Canadian Healthy Vending Identifies the Top 7 Trends in Vending for 2014

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Edward Thompson—Vice-President of Canadian Healthy Vending, Canada's top manufacturer and distributor of healthy vending machines—looks at how current trends will affect operators of snack vending machines in 2014.

Max Canadian Healthy Vending

Canadian Healthy Vending

The days of a vending route operator showing up at a location dragging a huge dolly loaded down with something of everything, a coin bag and a notepad are over.

2014 represents an unprecedented year of change for the Canadian vending industry. Canadian Healthy Vending has looked at the major trends that will drive change in the industry in the next 12 months and beyond. The vending industry has survived for many decades with only minor changes. Customers placed coins into low tech vending machines and received a candy or a snack in return. The type of items vended were limited by the coins customers carried in their pockets and no one cared too much about the products that were dispensed. Modern payment technologies and the transformation of vending machines from simple mechanical devices to sophisticated computers with advanced communication capabilities and digital displays has now become the new reality for vendors who wish to meet the demands of their customers. We have identified seven major trends that all participants in the vending business will need to follow in 2014.

1. Government legislation for healthier snack options in vending machines

As public awareness of the advantages of a healthy diet in the prevention of many common diseases and conditions including obesity, diabetes and wheat allergies grows and technology advances, new pressures on vending operators have emerged.

Jurisdictions at the municipal, regional and provincial level continue to legislate changes to vending in public facilities. As vending at schools, hospitals and community centres is increasingly focused on healthier snack and drink options, this wave will reach even more public buildings and soon healthy vending will become the standard adopted by larger private companies and forward-thinking small firms.

2. Consumer demand for vending machines to meet their specific dietary needs and personal snack preferences.

Operators of healthy vending machines are increasingly called on by individuals and groups to stock snacks to suit specific dietary needs as well as personal preferences. Gluten-free, dairy-free, low-sugar, vegetarian as well as organic snack options continue to make strong strides in the vending arena. Vending operators will be wise to consider these demands or face customers turning away from their machines.

3. Interactivity

Technology has pushed the demand for interactive vending services. Touch screens, smartphones and social media have changed the way consumers interact with all devices, including vending machines. As consumers call for greater variety and healthier products, vending machine operators now have new and innovative technologies to help meet those demands. These technologies bring the voice of the customer to the vending operator instantly.

4. Remote monitoring

The days of a vending route operator showing up at a location dragging a huge dolly loaded down with something of everything, a coin bag and a notepad are over. In the past, operators had no idea about actual sales until they arrived at the location to take a look inside the machine. With remote monitoring, vending operators can have access to their total sales, the sales of each snack selection as well as a breakdown of cash and cashless sales, all from off site. Remote monitoring has the potential to match product ordering with actual sales in a way that was never possible in the traditional vending world. It takes the guesswork out of the equation and so reduces the chance of stocking machines with products consumers don’t want to buy.

5. Cashless sales

Cash represents a decreasing share of retail purchases in Canada. Debit and credit sales accounted for over 80% of retail transactions in 2010. Canadians are used to carrying less cash and expect to have a cashless option for most purchases. Near Field Communications (NFC) is the technological innovation that has opened the door to credit transactions in vending machines. A subset of RFID (the technology that allows wireless transmission of data in everything from your passport and drivers license to anti-theft tags on merchandise), NFC is increasingly found on many smartphones and payment cards.

The use of credit is becoming an established form of payment in the vending industry. Recent touchless credit card technologies like MasterCard PayPass and Visa payWave, which use NFC-based systems, give consumers an even faster and more secure experience.

Industry analysts and insiders expect that the real game-changer will be the widespread introduction of NFC-enabled debit cards. The roll-out of Interac Flash cards, using a new contactless debit technology, is expected to be complete in 2014. Interac, the dominant player in the Canadian debit market, has been in negotiations with major vending payment device manufacturers to offer consumers this debit option at vending machines. Devices are expected to be available to vending operators and manufacturers in the coming months. By the end of 2014, it’s expected to be an option for most retail purchases.

6. Mobile Payments

Another huge opportunity for the vending industry is the emergence of Smartphone payment systems for Canadian customers. A payment option that did not exist a few years ago, mobile payments promise to capture a significant portion of the market over the next few years. Although still in its infancy, vendors would be wise to include mobile in their future plans. One indication of the growing appetite of Canadian customers for this new technology, is the surprising success of mobile payments at giant coffee retailer, Starbucks. Eleven percent of sales at their locations now use their proprietary mobile payment app.

In Canada, there are already two significant contenders in the field. Rogers/CIBC have teamed up to offer a mobile payment system using Rogers’ NFC-enabled Galaxy and Blackberry phones in conjunction with a Rogers’ NFC SIM card. This solution is available now and Rogers has recently announced plans to introduce the suretap wallet that is separate from the CIBC plan and will allow payments from any bank in Canada and work with many different cards.

The RBC bank and Bell Mobility are also testing a mobile payment solution which will likely be rolled out in early 2014. This will be similar to the CIBC/Rogers Wireless plan (including a similar set of phones), but in addition they have announced they plan to extend the solution to other banks and financial institutions in the future. Eventually, they will also support other NFC-enabled phones from Sony, LG and other brands. RBC/Bell have also tested Interac Flash debit payments with their solution – a very exciting development and a sign of the new world of mobile payments for Canadian vendors and consumers.

7. Higher value items made possible by cashless vending and remote monitoring

High value items have been available in vending machines on a limited scale and, like the iPhone vending machines, are more about product placement than a viable sales channel. The introduction of secure debit and credit devices, mobile payments and interactivity have now created an opportunity for vendors in every market to look at the possibility of offering customers the kinds of high value items that would have been unthinkable a few years ago including makeup, gourmet snacks and electronic accessories.

The convergence of these closely-related trends offer vending operators and manufacturers new opportunities and new challenges. We expect this wave to push vending operators to rethink their current strategies and examine their equipment purchases to meet the demands of consumers for more choice and a better experience.

Canadian Healthy Vending is a Vancouver-based vending equipment manufacturer and distributor with over 23 years experience in the Canadian vending industry and is the manufacturer of the Max! Healthy Vending Machine. Our Mission is to get healthy snacks and nutritious drinks into the hands of Canadian workers and students in every city and province across the country. The state-of-the-art Max! Healthy Vending Machine features both cash and cashless payment systems in addition to a high resolution display monitor, which provides nutritional information on product offerings, and information on community health initiatives. To get more information about Canadian Healthy Vending or to get a Max! Healthy Vending Machine at your workplace visit the Max! website.

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