Making the Choice: Micro-market Vs. the Traditional Vending Machine

There’s a new productivity trend developing. It might be considered an inevitable result of the increased demand on an employee’s time with the expectation of high productivity levels to ensure that deliverables are completed in a timely manner and to a preset standard. This new development is not ominous in any way, but actually quite practical. It’s called a micro market.

 

 

An Avanti Markets micro market

An Avanti Markets micro market

A search of the word may result in an economics-based definition, but the micro markets that continue to crop up in various work spaces can be described as a ‘convenience store at the office’, one that provides freshly prepared lunches, healthy snacks and drinks that employees can purchase. What makes micro markets so unique, is not only the convenience of an accessible and healthy lunch option, but the fact that they utilize a self-service model – one that relies on an ‘honor system’ where employees are expected to pay for their purchases with cash, credit or even via their cell phone without an attendant or cashier on-site.

 

 
So why a micro market vs a traditional vending machine? Brad Bachtelle of Bachtelle & Associates, in an article on vendingtimes.com stated it in one sentence – “We’ve created a new channel [that’s] driving more sales, pleasing customers and exciting our industry.” Research done by his firm predicts there will be approximately “13,000 micro markets on location by 2015 and 35,000 within a decade.” The number of micro market locations in 2012 (2,642 active locations with 2,724 active kiosks) represented a sales volume of $90.74 million. 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 depending on the location.

 

 
• The inventory management system is usually web-based, making inventory evaluation much easier, ensuring fresh inventory and up-to-date regulatory practices.

 
• Components can be customized 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. Operators use retail tools and techniques to ensure 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.

 

 

• The use of prepaid user accounts at micro markets represents a shift from the traditional vending model. Accounts are funded and money collected before goods are purchased which radically shifts the cash flow requirements of operators.

 

 

• Portions of these accounts can be funded by HR, Wellness, or other workplace programs with a mandate directed at healthy eating and increased productivity.

 

 

 

Loyalty programs can be incorporated at the micro market

Loyalty programs can be incorporated at the micro market

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 – a small price to pay for great convenience.

 

 
So, “build it and they will come…” The benefits mentioned make it seem easy enough, but it takes a little more than that. There are a few elements that should be in place to be successful in the micro market business including:

 

 
• Products that are attractive to the customer – As a society we are more health conscious than ever and providing healthy, fresh food options, restocked daily is one way that micro markets set themselves apart from the traditional vending machine.
• The right layout – Most micro market operators can work with any space to provide a customized, attractive and functional setting that will make movement and payment within the location as easy as possible. Access to a power supply for the kiosk system, coolers and freezers is also required, along with an internet connection.
• Self-service with a difference – And we don’t mean inserting your money in a slot and hoping that the item you want doesn’t get stuck (as is sometimes the case in a traditional vending machine). We’re referring to self-service with options including, type of payment that can be used, level of interactivity (dependent on the interface and software used); choice of loyalty programs (as mentioned above).

 

 

 

A self-service kiosk at a micro market

A self-service kiosk at a micro market

The key element that makes the self-service option possible, the ‘face’ of the micro market, is the self-service kiosk. Unlike the traditional vending machine, the kiosk must allow the user to scan or input items as well as pay for them. There are kiosks that even allow the input of coupon codes and vouchers at the time of purchase. The checkout system must be capable of handling multiple transactions as well as track and record data to provide accurate inventory and revenue reports.

 

 
The design of the kiosk is similar to those found in other industries, but at Slabb, we design our kiosks with the end user in mind. One of our major clients commented that their customers particularly like the look of our kiosks, the low maintenance required and their ease of use for end users.

 

 
Fast becoming another segment of the retail industry, micro markets focus on enhancing the customer experience. It’s the added elements that count, so micro market operators can also consider providing additional services at checkout such as bill payment options, payday loans and check deposits. All of which can be provided through a kiosk. All it takes is partnering with the right institution (bank and/or utility company) to provide a secure link to the company’s system. The micro market then becomes an even more convenient option allowing employees to do so much more in the comfort of their office.