: Mm-hmm (affirmative). Well, it sounds like you’ve tested a number of products, perhaps several of the MEI products, and it sounds like the LED lights tend to pass the ROI test as well. Are there other features or ideas that are being touted today that make you wonder what the ROI might be for some of these?
Mike Bunt: Yeah. Right now, telemetry is a hot spot along with the interactive equipment, and the one challenge you have with telemetry is sales signal, and I don’t believe there’s anybody in this country that’s ever been on a cell phone that didn’t drop a call or it lock up. Well, that’s the same type of opportunities that you have when you put telemetry on your vendors. However, there’s a value to telemetry because it does allow you to preload your trucks, it can alert you for service calls, and I think once the technology is perfected and the calls droppage reduced, I think that you’ll see a lot more telemetry in the trade. You just have to weigh out the cost, the monthly fees versus the value of what you’re getting out of the system.
Tom Shivers: Mm-hmm (affirmative). Well, do the telemetry manufacturers allow for a testing period before making a decision?
Mike Bunt: Yeah, I would imagine they would. Again, that would be up to each company that’s selling the system, but like with most equipment, they’ll let you evaluate it and analyze it.
Tom Shivers: Well, thanks, Mike. Tell us about Buffalo Rock.
Mike Bunt: Well, we’re one of the largest privately owned Pepsi bottlers in the country. We have over 2000 employees and around 90,000 assets in the trade in Florida, Georgia, and Alabama.
Are you curious how you, the vending operator, can leverage technology into your vending business? There was standing room only at the 2012 NAMA OneShow in Las Vegas to hear the four panelists explain where things are going.
Chuck Reed, of MEI: “If your machines can take only $1 bills, you’re missing sales.” Currently, cash is used for 50% of small transactions; debit and credit combined represent about 30%. “You can’t force a patron to use one or the other.”
MEI is the industry leader in providing bill recyclers, a device that accepts larger bill denominations and utilizes $1 bills to replenish a reserve. Studies have shown that bill recyclers increase sales per vending machine.
Anant Agrawal of Cantaloupe Systems: “The Cantaloupe Systems principal envisions a not-so-distant future in which someone can tell his or her smartphone, ‘I want a Mountain Dew,’ and the instrument will display vending machines and other retail outlets in the vicinity. The thirsty consumer will go to the nearest machine, tap the phone on the card reader, and receive the drink — plus loyalty points and a discount on a Frito-Lay snack.” All this new technology will make it easier for the vending operator.
Michael Lawlor of USA Technologies: USA Technologies maintains a knowledge base that keeps track of overall card sales through ePort-equipped vending machines. Michael said 21% of card sales were for products costing less than $1, and 34% for items priced above $2. He recommends that operators need to raise vend prices, he predicted that consumers are more likely to choose the cashless option for higher-ticket sales if that option is available to them.
Chris Lilly of Best Vendors and chairs NAMA’s Vending Data Interchange Committee: “Most of you are not software engineers,” Lilly said, “but you want your systems to work together, to pass ‘messages’ back and forth.” The VDI standards describe protocols for those systems.
Bill Recyclers Mean Profits An interview with Chuck Reed, Director, Marketing and Sales at MEI
Why was bill recycling developed?
Bill Recyclers Mean Profits On average consumers do not carry exact change; most carry one or two dollars in coin and bills and then a five and a twenty dollar bill. The consumer has alternatives with convenience stores and so they change their behavior. If a vendor does nothing more than enabling $5 dollar bill acceptance it can save sales up to 10-15% and it goes up if they enable higher bill denominations.
What has MEI’s experience been working with operators?
Operators have not seen fraud to increase after installing bill recyclers. They have seen sales across a wide specturm of placements increase by 10-20%. Bill recyclers also enable operators to win new accounts. Bill breakers go away.
What locations benefit the most from bill recycling?
Locations where consumers are not coming on a daily basis with exact change.
Listen to the interview:
Tom Shivers: I’m Tom Shivers with the Vending Business Show. Here with Chuck Reed, director of marketing and sales at MEI. Today, we’re talking about new technology and bill recycling. Chuck, thanks for being here.
Chuck Reed: You’re welcome.
Tom Shivers: Why was bill recycling developed? Bill Recyclers Mean Profits
Chuck Reed: Bill Recyclers Mean Profits Well Tom, a couple of years ago a couple of business companies decided it looked like there was a problem in the vending industry in terms of enabling higher bill denomination acceptance. There was a concern by the operators that if they started accepting 5s, 10s and 20s that the changer would starve. It was a real concern understandably by the operators that that could result in exact change or sold out situations in the vending machine, that’d be a problem. A couple of companies got together and created what was new for the industry, called a bill recycler. Which is a product that is like a bill validator but stores, instead of just in a cash cassette, stores onto a drum a quantity of bills. Typically up to about 30 bills, although the operator can decide how many it is.
Chuck Reed: The operator can decide to store either one denomination, typically they’re one dollar bills or five dollar bills, one or the other, not both. That technology’s advanced now for the last couple of years. MEI of course in the bill recycling space and has deployed well over 30,000 of these devices now. We’ve moved well beyond just a niche product into something that really does work for an operator. What we find operators telling us is that you know in the old days the line was if the machines cleaned, filled, and adjusted you’ll get the maximum amount of sales. What we’re finding is is that there’s a surprising large number of sales that an operator is missing. Because today a lot of consumers don’t carry a lot of exact change on them.
Chuck Reed: In fact we did a study about two years ago and found that on average about half of us carry the equivalent of about three, one dollar bills or the equivalent in coin. Only about, and most of us have at least one dollar bill on us. The large majority of what people carry on them is say one or two dollars in coin or bill and then a five and a 20. If the vending machines only taking a one dollar bill and some loose change, a number of consumers, in fact as many as half, won’t be able to make the purchase at the vending machine.
Chuck Reed: I think it’s been a surprise to everybody involved. What happens is the consumer has an alternative now. They go to a convenience store, a kiosk, whatever it may be. The operator not only loses that sale for whatever that product was going to be, but they lose a larger percentage of sales because a consumer changes their behavior. If the stores closed more often, the vending machines not able to take their money, then they start changing their behavior.
Chuck Reed: What we have found is by looking at what the consumer is carrying and enabling a higher denomination in bills the vending operator is able to capture a larger percentage of sales. In fact, what’s interesting is if the vending operator does nothing more than just enable five dollar acceptance in a vending machine, which is often times enabled through a dip switch on most bill validators today. They can see sales lifting between 10 and 15%, which is pretty dramatic for doing nothing more than just enabling five dollar acceptance. The number goes up even higher than that if they enable 10 and 20 dollar acceptance.
Tom Shivers: What is MEI’s experience been working with operators?
Chuck Reed: What we found is there was a lot of concern among operators early on about enabling this higher denomination bills and would that result in consumers claiming fraudulently that they had put a 10 or 20 dollar bill in the machine and indeed they hadn’t. Then trying to get money back from the operator. What we have found, that really hasn’t been the case. Operators have not experienced any kind of, see increased fraudulent activity with people claiming higher denomination bills being cheated from the vending machine.
Chuck Reed: What they have found, most operators, is that indeed by enabling five, 10, or even 20 dollar acceptance, they’ve seen sales lifts of 15, 20, 25% or even higher. What’s also interesting is that many of the operators that have a large number of recyclers deployed have seen the sales lift across a wide spectrum of product placements, location placements. Car dealerships, hospitals, amusement parks, locations particularly where there’s a lot of transient activity and people may not have exact change on them and they walk up or they may have a family of four that all wants something to drink. The vend prices say $2.00 each. At that point they have say, almost $8.00 of product to buy. The consumer would prefer to put a 10 or 20 in versus trying to find the equivalent of $8.00 in loose change or dollar bills.
Chuck Reed: We have seen significant increases or operators have seen significant increases in sales and they have also not experienced any kind of dramatic reduction and reliability. Bill recycling today is a very reliable technology, particularly the MEI product. We see very, very little on the way of jam frequency. Operators are increasingly confident in putting recyclers out across a wide spectrum of locations and seeing the benefit of the sales lift. Operators are really thrilled about that as an opportunity for them. It’s also enabled them to win new accounts by being able to go into a new account and talk about taking higher denomination bills, which everybody inherently knows is what they’re carrying them on when they’ve gone to an ATM recently.
Chuck Reed: All in all it’s been a really good experience for most operators. Good sales lift as well as seeing some new placement locations for them. Another thing to point out, which a lot of operators like to point out to me, is that they’ve also been able to eliminate a lot of bill breakers out of their banks. The bill breakers that we use to always have in a vending bank can go away with bill recycling because at that point with the bill recycler, you don’t need to worry about changing out a 5, a 10, or a 20 dollar bill for change. You’re able to accept that bill right into the bill recycler and pay back in bills and coin, just like they would in a retail experience. A lot of operators are excited also about the ability to take bill breakers out of vending bank and save that equivalent amount of capital deployed across a large number of vending banks.
Tom Shivers: I know you mentioned in several locations there, but what locations benefit the most from having bill recycling?
Chuck Reed: Tom what we find is you want to find locations where consumers aren’t necessarily coming to that location every day and therefore would have exact change for the 1.25 drink purchase or the 85 cent snack purchase. Locations where there’s a fair amount of transient activity. Like I said, we find that hospitals tend to be a good location. We hear a lot of good things about them. What we find is that operators are telling us that they haven’t found many locations where recycling doesn’t work. Hospitals, shopping malls, theme parks are wonderful location where you’ve got large families gathering and at some point during the day needing either a drink or some snack product. You have to think about the vend purchases more than just a single vend price. For example, if the drink is $1.50 out of the vending machine and they need four of them. That’s not $1.50 vend price to them, that’s a $6 vend price. That’s the way they treat it and that’s the way the operator needs to treat it. In that case, as I said earlier, since most of us don’t carry that amount of exact change or coin on us, it’s important that you’re able to take a 5, 10, or even a 20 dollar bill. That’s really what the consumer has on them and they consider that $6 vend worthy of putting in a 5 or a 10.
Chuck Reed: I think we’re all past the days of lamenting about how customers wouldn’t put in a higher denomination bill into a machine. I think we all go to a store wherever we live and we put into the self-check kiosk 5, 10s and 20s already. Consumers are well trained on putting in larger denomination bills into a machine and fully expecting good reliability. Again, wherever there’s a large group of people that gather where they may not necessarily have exact change, you’re going to find bill recycling’s a great alternative way to enable higher denomination acceptance. Not worry about the changer starvation and really capture the sales you otherwise would have lost when the consumer simply wouldn’t have the means to make that purchase.
Tom Shivers: Well, Chuck thanks for sharing. Any little thing you want to share about MEI with us?
Chuck Reed: I think MEIs excited about introducing some of these alternative payment technologies. Obviously, we’re here to talk about bill recycling today but we also provide cashless products to the operator base as well. I think what’s important for the operator to understand is that MEI has a proven track record of developing very robust, reliable alternate payment technologies. I think operators need to take the time and take advantage of what’s been developed and try to change up their offering to marketplace so they can capture new accounts, retain the accounts they have, and more importantly capture some of the lost sales that are otherwise are walking away and going to a convenience store, a kiosk, wherever else a consumer has to go to make that retail oriented experience.
Tom Shivers: You’ve been listening to Bill Recyclers Mean Profits at the Vending Business Show, a publication of A & M Equipment Sales. For more Vending Business Blogs USA TECHNOLOGIES ePORT G9
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When most people think of eating on college campuses, they picture unappetizing cafeteria food. The use of University Vending Machines can change that.
How Vending Operators Can Leverage Technology
