Vending machines have been around for hundreds of years, and over the years, vending machine technology has advanced and made life easier for the people running the businesses and the customers that make use of them. Over the past few years, especially, the vending machine market has seen dramatic change. Below, we’ll take a look at some of the most evident trends in the industry, investigate smart vending machines, take a look at how consumer expectations are changing, and dive into the benefits and mechanics of branching out into the intelligent vending machine market with a new business.
What Are the Evident Vending Machine Technology Trends?
Some of these latest trends are reserved for smart vending machines only, but others have been integrated into older models as well. If you're interested in more trends and industry statistics, head over to our 2023 Vending Machine Statistics piece.
Cashless Payment
In a country where cash is quickly becoming obsolete, the need for cashless payment systems in vending machines is becoming more and more prevalent in a past few years. The industry is quickly adapting to this need, and all modern vending machines are equipped with at least a card reader, if not an option for mobile payments as well.
Payment Security
With the increase in demand for cashless payment systems, the need for cashless payment security has also risen exponentially. Vending machines won’t make money if people don’t trust the vending machine to keep their card information secure. Vending machines that accept cards or mobile payment methods are now designed with encryption capabilities to keep payment information secure.
Camera Security
As vending machine market is striding forward, the need for keeping all those upper-echelon features safe is emerging as well. Traditionally, cameras have proven themselves a best way to secure a physical premise and so is the case with vending machine security. Built-in cameras or a head-high wall-mounted cameras can be used to detect crime and keep your vending machines from harms way.
Machine Diversity
While the vending market was dominated by snack and beverage machines historically, there has been a major shift in the diversity of vending machines in the vending machine industry. That explains the rise of custom venidng machines that allow you to play around with vending machine features and branding.
Now, special food items, healthy snacks and beverages, nutritional supplements, and all kinds of retail products that offer an energy boost to customers can be purchased from vending machines. More expensive products are also being offered thanks to advancements in machine security and anti-theft mechanisms. You’ll also be able to find vending machines in locations they never would have been placed even ten years ago.
Reverse Vending
Reverse vending machines are ones that recycle packaging from items that have been purchased in order to decrease the environmental impact of the packaging required for sale in a vending machine. This innovation will only continue to gain traction in the vending machine industry to help combat the global crisis of climate change and the effects of harmful greenhouse gas emissions.
Field Service Management
Field service management software is primarily used by vending owners that have an extensive vending machine route and multiple staff members to coordinate, but they are incredibly beneficial for smaller owners as well. These systems monitor inventory, track consumer habits, and make it easier to dispatch staff to various machines for restocking or maintenance when it is required. Not only does this improve the efficiency of vending management, but it also ensures consumers always have access to a well-stocked and functional vending machine when they need one.
Promotional Screens & Dynamic Pricing
The newest generations of vending machines have promotional screens built in to make them more appealing to consumers and more capable of generating business. As promotional screens influence the number of people approaching the vending machine, dynamic pricing begins to enter the equation.
Dynamic pricing is a pricing structure that fluctuates based on demand and stock levels. You can offer discounts on products that aren’t selling as well or that are nearing their expiry dates. If certain products are selling out faster than you can restock them, you can then raise the price to manage supply and demand a bit better and improve your profit margins on those items. Some vending owners even adjust the prices depending on the time of day: higher prices during peak purchasing times and lower prices during off times.
If you're seeking advice before you actually implement your restocking strategy, go check our vending machine profit calculator. It should help you plan out your next business move and take all the nitty-gritty into account.
Sustainable Vending
Smart vending machines offer cost efficiency and sustainability benefits by optimizing operations. Sustainable vending machines reduce energy consumption through advanced cooling and lighting systems, lowering operational costs. Smart sensors minimize food spoilage, cutting waste.
Remote monitoring and predictive maintenance enhance machine uptime, saving on repair expenses. Cashless transactions reduce the need for cash handling, enhancing security and efficiency. Moreover, their compact size and modular designs reduce land usage and transportation costs. These eco-friendly features not only lower environmental impact but also lead to substantial cost savings, ultimately boosting profits in the vending machine business.
What Are Smart Vending Machines?
Intelligent vending machines are becoming increasingly popular in recent years - especially in form of custom vending machines - with consumers and vending machine operators alike. Smart vending machines are ones that integrate new technology in order to enhance the customer experience and improve vending machine sales.
There are a number of features that can define a smart vending machine: internet connectivity, the ability to accept cashless payments, automated refunds in the case of dispensing issues, touchscreens and digital displays, and more. They can even be equipped with contactless ordering technology.
Smart vending machines allow vending machine operators to monitor inventory remotely, track consumer habits, and minimize their in-person contact with their machines to essential services only. Intelligent vending machines are also more user-friendly for consumers and vastly improve their vending experience when compared to traditional vending machines.
Smart vending machines are truly the way forward for the vending industry. Compatibility with artificial intelligence, QR codes, and other advanced tech will only continue to revolutionize the way consumers interact with vending machines and micro markets.
Companion apps could allow users to access purchase history, monitor the availability of packaged food, fresh foods, snacks like chips, and soft drinks like Coca Cola beverages from their favorite smart vending machines, and more, all from their smartphones.
Smart vending machines have a ton of potential when it comes to advancing the vending industry even further; their current capabilities are just the beginning.
How Are Customers’ Expectations Changing?
Since the coronavirus pandemic, American citizens have taken a hard look at their health and found themselves prioritizing exercise and healthy eating habits more than ever. As a result, their expectations for vending machine products have taken a turn. Rather than the traditional junk food and sugary drinks like Coca Cola that dominated the vending industry in the past, they are expecting healthy food and drink smart vending options that can promote a healthy lifestyle while on the go.
In 2019, health-conscious food and drink options only accounted for 7.9% of vending machine products in the US. Post-pandemic, these machines are becoming highly sought after, and vending owners are recognizing the need to update their offerings to adapt to these changing expectations.
Customers’ expectations are also changing when it comes to payment systems. Yes, they're leaning towards smart vending options and credit card payments. It is quite uncommon to find people carrying cash these days, and the ability to pay with a debit or credit card or even a mobile option such as apple pay is a necessity for most potential customers to be able to use a vending machine. Luckily, smart vending technology allows these payment systems to be integrated securely.
The Promising Future: Time to Start is Now
As the demand for smart vending continues to rise on a global scale and the profitability of the industry increases at unprecedented rates, there has never been a better time to start a vending business than right now.
Benefits of Starting Now
Although there has always been a long list of benefits associated with a vending machine business, the current industry is primed for new ventures with a ton of modern advantages. Here's what industry leaders are claiming:
Industry Growth Has Never Looked Better
While rumors have floated around that the vending industry is dying, the opposite is actually true. Industry growth has never looked better, and experts have predicted the upwards trend will continue through 2030 at the least. Getting into the vending industry now, with all of the modern-day advantages and smart vending technology, is a great decision for pretty much everybody.
Easier Management Than Ever Before
Many of the new advancements in smart vending tech have benefited the management side of the business. Inventory tracking tools and automated systems have allowed vending owners to take a more hands-off approach to their business without compromising profitability. Anyone who is getting into the industry now will have a much more streamlined management process than operators have experienced in the past.
Product Range is Incredibly Diverse
Tech advancements have led to a wider variety of vending products in machines than at any other time in industry history. Cold drinks, hot drinks, traditional food and snack options, toys, bulk candy, specialty retail products like branded merchandise, and even niche products such as cosmetics or bicycle parts can be sold in smart vending machines. The wide selection and convenience of the modern-day product range create plenty of opportunities for new vending owners.
Start a Vending Machine Business
Starting a vending business is not as easy as people think. There is a lot of work and planning involved, and success is not a guarantee. Below, we’ll outline the correct way to start a vending machine business and offer advice on how to make money on a regular basis.
Decide on the Scope of the Business
One of the first things you’ll need to do when you begin planning a vending business is to decide on the scope. This will include things like the number of machines you’re going to start with, the types of machines you’d like to include, and what types of locations you’d like to service. Determining your ideal starting point early on will help you budget correctly for machine purchases, stock, and more. Plus, it will illuminate whether you need to consider financing options or not.
Write a Business Plan
A business plan is the hallmark of a successful venture. It will include elements such as market analysis, budget and revenue estimates, action plans, and more. Not only does the process give you a great glimpse into the intelligent vending machine market in your area, but it gives you a fallback for the future when you are ready to expand or when you run into challenges.
Choose a Location
Location is everything when it comes to a vending business. The right location will be secure, easily accessible, relevant to the type of products you’re selling, and (most importantly) will experience a lot of foot traffic on a daily basis.
Some of the most profitable vending locations include hospitals, office buildings, industrial buildings like manufacturing plants, malls, schools, and more. Certain locations will be harder to get into than others, and you’ll have to factor in rental costs and restocking rates as well when choosing the most ideal location(s) for your machine(s).
Buy the Machine(s) & Required Stock
Once the business has been planned out extensively, it’s time to put your money where your mouth is. Vending machines can vary dramatically in price, and you’ll have to find a balance between affordability and machine integrity. After all, you’d be better off buying a $2000 machine brand new than a $500 machine that might need hundreds of dollars in repairs and more frequent maintenance.
Bulk vending machines will be the cheapest, and specialty machines will be the most expensive. While you can purchase your machines outright, there are many financing options available as well to help you get started, including loans, grants, third-party financiers, and more.
Depending on the popularity of your machine, you may need to restock multiple times a week or just a couple of times a month. Either way, buying your stock in bulk from wholesalers is the best way to go. You’ll get a discount for buying in larger quantities without a middleman, and you’ll benefit from higher profit margins as a result.
Set Up the Machine and Follow a Restocking & Maintenance Schedule
Lastly, you need to get the machine installed in its location and set up a restocking and maintenance schedule. There are many companies that can help deliver your machine to its destination safely, and you’ll need to ensure that its placement within the location meets all of the local guidelines and safety requirements.
All vending machines will need maintenance on a regular schedule to ensure they function at peak performance, and while there are many professionals out there to help with these services, you’ll save some money if you purchase the needed tools yourself and learn how to maintain your own machines. As long as you keep your stock full and rotate it properly, your vending machine should perform very well.
Wrapping Up
Across the world, the intelligent vending machine market and vending technology are advancing on a multifaceted front. The symbiotic relationship between sophisticated technological developments, an unprecedented compound annual growth rate, and expanding customer expectations makes this a very exciting time for the vending machine industry as a whole. Whether a vending owner is new to the business or is established and looking for new opportunities, smart machines and other new technologies are the way of the future.
