Snacks at the railway station, passport photos at the airport or cigarettes around the corner – vending machines are in many locations. They offer their products around-the-clock and without the usual opening hours. Public vending, the sale of goods from publicly available vending machines is a market with a lot of potential.
Most of the time, you can buy goods, snacks or beverages at the vending machine for little money, but it does not have to be that way. You can also buy gold at the vending machine. ”Gold to go“ is the name of the product by the young German company Ex Oriente Lux AG from Reutlingen. Right now, the company has 23 gold vending machines in Germany and 13 abroad, four of which are located in the United Arab Emirates and one in Las Vegas. You pay by credit card. The distributive channels of the precious metals trader that also buys gold and stores it for customers, are the Internet, brokers and the gold ATMs where you can purchase gold in the form of bars and coins of certified quality just like you would buy a packet of cigarettes.
”The primarily envisioned target audience of gift and souvenir shoppers has now been extended by an increasing number of small investors“, the company says. ”Compared to many banks, the vending machine offers immediate availability. The pricing is updated in real time and is generally lower than what the banks charge. For amounts below the limits of the Money Laundering Control Act, the gold vending machine facilitates an anonymous purchase and offers a maximum amount of discretion.“
Being well stocked guarantees availability
Shopping around-the-clock, anonymously and at great prices – something all automated teller machine operators promise. They can only dream about online connectivity for their equipment. Primarily those customers, who did not receive their goods or have trouble with the coin slots, report failures. They angrily call up the service phone number listed on the machines. Since the advent of cell phones, this is easier than it used to be. The operators contract vending machine servicers; so the failure rate significantly depends on them. If they work meticulously, always refill change and sort the items in the correct compartments, there are fewer phone calls. In contrast, technical defects or vandalism is less frequently the cause of troubles.
German Railways has a key role
Zölls from Langenzenn, Fürth district, is one of a handful of operators, who has been awarded a contract by German Railways (“Deutsche Bahn”). Every few years, German Railways issues an open call for awarding vending machine locations, but requests that not just the attractive central railway stations are being serviced in the respective region, but also smaller railway stations. Some operators have already serviced their regions for decades. German Railways sees the snack, soda and photo vending machines as a contribution to improving service quality and is currently testing a pizza vending machine in Frankfurt.
German Railways collects basic rent plus commission from its vending machine operators. As a very large contractor in Germany, it can easily ask for this. Other business partners, for example, schools, cafeterias or hospitals have to drive a hard bargain: rent for the vending machine or rent for the location, profit sharing – a lot is possible in the industry sector.
Cigarette vending machines face increasing opposition
According to the Federal Association of German Tobacco Wholesalers and Vending Machine Operators (“Bundesverband Deutscher Tabakwaren-Großhändler und Automatenaufsteller”), there are about 380,000 cigarette vending machines in Germany. A turning point was the tightening of the Protection of Young Persons Act: as of 2009, the equipment was converted from cash to paying with a money card to ensure age verification. In isolated cases, the identification card or EU driving license can also be used. The industry sector complains about the gradual increases in tobacco tax. The equipment manufacturers have to look for new sales opportunities.
Example Azkoyen: the Spanish vending machine manufacturer Azkoyen expands its portfolio and joins the business of merchandise vending machines. The customers pay at the cash register and then scan the printed barcode at the vending machine where they will receive the merchandise. Vensafe from Norway has been on the market with these machines for a while. Azkoyen has tested its equipment in Sweden and introduced it for the first time at EuroCIS 2012. In an iXtenso interview, sales- and marketing person Juan Luis Ayo talked about the new business segment.
Cigarette machines can also be used for other products. Many bicycle retailers offer Schwalbe bicycle tubes even outside business hours in front of their stores. One thousand blue vending machines are installed all over Germany, in parts also freestanding in the city or at busy bike paths, operated by local specialty retailers. The bike tube vending machines are not just for sales at night or on the weekend, when customers are on bike tours; of course they are also an advertising space.
First indoor vending machine Café
Coffee specialties from vending machines are becoming more and more popular. Gone are the days when there was only one type of instant coffee with hot water in a plastic cup. For some time now, there have been creations for Espresso, Latte Macchiato or Vanilla Cappuccino. Hot beverage vending machines are a focus at CoffeeFreak from Offenburg. The company that also offers vending machines for snacks and soft drinks including complementary products, services corporate clients, medium-sized companies and small businesses as well as offices and government agencies nation-wide.
In February, CoffeeFreak Managing Director Markus Ehrlacher opened up the first German indoor vending machine Café in Offenburg. The new and daily opened Café offers coffee in many different variations, but also teas, cold beverages, soups and snacks. It serves as a showroom for innovative vending machines at the same time. Ehrlacher is a Level 2 certified barista and a “Latte Art Worker” of the “Vienna School of Coffee”. He turned his passion for coffee into a business. For the price of one troy ounce from the gold vending machine, you could try the entire selection of coffees in Offenburg.
René Schellbach, iXtenso.com
01/06/2012
