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Capturing the Youth Market with Vending Machines, Pt 1

From text messaging incentive programs to advanced consumer analytics, the vending industry is finding new ways to capture a younger audience
 Capturing the Youth Market with Vending Machines, Pt 1
 
 

It seems like if there’s one thing a younger demographic is always compatible with, it’s vending machines – they’re instant gratification personified, allowing kids to grab a quick sugar rush and get on with whatever captures their interests next. But there are always opportunities to improve on the current model, even in the vending industry. Michael L. Kasavana, Ph.D., who is a NAMA-endowed professor at Michigan State University’s School of Hospitality Business and knows a thing or two about the future of the vending industry and new ways it’s finding to capture the youth market.

 

FOOD and DRINK DIGITAL: It seems like the youth market would be a constant for vending machines, but is there more room to capture that market a little bit more? In general, how are some ways that companies are reaching out to a younger demographic?

Michael L. Kasavana: What’s happening is that there are three or four major trends that are going on. One is the enhancement of consumer interface – in other words, getting away from the old glass front machine and making it more of an interactive transaction so that the youth, who are used to shopping and playing games online, can see this more as an interaction that involves a little bit of gaming, a little bit of reward, and at the same time offers the same payment options they have online. If you can use a credit card or a debit card online, if you can use Paypal or Google Checkout, why can’t you do that at a vending machine?

The second thing that’s happening is that the products being sold in the machines are no longer just the traditional chips, candy, and salty snacks, but are evolving toward nontraditional products like energy drinks, upgraded snacking, trail mixes – things that have a healthier connotation. I think that’s also appealing to younger generation, as well as juices and non-carbonated beverages. There’s also been development on the coffee front, with hot beverage machines that produce a cup of coffee that’s equivalent to the same thing a barista would produce in a regular coffee shop. Companies like Starbucks and Seattle’s Best all have dispensing machines now that sell their product, which they claim is as good as if it’s made in a coffee shop. So I think the product interface is also changing in terms of what’s available.

[There’s] also the product information – there’s a movement to disclose nutritional contents in food products. For the vending industry that will soon become a requirement, [and] what some of the vending machine manufacturers now are doing is actually building the machines in such a way that they can actually project the manufacturer’s nutrition label like you’d see on most packages. I think the younger generation seems to be watching what they’re eating a lot more, whether they’re on a special type of diet or they’ve got allergies, and this type of information would be available through the machine itself, either through a search engine where you can search the machine for a product that’s low-carb or gluten-free for example, or where you could simply call up the manufacturer’s label.

The last thing I’d want to talk about is machine enhancement, or the ability to actually have some kind of relationship with the products you’re buying. One thing they’ve never done in vending before is have a reward program. There are a lot of things happening where vending machine operators are seeing themselves more as retailers, and then are trying to use some of the social media and some of the digital media that’s available in the retail space, whether it be location based, in rewards, or some other kind of program.

 

Want more? Stay tuned for Capturing the Youth Market with Vending Machines: Part 2, or check out the full interview in this month's issue of Food & Drink Digital!



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