Brad Bachtelle of Bachtelle & Associates (Tustin, CA) once said in an article, “Micro markets are taking us to tomorrow.”
It is a statement that is not only supported by the increasing popularity and emergence of micro market locations, but also the return they provide to owners. It can be argued that micro markets offer a “win/win” result, not only for owners but for customers as well. The advantages they provide for end users are well-documented in many vending articles, including our own blog items such as Self-service Kiosks Offer a Convenient Twist to the Office Lunchroom and The Advantages of Self-service Checkout Systemsthe businesses that implement them into their office locations and to those who purchase products from them.
• Convenience. Convenience. Convenience. The concept offers a store at the office with a wide selection of choices.
• Users can examine items prior to purchase and get the items they pay for, as opposed to losing their money if the item gets stuck, as often happens in a traditional vending machine.
• Fresh products, restocked daily that provide healthier options.
• Reduced travel time/time out of the office resulting in extended breaks. It’s a great incentive for increased productivity.
It is no surprise that the industry has grown so rapidly over the past two years. Research done by Bachtelle and Associates showed that micro market locations in the US rose 170% between 2011 and 2012. In December 2012 there were 2,642 active micro market locations with 2,724 active kiosks, with some high traffic locations having more than one kiosk. This represented a sales volume of $90.74 million. It is predicted that this number will increase within the coming years. Slabb supplied a little over 2,000 of self-service kiosks to micro market clients between 2011 and 2012.
Micro markets are becoming a more lucrative investment opportunity because they provide additional benefits than the traditional vending machine:
• Micro markets tend to attract 18% more visits per day with an average of 1.2 sales per day per visit, as compared with 0.7 sales in a vending area. This figure may be higher in some environments.
• The inventory management system is usually web-based, making inventory evaluation much easier, ensuring fresh inventory and up-to-date regulatory practices.
• Customized units can be created to fit different locations which is a major selling point, especially when there are space limitations.
• It allows operators to focus on providing an enhanced customer experience with enticing layouts and products that will ultimately increase profits, including the strategic placement of add-on purchase items near to the check-out kiosks.
• There is less maintenance and downtime of machines and the kiosks provide an easier transaction process especially for multiple items.
• There is also some pricing flexibility allowing operators to collect sales tax on items purchased unlike a traditional vending machine.
There is no doubt, however, that micro market products are often priced higher than products found in a traditional vending machine. They are typically 15% to 20% higher, with sales tax added to that. Pricing is usually set to offset the cost incurred due to theft of items, product spoilage, and the additional equipment, software and supplies that are needed. However, many employers often provide their employees with cards that give subsidized prices for healthy food options. It’s a small price to pay for great convenience.