Brand Preference Analysis

Wireless transmission of data, if done cost-effectively, would enable the Antares operator to solve a whole host of problems that can occur. If every machine were equipped with an automatic transmitting device, dynamic scheduling would become a reality, and that means that you would know instantly when a machine was out of order. However, real time transmission of data is not necessary for Antares operators and suppliers to reap all of the benefits from recording and reporting brand preference analysis, by individual machine.

Sales data not needed in ‘real time’

Individual consumer brand preferences simply do not change very quickly. Brand preference data which is harvested from the machine by a handheld computer when the machine is being filled, and later downloaded into a host computer when the driver returns, is just as valuable as it would be transmitted in ‘real time.’

Brand analysis saves one trip

With this system, the driver will not have to make two trips to the machine. One trip would have been to check the inventory, and then the other would have been to go back to the truck to pick the order, and then return to the machine to fill it. You should be able to do brand analysis for your Antares business to save one trip for your driver.

Systems increase sales and profits

A remote data transmission system will increase sales in you Antares vending business. This of course would be based upon improving the product mix at each location. In addition each driver will now be able to service more machines. The operator should show lower operating costs based upon improved route productivity, and lower office costs, based upon no data entry costs.

Finally, there is another opportunity to improve profits. Although the primary goal in brand preference analysis by machine is to increase sales, there will be many situations where astute operators will notice a product that is only yielding one or two sales per week in a particular machine.

In such a case the operator usually has two choices. He can either substitute a different product, or he can choose to add another column of the best selling product in the machine with the hope that he can extend the interval between services for another day or two.

The Economics of Note Acceptors

When you have a note acceptor in your Antares vending machines, it would take little or no time driving, buying stock or filling the vending machines. If you are already at the site, then taking out the bank notes is of little effort. If sales increase then your profits will also increase with little or no increase in time. All this means that your return on time will immediately improve by adding a note acceptor.

If you are aiming to return 50% of your investment per year then here’s the math on a note acceptor:

• cost of note acceptor: $600 (average)
• required sales increase per week: $12
• 50% required annual return: $300

If a note acceptor can improve sales for your Antares business by a number of certain dollars per week, then that means that it is a great investment. In fact spending $6000 on 10 note accepters for existing Antares vending machines might be a better investment than spending $6000 on a new vending machine. Hopefully your sales will increase by $6000 per year at your existing locations.

So the final question….will sales increase by $12 per week. Any site of your Antares business that is doing over $120 per week deserves a note acceptor. If you can get $12 (or 10%) more sales then that means that you are doing great, any more than that is pure profit. It is possible to have sites that are doing $200 per week where $150 is in notes.

All this goes to show you that a note acceptor might be the carrot that gets you a location over the competition.

Antares vending machines come with a bill changer mounted on the side. After you have reviewed the economics of a note acceptor, then you can decide whether a note acceptor would be more profitable for your vending business. There are a number of operators who have note acceptors and have stated that they always receive notes at their locations.

These note acceptors are cleaned using cleaning cards. These cleaning cards are a key component in preventative maintenance. Reader failures and errors are linked to poor maintenance, as contaminants damage reader heads. After several hours of use, reader heads begin to accumulate heavy dirt. Thus cleaning of the note acceptors is very important.

Planograms Need Not Limit Variety

Merchandising discipline improves overall sales performance, and brands simply sell better. There is merit in finding a process that manages the content of the Antares vending machine to achieve greater profitability and limits the choices available to the consumer an a way that will benefit the manufacturer, operator and consumer alike.

Standardization’s downside: less variety

The problem with standardized menus is that they limit variety. Some of the research that has been presented in our industry that is designed to promote a better representation of the better selling items has this unfortunate side effect. An Antares vending machine that has mostly the same items in it everyday will not continue to perform as a high level, month after month, even if they are great brands and fast sellers. Research has shown that if there is no change of variety of products in the Antares vending machine, volume will fall. New products are life blood to vending and without it the consumer becomes bored.

Top sellers don’t always make the proposed menus

Slow moving items have no place in your Antares vending machines, thus it is important that you pay attention to what sells. But as every vending operator knows, changing products in the machine is smart. It stimulates impulse purchases and it can increase traffic at the machine. At the same time it allows you to take advantage of specials and promotions and it can help you identify strong sellers.

Product manufacturers should consider making fewer items available to the trade at any one time. This can be accomplished by cycling products through the channel. It would reduce inventory requirements and, as a result, remove cost from the system. It would create scarcity, and thus demand, for certain products which could then be leveraged when a product is reintroduced, and it would force the market to embrace change as a merchandising strategy.

Operators must insist on a plan

Antares operators should establish a merchandising plan that they can live with. They should also leave a certain number of slots open for the route people to choose. Then after the first month, they should change out the slowest five planogram items. The same should be done each month for a year. Some items can be brought back. By doing this, you would have created a system that replicates the merchandising processes that some of the larger product manufacturers have created and promoted, relative to machine planning, but it will be unique to your market place. At the end of the year, compare your average revenue per machine to that of the previous year. There should be an improvement.

New Strategies Sought for Raising Prices

There are some operators that are not questioning the need to raise prices. Given the recent fuel costs, you will need to find a new strategy for raising prices in your Antares vending operations. People have different methods of raising prices. For some it is easier to raise prices in smaller increments on a frequent basis than the more common method of taking a big jump less frequently. Others would prefer it the other way round.

Long term technology offers solutions

Many Antares operators are aware that technology offers new ways to save fuel, but these are long term and not short term solutions. Technology requires an upfront investment.

One technology that operators have added is satellite-based fleet monitoring, known as Global Positioning Systems (GPS). More and more operators are using these systems to improve operating efficiencies and employee accountability. These systems save fuel in three distinct ways: 1) they allow the Antares operator to know if unauthorized vehicle use is occurring; 2) they make it easier to determine more efficient routing; and 3) they allow managers to monitor the speed of the drivers.

Alternative fuels reduce costs

Conversion to alternative fuels is another long term solution. Today, propane is less expensive than either diesel or gasoline. This is just one fuel option that you can use in your Antares operations so that you can cut down on the amount of money you spend on fuel. A gallon of propane gas costs less than half the price of gasoline. There are about 500 depots located all across the country. Operators need to consider performance differences when looking at alternative fuels.

Fuel saving tips for route drivers

1) Keep tires properly inflated because under inflated tires can decrease fuel economy.

2) Drive at a steady pace. Unnecessary speed-ups, slowdowns and stops can decrease fuel economy.

3) Perform maintenance checks according to schedule.

4) Avoid lengthy engine idling. Turn the engine off when you are delayed for more then a couple of minutes.

In the short term, Antares vending operators have no choice but to consider raising prices and reducing commissions. The government is not forecasting any significant relief at the gas pump.

Extra Large Firms Gain Share

The worst part of the 2001 recession appears to be over, but Antares operators continue to face a challenging economic environment. The industry’s traditional industrial customers continue to minimize payroll through better management, automation and outsourcing.

Vending operators also faced higher costs for fuel, employee health benefits, petroleum based products and paper goods.

During the recession, the extra large operators increased their share of vending industry sales. Extra large operators expanded into smaller work sites more aggressively when the recession began to compensate for downsizing in larger accounts. In 2004, these extra large operators increased their total market share at the expense of other operators.

The larger operators had the advantage of being able to invest more resources in new equipment, training, marketing and technology. Technology has proven to be a particularly important advantage when it allows operators to deliver good customer service at less cost

State of the art tools such as DEX handhelds will allow an Antares operator to account faster and more accurately for cash. These handhelds will also give an operator more control over what products are placed in the Antares vending machine. They will also get to know what is selling and what isn’t. In addition to this it allows for route vehicles to be preloaded in the warehouse based on prior sales which results in faster filling of Antares machines at less cost.

Greater financial resources also allowed the larger Antares operators to capitalize on more product categories, thus enabling them to maximize their return on overhead.

Weak sales growth snagged investment not only in cashless systems, but also in other technologies designed to improve the vending industry’s ability to compete against retail channels. There has been little change in the number of operators using handheld computers.

This software will allow the operator to keep a track on all the sales, thus catering to their customers more efficiently. This is important as customer preferences have become more diverse.

Eliminating ‘Exact Change’ Situations

New currency payment systems have more features to eliminate ‘exact change only’ situations. Some even recycle bills and allow multi vending.

As currency handling technology evolves, Antares vending operators are finding new tools to offer customers more convenient payment options. Antares operators are finding that giving consumers the ability to use whatever change they have on them increases sales.

Technology is enhancing the versatility, reliability and durability of bill acceptors and changers. These benefits will reduce consumer price resistance and at the same time allow for a wider variety of price points in the Antares machines. This is particularly important in machines that carry more product variety.

Dollar coin payout expands

A recent survey found that most bill acceptors accept denominations over one dollar and most pay out dollar coins as change. A five dollar bill acceptance is a customer convenience that definitely helps sales. Many consumers are not used to putting 5 dollar bills in vending machines, but they are prone to do so in a newer machine, like the new Antares vending machines.

Five dollar bills increase sorting

Five dollar bill acceptance in Antares vending machines creates the need to sort 1s and 5s. But this can be easily overcome with a dual pocket sorter.

Consumers just need to get into the habit of carrying dollar coins in their pockets. Antares operators nonetheless have found it worth their while to offer dollar coin payment to support higher denomination bill acceptance. This has created a need to continually replenish coin changers with dollar coins. There is also a corresponding benefit, in that; the coins that are carried back to the bank are significantly less.

The 5 tube MEI cash flow Series 7000 automatically manages coin levels in the changer to optimize payouts. A feature known as “auto-par” determines the best amount of change for a location. This is defined as the least number of coins in the change tube that still prevents “exact change needed” situations.

The changer’s software automatically reviews sales activity for the last three weeks. The tubes are automatically replenished as necessary. This will keep the Antares consumers happy and the location happy as well.

Small location Vending

Technology in vending can create new efficiencies, but it also adds cost. It can bring new efficiencies to Antares operations. One aspect of vending where this would be particularly beneficial would be in small locations, which have never been profitable for the majority of operators. No one can say for sure whether technology can make small location vending a profitable business.

An underserved market

The innovations are new and small locations remain a largely underserved market. Work sites with 10 to 50 people remain the honor for full line vending operators with limited overhead.

Although there have been signs of job growth in certain geographic area, the automatic merchandising industry continues to suffer the fallout that struck at the start of the millennium. Despite this fallout, a number of Antares operators have been successful in their vending operations, due to the Natural Choice vending program.

Longer payback and other options

Some full line operators have been able to sustain small locations by tolerating a longer payback period.

If there is a location with 20 to 25 people with about 80 full size combination machines, that means that half of them would receive no subsidies and would have a 2 to 3 year payback period.

If you want to have a small Antares operation then you should serve the small site with combination units. Combo machines are best suited for small locations. In addition to this, it is important that you should never compromise on the customer relations because this is what small locations are most in need of.

Full line Antares operators have always had a use for smaller location equipment in satellite locations-work areas that are separate from the main break room that need vending. While the main break rooms are serviced daily, the satellite location can be serviced two or three times a week.

The various new small locations options are drawing attention, because of the benefits that come along with this type of vending. As an Antares operator, you can decide to run a small location operation and then watch the profits coming in.

Snacking Evolves to Main Meal Status

Changing lifestyles and more diverse consumer tastes give Antares vendors a chance to attract a wider audience for salty snacks.

With more people eating on the run these days, a bag of chips or snack mix from an Antares vending machine often serves as the mid day meal. Hence more dynamic flavors are playing a bigger role in salty snacks, and snack manufactures are working hard to come up with new and exciting flavors.

Aging baby boomers are also adopting healthier lifestyles and want to include salty snacks in this lifestyle choice. Consumers want a healthier snack choice but still demand full flavor and good value for their money.

Antares operators have noted that the traditional “grab ‘n go” snack food is now standing in for a meal. This explains the growth in intense, bold flavors.

Customers demand a product that they can munch on when in the car or maybe when walking from place to another. As a result of this trend, consumers have become less concerned with fat free snacks and more concerned with convenience.

Ethnic tastes expand

Hot and tangy flavors are also spicing up the salty snack mix. Traditionally, tortilla chips have relied on salsa or dips to spice them up, but manufacturers are now looking at putting the zip right on the snack. Flavors such as lime, black bean and red pepper have been added to tortilla chips.

These hot and spicy flavors are popular, largely on account of ethnic tastes. Antares vending operators have taken notice of this and have placed hot and spicy flavored snacks in their vending machines. These flavors have not only appealed to the ethnic community, but to the public in general. The demand for these snacks has grown since their introduction.

Since people are always in a hurry, they hardly get time to sit down and have a meal. These people come across vending machines, and purchase snacks, that will have to count as a meal. These snacks are convenient because they can be taken when on the move.

This of course has proven to be very profitable to the Antares vending operators, because snacks are always in demand. America is a snacking country and that is one thing that will not change any time soon.

About the Vended Product

For a vend product to be successful in your Antares vending business, there are a number of factors that need be put under consideration. These factors can affect the sale of your product. Here are some of those factors:

How does it taste

The quality and taste and taste of a product are very important to a customer. These factors even outweigh price among the essential criteria for sales success in your Antares business. If the product tastes good then of course it will be popular with the customers.

Does it make money?

Finally, both operators and distributors make no bones about the Antares operator’s need to achieve a sufficient margin. Without this qualification, the other product attributes will not be enough to gain an opening in the vending channel. Vending is ideal for testing new products and for new product introduction in well controlled and positioned segments. The relationship between price and quality is a closely related issue. At the end of the day what matters about a product in your Antares vending machine, is whether it is making money for your business.

Merchandising matters

You need to know how to promote a new product in your Antares vending business. This can lead to augmented vending sales. Offering new products to the consumer is important and it is also necessary that route personnel be familiarized with new items.

You can use planogramming to get new products into all your Antares vending machines. All in all, whenever there is a new product, make sure that the product is well promoted. In addition to this, make sure that the product name is clearly visible in the Antares glass front vending machine.

Discounts draw interest

Some operators practice couponing and cents off for special promotions and also strongly believe in sampling to get customers to try new products. Offering discounts to the customer, for new products, is a great way of promoting the product, because it will draw the interest of the customer.

How fresh is it?

Whatever products you keep in the Antares vending machines, make sure that they do not exceed their shelf life. You would not want a customer buying a product that has expired, from your vending machine.

A View of Vending

The vending industry hasn’t done a good job at marketing themselves. This is an area that still needs improvement. Convenience stores at one time had to overcome a stereotype as an overpriced outlet to one that offers great convenience and a way for customers to save time. These are just some of the similarities between c-stores and vending.

The shopper no longer price shops between a supermarket and a c-store because they understand that c-stores are selling a convenience. The vending industry can change consumer perception as well. Large Antares vending operations should have an entire division dedicated to marketing.

Customers need to be educated about the service the vending industry provides fro them. The whole industry has to be promoted. If the public is educated about the service that Antares vending operators as well as other operators is providing, then they would be more willing to pay for it. If Antares operators as well as other operators compete strictly based on the vend price, then the vending industry will not be able move forward.

Category management is a system that simplifies selection as the route and warehouse levels and enables the Antares operator to control the machine menu. To do this, the Antares operator must have a way to track individual product sales accurately. You can start off by investing in handheld computers.

Vending and c-stores are both retail outlets with limited selling space. In both, a product is being sold, but more importantly, a convenience. The vending industry has very limited space and you as an Antares operator will need to treat it like gold.

With handheld computers, you can easily track product movement in your Antares business, and therefore be able to build successful planograms. At the same time category management is becoming more crucial in the vending industry. As a result the manufacturers are paying more attention to the industry. All these technologies that have been mentioned can be implemented in your Antares vending business. By doing that, you can be well on your way to a more profitable business.

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