The BrainSTEM Toolbox increases ROI
If you’re thinking about upgrading your traditional vending machines to become smart vending machines, do you see it as spending money or investing money?
Operators sometimes hesitate to upgrade their equipment because they don’t think they can afford the “spend”. If you knew that the money allocated to upgrade your technology was going to come back to you quickly like a boomerang and then continue to multiply, would you do it then?
Upgrading the technology platform your business runs on is widely considered to have an ROI or “return on investment” because what you spend comes back to you quickly and continues to strengthen your balance sheet. Assuming that your cost of goods remains the same, there are two areas where you can start keeping more money in your jeans.
- Increase Sales
- Lower operating costs
Let’s unpack these points and see how a Brain STEM Toolbox can start to bolster both areas.
Smart vending increases sales
Let’s talk about sales conversation. It’s a well known statistic that 70% of people who start to check out in an online store don’t complete the transaction. Sometimes they have buyers’ remorse, or they’re interrupted during checkout or the shipping cost puts them off. Though traditional cash-only vending machines don’t track lost sales, just for fun, we can look at an ROI to upgrade your machine based on an increased conversion rate.
- Let’s assume a traditional machine does $30 per day
- Assume that of the potential sales 70% are lost because the machine is out of stock on a favourite item, or doesn’t dispense the item properly or even because the customer has questions about the product they have nobody to ask.
Therefore, $30/day current sales should be $100 so a machine that’s making $210 per week could be making $700 per week.
If you’re saying “Ah, come on Brad – $700 per week is pie in the sky” then we can still look at the upside of capturing even a fraction of that. If the sales increase by only 10% more ($40 per day) then revenue now increases by $70 to a total of $280 per week and ($70 x 4 weeks) = $280 extra in sales per month.
Upgrading a traditional cash-only machine to become a Brain STEM Toolbox will cost $5000 at the most.
The cost of upgrading to a Brain STEM Toolbox will be paid for by a 10% lift in sales in just under 18 months.
After that – the rest is gravy. That $280 per month goes directly to the bottom line and bolsters your profitability by $3360 per machine per year.
The benefits don’t stop there however, because the Brain STEM Toolbox also helps you streamline your operations so you save on labour and have better information to let you understand your customers.
Smart Vending makes operations more efficient:
- Collect data on sales and customer queries. The Brain STEM Toolbox can measure foot traffic, how many buttons are pressed before a purchase and what questions are asked about the products. This allows you to better understand what products and messages to feature.
- Collect transactional data such as how many items are purchased per transaction and sales per day as well as time of day.
- The Brain STEM Toolbox can notify you when inventory in the machine is getting low so you can restock it before it runs out and avoid lost sales.
- The Brain STEM Toolbox takes cash and electronic payment and will capture sales that might be lost because the customer doesn’t have any coin handy.
- Cash handling takes time so you will save labour hours to move to a more electronic model.
- The Brain STEM Toolbox allows the customer to look at the product, unpack it, ask questions about it and view video if appropriate. Research shows that sales increase by double digits when they see a video prior to buying.
It’s hard to add up all of these benefits but if we make a few assumptions as to even the increase in sales to have a video component that $30 per day could end up increasing to $50 or $60 per day by combining increased sales and savings operationally.
At $20 more revenue per day you’ll get $140 more per week and $560 more per month and pay back your investment in less than 10 months.
If you have a fleet of machines then upgrading all of them at once can be a big expensive proposition. A great approach may be for you to take one or two machines as a “proof of concept” and measure the sales lift and operational savings to gauge what the pay-back on your investment will be.
According to Talk Business magazine people spend more at a cashless machine. The average sale is about 25% higher than seen at cash-only vending machines. There are 7 million traditional vending machines that still only take cash and dispense the products without the benefit of technology. Those machines are essentially “blind”. They can’t see who’s using them or how much is being spent at a time or know if product is out of stock. Older machines take money and drop product – full stop.
A smart vending machine becomes much closer to being an employee than a piece of equipment. Employees cost money and are somewhat unpredictable because – they’re human beings with their own lives and goals. A smart vending machine gives you the eyes and ears of a team member but is a machine and therefore much more predictable. A smart vending machine will help you keep head count down by automating many functions normally handled by your team like cash handling, inventory counting and customer service. Technology lets you let go of the mundane, repetitive duties so you can focus on the strategic aspects – the ones that really take your business to the next level and make you a happy camper.
SMRT1 Technologies can take a vending machine of any vintage and make it a smart vending machine for a very reasonable cost. We’ll help you create a shopping experience that makes life easier for your customers and your business.
It just seems like the smart thing to do.