Adopting an innovation mindset has been the vending business’ saving grace in tough economic times.
In fact, with a global recession and an ongoing war and cost-of-living crisis across Europe, all following a crippling pandemic, innovating has been critical to staying ahead, says Paul Hearne, the U.K. and Ireland managing director at Selecta Group, the leading unattended self-service provider in Europe.
Related: Necessity Is the Mother of Innovation in UK’s Vending Machine Sector
“We’ve found that the way that you get over [these challenges] is you innovate […],” Hearne told PYMNTS in an interview, adding that it boils down to “how you pivot your business to take advantage of the situation that you find yourself in.”
Operating in a food and drinks market where “there’s no shortage of demand for our products” cannot be underestimated either, Hearne added, pointing to that advantage as an edge they have over other sectors in overcoming these unprecedented times, while putting digital at the heart of their strategy.
The smart fridge offering — Selecta began rolling it out across all its European markets in early 2021 — for example, is one of the group’s most popular smart vending solutions, and according to Hearne, has seen a rate of adoption that is unmatched in the vending market today.
The unattended machine, which can operate with an app or credit card, offers fresh and convenience foods, including salads, sandwiches and drinks, without the usual glass screen separating the consumer and the product.
“You simply tap the card on the fridge, the door opens and you’re able to then shop in a natural way. You can pick products, look at the nutritional facts, put it back again on the shelf and only until you close the door and finish your transaction [will you be charged],” Hearne explained.
Another smart vending solution the Switzerland-based retailer has continued to roll out is its micro markets, leveraging technology to innovate the food provided in the unmanned retail space, particularly around hot meals.
Hearne said this has led to partnerships with some of Europe’s well-known and trusted brands in convenience food, including Albert Heijn, the largest supermarket chain in the Netherlands, and Coop, one of the leading retail and wholesale companies in Switzerland.
The group also announced a partnership with Mars Wrigley in February of last year to offer consumers a next-generation vending solution on confectionery, with the rollout of 500 intelligent machines, fitted with modern payment processing, across Europe last year, and another 500 in the U.K. alone this year.
For Hearne, brands realize that “Selecta is a distribution machine where [they] can get [their] products out there in a really effective way.”
When it comes to payments, the dream to become a digital-age business has yet to materialize, beset by resistance from some consumers who still pay with cash.
“I still live with the dream that cash becomes a thing of the past, [but] unfortunately for me [it] still remains the [one] thing that we’ve not yet been able to conquer,” Hearne said.
And it’s not that the European retailer hasn’t tried to move the needle to eliminate the excessive cost of handling cash and the labor-intensive process of retrieving physical money sitting in a machine, counting it and sending it to the bank for deposit, all of which can take several days.
Read more: Selecta Group, Fiserv to Offer Cashless Payments Across Europe
In fact, the firm’s latest technologies like self-service micro markets and smart fridges offer cashless-only payment options. But according to Hearne, that strategy hasn’t been enough to sway consumer payment behavior, with 20% of their transactions still cash-driven.
“The whole transactional cost of cash is still a concern for us. That 20% of cash that we move still costs us more than the 80% that we have on cards,” he pointed out as one of the reasons why he keeps “beating that drum about becoming totally cashless at some point.”
But despite these concerns, the firm has had to stop short of completely ditching cash payments, leaving the coin payment mechanism as an option in certain vending machines.
Hearne remains optimistic about achieving the cashless dream, however, at which time he said they will be ready with machines already designed to easily make the transition.
“It doesn’t stop us at any point in the future when the time is right to just switch that cash [option] off and then just revert to completely cashless. But I think [for now] we’re a little ahead of the market.”
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