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Aug 29, 2019
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Unattended Retail

3 Ways to Make Micro Markets Profitable with 50+ Employees

 

A few blog posts ago, we covered the 5 capabilities most operators need from their micro market systems (view blog post ). Today, we will be looking at our favorite tips from our recent webinar with Mike Cascione Jr. (CC Vending), Michael Johnson (Yoke Payments), and Ben Mills (USA Technologies) on how to make micro markets profitable at locations with only 50 or fewer employees, as well as explore different strategies to maximize your markets’ efficiency.

Cutting Costs 

When implementing a micro market in a location with fewer employees, it is crucial to keep initial investment and operating costs low. Below are three key steps for cutting costs:

1) Service Sections Individually

Servicing your sections individually allows you to only attend to the sections that actually need service and skip the ones that don’t. Instead of restocking every snack rack and cooler during a service stop, focusing instead on whether individual sections need service will reduce the total time your driver needs to spend at a location, and also keeps the micro market better stocked. 

2) Going Cashless

Going cashless removes the chance of any cash mishandling from drivers and prevents mishaps such as bill jams and miscounted money. Mike Cascione Jr., Operations Manager at CC Vending recounts, “Operators can testify that some drivers out there have sticky fingers, and catching that is something that you put a lot of time and effort into. Not dealing with cash is awesome, because you keep that driver honest. Another thing is it costs money to count money. Going cashless makes the money room cheaper…If I can save $40,000 with one less employee [counting money], that is awesome for us.” 

3) Partnering with Suppliers

Lastly, partnering with suppliers is a great way to look beyond traditional vending products and offer local favorites to your customers. Fresh food is one of the biggest selling categories, so consider sourcing seasonally fresh produce in the cooler section of your micro market. Additionally, Cascione Jr. touches on the idea that by partnering with suppliers to promote their products, the suppliers often will pay a slotting fee for a certain number of facings for their product. This is a great opportunity to cut costs and for customers to experience a more diverse product mix. 

Increase Revenue

Increasing your revenue goes hand in hand with cutting costs when trying to increase profit, and it is also a key strategy when implementing a new micro market at a smaller location. Here are some of our best tips when trying to boost your top line:

1) Determine the Right Product Mix

Knowing your customer base and what they want is key to maximizing every inch of valuable space in that micro market. For example, over the last few years, operators have been adding healthier snack items due to the rising trend of a healthier lifestyle. Cascione Jr. says, “People want healthy. The data helps you understand what you need to place in these locations. We try to do a 60/40 split. 60% of our snacks are market value products, such as Snicker bars, and 40% are healthier items. In the last two years or so we see that consumers are willing to spend $2.55 on a Kind bar, instead of just $1.69 for a Snickers bar.” Adjusting your product selection to match consumer preferences can increase revenue dramatically.

2) Grand Openings

Hosting grand openings is a great way to build hype and interest around a new micro market. Make this an exciting event for your client and their employees— consider ribbon cutting, sample stations, and raffling “market bucks” to incentivize employees to engage with the new micro market. This is also an excellent opportunity to sign people up to loyalty programs in the app. Michael Cascione Jr. mentions, “At grand openings if we can capture 30- 40% of those consumers to sign up on the app… that’s great. We want to capture everybody on the phone, because once they are on the Yoke app they are embedded on our system.” Of course, don’t forget to properly promote the event for this big day with promotions and advertisements. Build the excitement, because you only have one chance to do so!

3) Merchandising Premium Items

Including premium items in your micro markets can draw in more customers and bring in more revenue. Many customers will not necessarily pay attention to the slight price difference when purchasing something from a micro market, so use this opportunity to bring in higher priced, premium products. Make sure that your premium items are displayed at eye-level for consumers. Items like salads or sandwiches should be located in the center of your fresh food cooler, so that people to see these first and ideally drive them to a purchase.

Leverage Software Efficiencies – USAT’s Seed Markets

Software integration can help boost revenue, cut costs, and open new locations faster. 

With USAT’s Seed Markets software, operators can simplify their work by standardizing on a single set of tools for route scheduling, warehouse pre-picking, and reporting.

1) Open New Locations Easier and Faster

When opening a new micro market location that utilizes Seed Markets, many things during set up will be almost identical to previous vending machine and micro market locations. For example, planogram entry and driver training are both the exact same in Seed Markets equipped micro markets as they are for a vending machine. This allows you to expand to new locations faster and easier.

2) Optimize Route Management 

With USAT’s Seed Markets software, operators can manage their scheduling for vending machines and micro markets all in one system. Additionally, schedulers have the ability to schedule vending and market stops in a single route. As a whole, this allows for operations to only have to learn and manage one system instead of multiple and allows for far better schedule optimization. In the same web-based interface, operators can use Dynamic Scheduling to plan out their routes which will avoid wasting valuable route labor on markets or sections that don’t need service. 

3) Consolidated Business Reporting

Lastly, Seed Markets makes back office operation reports, financial reports, and operational reports far easier to run, since all your business verticals can be consolidated into a single interface. Instead of having to guess how your business is doing by trying to compare reports from two or more systems, Seed Markets brings all this information into one reporting system.  

Through this blog, we touched on the different ways to successfully integrate a micro market at a location with fewer employees. Implementing them in a smaller break room or work campus can bring in high revenues if you focus on lower cost micro market options and boosting per employee spend with targeted products. Software integration with Seed Markets significantly simplifies micro market management, which can boost revenue, cut costs, and allow for openings of new locations faster. To learn more about our software services, click on the link to Contact Us today!

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