Automatic Merchandiser - 17

businesses. Operators can capitalize upon the popularity of loyalty
programs by offering them at micro
market locations, rewarding customers
who shop there regularly.
"Anything that affects consumer
engagement, mobile engagement, loyalty
and data-driven promotions is driving
this [trend]," said Joe Hessling, founder
and CEO of 365 Retail Markets.
Hessling noted that 365 recently
launched its 365 Pay app, giving
consumers a more streamlined shopping experience. He said that communicating with operators, managing
loyalty, receiving promotions, making
purchases and reviewing past purchases has never been easier for the end
user. The app also helps operators run
their business more efficiently, quickly
attending to customers' needs.
"The requests for features related to
efficiency and consumer engagement
are a daily occurrence," Hessling said.
"Operators are embracing the changes
and running with them for longer
contracts and better sales."
Malcolm McAlpine, business
manager, branded snacks and confections at Mondelēz International, said
that Mondelēz sees value in marketing,
promotions and loyalty programs for
micro markets.
"This year and continuing into next
year, we are focusing a lot more sales
and marketing efforts on micro markets to keep up with the trends and the
growth of the segment," he said. "We
will also promote aggressively to the
micro market consumer, with bundling
and loyalty programs."
SMALLER LOCATIONS
HAVE BIG POTENTIAL

While micro markets were initially
envisioned for larger office environments, compact point-of-sale systems
and space-saving design solutions
have allowed operators to expand into
smaller locations, which can be surprisingly profitable.

"When we first started, we felt that
the micro market 'sweet spot' had a certain threshold for sales and populations
and locations," explained Jim Brinton,
CEO at Avanti Markets. "And now,
operators are having to take a hard look
and say, 'Maybe those smaller locations
actually make financial sense as well.'"
Hessling added that 365 recognized
the demand for smaller point-of-sale
systems, tablets and mobile-based
options through the 2017 launch of
their nanomarket™ kiosk and their
forthcoming PicoMarket.
"Our nanomarket™ has gone from
launching in 2017 to our second bestselling product in 2019," he said. "We
have been working diligently on the
PicoMarket, which is the perfect fit
for operators that want to be on one
back-end system throughout all of their
locations, big or small. The PicoMarket
can be utilized as a standalone pointof-sale in a connected campus setting
or simply placed on individual vending
machines or coolers."
Michael Kasavana, NAMA endowed
professor emeritus and hospitality
business consultant, concurred that the
nanomarket™ helped operators effectively monitor and control "marketplaces geared to smaller populations."
He added that enabling consumers
to scan and purchase items through a
virtual shopping cart with their smartphones is not only ideal for smaller
locations, but also provides a convenient
"uninterrupted departure" for end users.
Steve Orlando, co-founder and
chief business development officer at
Fixturelite, advised that just because
a location is small doesn't mean that
operators should forego retail design
elements in these previously overlooked spaces.
"It's as important to invest in the
small spaces as it is the larger spaces,
and that is why we designed solutions
for spaces large and small," Orlando
said. "Increased sales revenue correlates
to the experience an operator creates

in the retail space and that doesn't
typically change simply because the
audience is smaller. We've seen where
operators look at a small space with less
than 100 people and say, 'I'm not going
to invest in that because it's only 100
people.' But if they design a destination
that draws shoppers in - while using
technology that makes sense - they
might see that untapped location generates revenue equivalent to a 200-person location."
CONSUMERS WANT VARIETY

In addition to carrying the traditional
food and beverage items consumers know and love, operators need to
expand offerings with better-for-you
products, fresh food and a larger selection of snack and meal options.
"Another trend in micro markets
is the diversity of what's being offered,
whether that's different variations and
types of product, new and more flavors,
or multiple packages and sizes," McAlpine said. "It's all about options and providing an assortment that consumers
can choose from. While consumers do
still enjoy that traditional sweet or salty
snack, they are more health-conscious
and also want snack options that they
see as better-for-you."
McAlpine said that Mondelēz
Foodservice has responded to this
trend by making a large assortment of
snacking options available to operators
to meet their consumers' demands.
Mondelēz also assists operators by
identifying snacking trends and habits
that impact their target markets.
"We ensure that we're making
operators aware of trends as well as the
different snacking habits and preferences of the different demographic
cohorts so that they can source and slot
the appropriate products," he said, adding that manufacturer competition for
slots in micro markets has also become
more intense.
"Because it's such an attractive segment, this competition will continue

October/November 2019 * VendingMarketWatch.com

17
http://www.VendingMarketWatch.com
Automatic Merchandiser

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