The role of micro markets in the post Covid-19 era

With the widespread closure of offices and educational facilities globally due to the pandemic, are micro markets set to play a major part in the retail sector post-Covid 19?

Gone are the days of the metal box that merely dispensed sodas and an array of snacks and confectionery.

Technology has ushered in a new age of smart vending machines with contactless and cashless payments, touchscreen, smart customer interface, and broadening product lines.

From pizzas to burgers, fresh produce, skincare and makeup, and more recently, masks and sanitizer, this way of distribution shows no sign of slowing down as a way for the public to access products on the go.

Why vending machines?

As a way of distributing your product, vending machines offer the flexibility and ease of an on-site location without the additional costs of a large bill for retail space or employee salaries.

Offices, colleges, schools, metro stations, gyms, airports, and micro-markets are all hot spots offering high volumes of foot traffic to give your product brand the traction and exposure it requires.

More importantly, you, as the business owner of the vending machine, are in complete control. From preparing machine settings from home and uploading them digitally, you can change product pricing, offer discounts, custom messages, and so much more.

In addition, most smart machines offer daily reports sent directly to you, giving you a comprehensive breakdown of the previous day’s activity and what items need restocking.

What type of vending machine will suit your business model?

The success of the modern vending machine lies in its product offerings. But what sort of vending machines make a great catering alternative?

Healthy vending machines

As a society, we are more health-conscious than ever due in part to the pandemic. Healthy vending machines are the answer, offering a mix of healthy drinks, freshly prepared entrees, and side dishes and snacks.

These vending machines are tamper-proof with an industrial locking system, eco-friendly, offer remote monitoring, smartphone payment technology, and vending management software.

Add on smart optional extras such as a side vending unit, which offers a real minute in minutes, and the scope becomes endless.

Coffee and soda vending machines

These vending machines are equipped to meet consumer beverage requirements. Be it bean to cup or instant coffee, freshly brewed tea, hot chocolate, or soda.

Frozen vending machines

Offering frozen foods kept at the right temperature, packaged to be microwaved, and then consumed, the variety of frozen offerings is wide.

The downside of these units is that they will require more maintenance due to their refrigeration components.

The rise of the micro market

The concept of micro markets has been around since 2000, and over the years, evolved into what it is today. By utilizing smart vending machines, open shelves, freezers, and coolers, customers can grab and go by using a self-checkout kiosk to pay for their products.

A single micro market can easily carry up to 400 products and cater to consumers’ diet restrictions by stocking gluten-free or low carb offerings. Micro markets are also becoming a healthier and more attractive alternative for many in-house canteens and catering facilities. More so now that the pandemic effects have heightened the public awareness of safety protocols that need to be in place. By being cashless and contactless, the micro-market segment has grown exponentially.

According to Grand View Research, the global vending machine market size was valued at USD 30.30 billion in 2018 and is expected to register a compound annual growth rate of 9.4% from 2019 to 2025.

In fact, every minute, over $79 000 is put into vending machines in the US alone. That’s $115 million dollars a day.

Other retail sectors

But it not just the food and beverage sector that has taken to offering their products via the use of vending machines.

Other retail sectors such as gyms vend headphones, jump ropes, weightlifting gloves, and pre- and post-work out products, while hotels offer phone chargers, razors, shaving cream, and personal items people may have forgotten when traveling.

Educational facilities such as colleges, schools, and libraries will benefit from vending machines that offer office supplies such as pens, UBS flash drives, notepads, pencils, and sharpeners.

But one of the most significant increases in the vending market has been for personal protection equipment due to rising healthcare demands for face masks, gloves, sanitizer, and thermometers in light of the pandemic.

To franchise or not

Like any other business opportunity, before buying into the growing micro market industry, you will need the tools and knowledge of running a business. A thorough investigation of your specific market niche and how you will dispense your product to consumers is required.

So, what business choices do you have in the vending machine market?

Buy an existing business: This will save you time as you acquire machines that are already established in proven routes. But the start-up costs are higher.

Starting from scratch: This option is perfect if you have proven business experience and lots of sales. It does require a significant investment of your time but is the cheapest route when it comes to start-up costs.

Franchise: If it’s a turnkey solution you seek, then a franchise is your best solution. The only drawback is that it requires a greater initial investment and an ongoing royalty fee. While it may present a good opportunity for some, it may not be the best answer for every entrepreneur.

And so, to the future

If one good thing came out of 2020, it was the emphasis and importance of hygiene. Micro markets incorporating bespoke vending equipment in purpose-built hygienic environments offered the perfect solution to a society looking for a contactless and cashless retail experience.

As one of the fastest-growing segments of the food service channel, micro markets in the US grew 574 percent from 2,642 locations in 2012 to 17,808 in 2016. And this number is projected to double to 35,000 by 2022, according to research firm Bachtelle and Associates.

The future of the micro-market looks bright for this grab a go generation.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes