Co-Owner and VP of Operations, Everest Ice and Water Systems
Dan Doromal, of Everest Ice and Water Systems, with one of the company's vending machines
As inflation drops and grocery price increases begin to ease, grocery retailers now have an opportunity to boost their sales based on customers having a little more spending power. However, just because customers can buy more doesn’t mean they will.
To overcome any buyer hesitations, retailers must find innovative ways to sell products that haven’t been selling as well during the inflationary period. Vending machines can fill that role by offering affordable, convenient and eye-catching purchasing options.
Changes in Customer Behavior
After being painfully squeezed by high prices for two years, consumers have gained some much-needed relief as inflation reaches its lowest point since 2021. But while grocery prices are becoming more manageable, retailers must acknowledge that prices still remain quite high. That poses a challenge for getting people to purchase non-essential items. During the inflationary period, many customers reduced their spending to only the most essential items and it’s unlikely that these habits will easily fade.
Moreover, even as prices stabilize, retailers may observe a shift in brand loyalty among customers who have discovered new favorites during the inflationary surge. To get customers to consider new products, retailers will need to carefully balance the need to provide value-driven products while maintaining their already tight profit margins. To that end, introducing new ways of purchasing products might be exactly what’s needed.
Attracting Customers Through Novelty
While price may be the main concern of today’s consumers, convenience and novelty can still be powerful draws. This is where modern vending machines can tip the scales in a retailer’s favor. Unlike older vending machines that only provided standard snacks and sodas, the machines on the market today offer far more product choices. For instance, you can now find machines that sell beauty products, electronics, alcohol and even freshly made meals.
The last one – freshly made meals – can be particularly enticing for customers who have never seen such machines before. For instance, one machine provides freshly cooked ramen in a biodegradable bamboo bowl. The sheer novelty of getting something like that from a vending machine can draw customers to make purchases they hadn’t planned on. In addition to ramen, vending machines can also sell pizza, salad, pasta, ice cream and anything else you can think of.
However, while the novelty factor is a strong initial draw, getting repeat customers will require a commitment to consistent quality and service. Retailers must ensure that their machines are well maintained and remain fully stocked with fresh products. It’s also worth analyzing customer demographic data to determine which products would have the most appeal. For example, stores that get a lot of families with young kids might benefit from installing an ice cream vending machine.
Attracting Customers Through Technology
Another thing that differentiates modern vending machines from older models is their use of technology. Many of them use cashless payment methods for greater purchasing convenience. There are also machines that use touchscreen interfaces, voice assistants and reward systems that offer discount points or prizes for making purchases. For many customers – particularly Gen Z – this use of technology can be a powerful draw. It could even be said that the use of technology is a basic expectation of the modern customer.
Looking ahead, the vending industry is certain to roll out even more advanced technologies. For example, some companies are experimenting with the use of artificial-intelligence cameras that can read the expression on a customer’s face and make purchasing suggestions based on the customer's mood. Another budding technology is Internet of Things, or IoT, which involves a collection of devices that can gather and analyze customer data to make recommendations based on customer preferences and purchasing history. While these are still nascent technologies, they give an idea of what could be just around the corner.
Convenience, Novelty, Diversity
Installing modern vending machines can be a great opportunity for grocery retailers to sell new products or to encourage customers to go back to purchasing products they may have eschewed when inflation was at its highest.
The combination of convenience, novelty, and a diverse range of products that vending machines offer makes them a welcome addition to any store. As time goes on, these machines will likely become a more common sight, meaning that the stores that embrace this trend now will gain the most value.
About the Author
Dan Doromal, co-owner and VP of operations for Apopka, Fla.-based Everest Ice and Water Systems, has helped his company earn a number of prestigious awards ranking it as one of the fastest-growing and best-performing companies in the country.