Making The Most Of Data: Planet Vending is delighted to welcome as our guest blogger Neeraj Bhatia, the Founder and CEO of Kwikpay, of which Kwikvend is a division. Here, he discusses how vending operators can benefit by capturing and applying data in their businesses.
When I travel into the city for a meeting, if I want to have a coffee I have two options: I can go to Costa, or I can go to Nero. The chances are that they are virtually next door to each other, so location isn’t a factor in my choice. Now, I’m not such a coffee person that I can differentiate between a coffee from Costa and a coffee from Nero – excuse my ignorance for that! I struggle: I think it’s because I’m Indian and I’ve had so many spices that my taste buds are totally burnt out! I can’t appreciate the subtlety of one coffee over another.
So, I’ve got these two coffee shops, right next to each other. To be honest, I’ve never stood outside the shops and thought about whether there’s a price difference between the two. I think we’re all like that: we all walk into coffee shops and order our drink, we never ask ourselves ‘why is the latté here 20p dearer than it is next door?’
So, it’s not location, it isn’t coffee quality and it’s not price. The only influencer I have is a Costa loyalty card, which is on my phone. I’ve got £20 of coffee sitting on my app, just because I choose Costa every time. I don’t know if I’ll ever use that £20, probably not; but it just makes me feel good to know it’s there.
When it comes to vending machines, people buy certain things at certain times, often out of habit. For instance, you go and buy a Coke out of a vending machine at lunchtime, because that’s what you do. If there are 2 or 3 options nearby that sell the same can of coke, you start to think, ‘where should I buy mine from?’ If you know that the 5th coke you buy from a vending machine is going to be free, then this plays at the back of your mind. You think to yourself, ‘if I buy just 2 more, the next one will be free’. That’s a good example of making the most of data.
Making The Most Of Data
Now this is all down to data. This is the application of the data that the vending operator has about that particular consumer. Used in this way, as a reward mechanism, apps can be very useful to vending operators.
I’m beginning to see a lot of vending operators are working towards glamorizing the vending industry. The industry has suffered because people have thought of machines as ‘that big box in the corner’, or ‘that thing with no personality that’s kept under the stairs or in a corner on the lower ground floor’. Recently, I’ve seen quite a few concepts where people, for instance, are cladding the vending machine in recycled wood, or banking vending machines together, making something that looks like a single, attractive retail outlet.
It’s thanks to the use of data that these banks of machines can bundle purchases together to offer discounted ‘meal deals’ and once a consumer has made that kind of a purchase, you know you have a ‘lunch’ buyer. So, just before lunch you can reach out to him and say, ‘today’s sandwich of the day is…’, or ‘did you know we’ve just added a new flavour of crisps?’ or ‘we’ve just added a low sugar, high protein drink to our machine, why don’t you give it a try today?’ That’s the power of data: it’s knowing which customer could potentially use your machines to buy lunch and then sending them a text message or a push notification at 11:20, when they’re beginning to think about food. Operators can make all of this happen by using an app.
I know there are some operators who are ‘first movers’ in this field, but it will only really take off when the majority of operators understand that this is something that they can do that will make a difference. Until you’ve done it you can’t see tangible facts, such as ‘by what percentage have my sales increased’, or ‘how many customers do I have that are repeatedly coming back to me?’ There’s a well-known statistic that says attracting an existing customer is 50% less expensive that attracting a new one.
So this is how I see vending operators acquiring data and using it. On the other hand, brands can use data to develop marketing strategies: what age group is buying, how frequently they are buying; which flavours are they buying; how can they be enticed to buy more, or to try new things?
Making The Most Of Data
Another thing that brands always want to have when they launch a product is consumer feedback. A lot of brands spend a lot of money on sampling and getting feedback from their sampling. A vending machine is the perfect place to undertake sampling. The only problem has been that you can’t do a free vend because you can’t get feedback for that free vend. You can, if you use an app… Via an app, you can supply a product for free, on the basis that, in exchange, the consumer has to answer, say, three questions about it. Vending operators can offer this facility to the brands and I’m sure the brands will be happy not just to work with the operators by providing free stock, but also, maybe to pay them; because this is vital data.
I think we’re almost at the point in time where operators no longer have to be convinced that it’s vital for them to harvest data and act upon it. Soon, they’ll be thinking not, ‘should I?’ but, ‘how should I?’
Another Kwikpay story on Planet Vending is HERE
The Kwikvend web site is HERE