Now, If someone asked you about the biggest change in the vending industry during the last few years, what would you say? Well, most would say micro markets would have at least crossed your mind. In 2015 alone, 51% of operators who expanded into new services invested in micro markets. According to Vending Market Watch, micro markets reached over 10% of all vending sales revenue in 2015. Micro markets are clearly a new and very exciting part of the industry, but why are they growing so fast? Furthermore, why are they so profitable
Part of the reason micro markets work so well is because of the shifting diet of the American consumer. As of late, healthy options are on the front of everyone’s minds; 91% of Americans consider nutritional content before choosing their food. Since micro markets offer a larger selection of healthier snacks than traditional vending machines, they appeal more to these new customer preferences. Vending operators have thus embraced micro markets because they can meet the new consumer demand for healthy food and for variety, which leads to increased sales and better-for-you diets.
SECURITY – MINIMIZING THE POTENTIAL FOR THEFT
While many operators dive headfirst into micro markets to capitalize on this new customer demand, there are some potential issues that lead operators to hesitate. One of the most significant roadblocks that stops an operator from getting into micro markets is the potential for theft. In contrast to traditional vending machines, items in micro markets aren’t sitting behind a locked door, so it easy to see why an operator might have concern. However, theft in micro markets had proved much lower than one may think. In a survey ran by Vending Market Watch, the majority of vending operators reported shrinkage and theft in micro markets as less than 2%.
Why would this be the case? Most micro markets exist in secure and controlled-access locations like an office breakroom – not just anyone can walk in. Also, if an operator communicates to the location that theft has repercussions, customers will be less likely to steal. Furthermore, operators should prominently displays security measures. Kiosks equipped with a front-facing camera and well-placed external security cameras will let customers know they are being monitored – which helps deter theft.
When an operator effectively uses a micro market to satisfy the breakroom demands of his customer while avoiding theft, there is real money to make. A study conducted by Parlevel on deployed micro market kiosks across the United States revealed the powerful money-making potential of micro markets. Operators that replaced vending with a micro market setup saw average sales increase up to 80%. Furthermore, in a location with 125 employees, an operator can average about $1,000 per week from a well-placed micro market. Part of this increase is attributed to higher ticket items in micro markets and purchases of several items at a time. As reported by Forbes, 88% of consumers are willing to pay more for healthier foods – a phenomenon operators should take advantage of.
Even more, operators can take their micro market profitability to the next level with an effective management system. Detailed sales reports, analytics, and product merchandising recommendations can help an operator make intelligent decisions about his micro market. With this info, an operator can pull slow sellers and replace them with hot items to increase sales and customer satisfaction. At the same time, operators can use a powerful management system to cut costs by dynamically routing, prekitting, and managing vending, office coffee service, and micro markets all in the same system. These tools will help operators increase overall operational efficiency and decrease micro market service time.
Pairing an effective micro market solution with a powerful management system can lead to extreme profits. One operator who replaced two vending machines with Parlevel’s micro market solution and took advantage of Parlevel’s management system experienced an 800% increase in sales. Instead of collecting $600 a month from two vending machines, the operator was able to collect over $5100 a month from his micro market.
Take a look at this infographic on the impact of micro markets to see how you and your operation can benefit from embracing the new technology