A&B Vending Tests The Waters With Mobile-App-Based Market For Small Accounts

Mobile-app-based technology has enabled the development of self-serve markets that do not require vending machines or payment kiosks. Consumers simply scan and purchase products using their mobile phone. The apps provide access to a wide variety of product, allowing users to touch the product and not have to deal with any of the mechanical issues associated with vending machines.

A&B Vending Co., Inc., a Middleton, Mass.-based vending, office refreshments, foodservice and micro market provider, has offered one such system, the Verii Market, for several months. A&B Vending is among a growing number of refreshment service operators who view the mobile-app-based system as a possible solution to the longstanding challenge of serving small locations profitably.

This kiosk-less micro market is similar in some ways to what historically has been referred to as a “self op” vending account. The location orders the product from the vending operator and sells it to the employees. The vending operator delivers the product to the location.

An online product catalog allows the location to customize its market product offerings to the needs of its employees. The location manager reorders product online, and the system automatically tracks the location’s inventory and sends alerts when inventory is low.

“Once they place the original order and everything goes well, the profit from the sales gives the funding to replace the orders, and in theory, it becomes self-sufficient financially,” said Erich Markee, A&B’s vice president of operations.

A&B’s website describes the Verii as an option for accounts with less than 150 employees. Prospective customers are instructed to go to the Verii website and create an account.

A&B, being a Canteen franchise, already worked with 365 Retail Markets as its micro market provider. 365 Retail Markets is Verii’s parent company. Visit www.Verii.com

Customer Education Needed

A&B’s experience with the new technology demonstrates the concept requires customer education.

A&B first offered Verii as an option to accounts not large enough to justify full-size vending machines, Markee said. The offering marked A&B’s first attempt to provide an alternative to vending for small accounts.

Initial customer response to the Verii initially was not great since companies did not want to take financial responsibility for the first order, Markee said. The location is responsible for any products that employees don’t pay for. “They didn’t want to suddenly take on any responsibility,” he said.

Businesses in general are used to assuming the financial responsibility of ordering office refreshment services and their office supplies, Markee said, but when it comes to vend products, they are reluctant to take on the responsibility. “They didn’t want anything to do with ordering their vending (products) since they never had to,” he said.

A&B explained to customers that the system is designed to be easy to use. The customer places orders as needed, and A&B delivers them and places the products on the shelves and in the cooler.

A&B told certain customers – vending locations that were marginally profitable – that the only option to the Verii Market was to have the vending machines removed.

A&B has also offered the Verii Market to new prospects that have the right customer profile.

A&B’s first Verii Market account was a location with around 60 employees. An A&B sales person solicited the account, then referred the account to Verii, which in turn arranged to have A&B service the location. Verii supplies the cooler and the shelves, which A&B installs.

“If we have somebody who’s interested, we pass them on to them (Verii). They’re the closer. It’s their customer; we’re just distribution. Verii’s the first line of contact, not us.”

“The customer places the order through Verii,” he said. “Verii invoices the customer for product. The customer takes the revenue that they generate from the sales and applies it towards their purchases. They own purchasing the product. They own spoilage. The customer owns all the shrinkage.”

“We install the cooler, put the shelving up, and we fill it and give them the first invoice,” Markee said.

“If the sales are good, the shrinkage is low, and the margin on the product that they (the location) marked up is there, the program for the client is self sufficient because the profit pays for the next order,” he said.

A&B Vending is still servicing its first Verii customer. The company got its second Verii account in June, and its third one in January.

Vending Routes Service Verii Market

A&B vending routes service its Verii Market accounts.

“Piggybacking the vending drivers in the building or in the area was one of the aspects that made the model profitable for the operator,” Markee said.

Markee takes a long view of the concept. He recalls that when micro markets were introduced, many clients did not immediately warm to the concept.

He said it might be better if the vending operator covered the cost of the Verii Market inventory rather than expect the location to cover it. This could make sense for the vending operator provided there isn’t much loss due to employee theft.
The vending operator could accept a small amount of shrinkage. If the shrinkage exceeds a certain amount, the location would have the option of paying the loss or losing the service. “It’s kind of like going back to the old honor box,” Markee said.

The system would still be 100 percent mobile pay, he noted.

“I think we have to do some testing and see if we own it, how it goes,” he said. http://www.abvendingco.com/

For more information go to: https://verii.com/ or call 844-VERII-ME (1-844-837-4463)

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