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. In yesterday's installment, Dr. Kasavana discussed the potential of social media technology the vending machine industry. In today's final installment, we get into real world applications and new projects still under development.
FDD: There has been some tension between the vending industry and school campuses, do you think that’s easing up?
MLK: I know there’s been some finger pointing of people saying vending machines are causing obesity. A lot of school systems rely on revenue from those machines to supplement clubs or athletic teams at the schools, so what some schools have done is they’ve compromised and covered the machines up or made them inaccessible when the cafeterias are open. A lot of school systems have asked that at least 50 percent of the products in the machines be [NAMA Fit Pick certified] or be labeled as healthy snacks. That’s one kind of a compromise. What they found out was that the items that sell the most are unfortunately not those items, and in some cases where the machines have gone to 100 percent healthy items, they’ve found that the kids after school go to the convenience store and buy the products they would have bought before. It’s hard to tell the cause or effect of the problems, but to blame the fact you have a machine doesn’t make a lot of sense. I think we have to educate people in terms of what they’re purchasing and how much they’re purchasing and consuming if we’re going to make any headway in that marketplace. I do agree that putting different content in the machine of items that are popular like trail mixes seem to be catching on at least in general, so vending machines may contribute to the solution rather than be the problem in the long run.
FDD: Are there any new innovations on the horizon that haven’t been introduced yet?
MLK: I think most of the innovations are things that we’re just on the edge of, like using consumer analytics and changing the mix that’s in the machine based on daypart and consumer profile [or] making it easier to make a purchase. People think cell phones could become the e-wallet. While the mobile platform hasn’t been standardized yet, once it gets standardized I think one of the industries you’ll see really take off in terms of cashless sales will be the mobile vending industry, because of the convenience. Even when I go to Starbucks now, people might just be buying a cup of coffee and use a debit card. People are always surprised to find out that, with those vending machines that take credit cards and debit cards, three-quarters of the transactions are charged to a debit card. So what happens is that you have a large volume of debit transactions – when you have your e-wallet or your phone, those kinds of transactions can be made even quicker. That’s really an advantage, because I think one thing Generation Y is famous for is trying to control the transaction themselves and making a very quick completion of the transaction. We’re trying to increase the interaction in a quick, accelerated way, so that they can feel comfortable to make a quick purchase and get on with it.