Art and science of tech transformation in convenience services: Lessons from the pioneers

Technology innovation has reached a new high in convenience services, offering more opportunities for operators to improve the customer experience while achieving greater operating efficiencies.

But opportunities always bring new challenges. Operators that have taken advantage of new technologies have learned the importance of creating partnerships with technology suppliers and educating customers about new capabilities.

A panel of operators who have taken this challenge head on discussed their experiences during a session, "Digital Transformation and Choosing the Right Technology" during the recent Self-Service Innovation Summit in Hollywood, Florida.

(The Summit is one of several industry events organized by Networld Media Group, the parent company of Kiosk Marketplace and Vending Times. The media company's next event is the Restaurant Franchising & Innovation Summit being held March 20-23, 2023, in Coral Gables, Florida.)

Moderator Nate McQuillen, an account executive at WTI Wireless, which sponsored the session, asked each panelist to describe their technology journey.

"We're always looking for that next big thing. It was a continuous improvement pursuit," said panelist Ray Friedrich, CEO, East Street Business Advisors, a consultant who was a vending operator for 33 years.

Where to begin?

As an operator, Friedrich in 2006 expanded into what was then a new technology: micro markets. To offer it successfully to his customers, he found he first had to sell it to his employees. He had to communicate to the whole organization what he wanted to accomplish and why.

"You have to have buy-in," he said. "You have to have a strategy. You have to communicate that strategy and you have to have your people buy in.

"People don't want to do things differently," he added. "You can't do a top-down command-control."

Initially, his drivers resisted working with micro markets.

Find your allies

Friedrich said there are usually "ringleaders" among the drivers in a vending operation. He would first ask those influencers to use the new technology. Those individuals viewed this as a compliment and encouraged the other drivers to support the new technology.

Going to pre-kitting deliveries from static scheduling was also difficult for his employees to accept at first, Friedrich said. "That's a huge leap of faith for a lot of people," he said. He needed to tell them that the technology would improve their productivity and eventually pay them more.

As a consultant, he has seen good companies fail with good technology because they didn't get the proper buy-in.

Panelist Michael Lovett, CEO at Capital Provisions, a foodservice provider in Southern California, agreed that getting support from the team is difficult but important.

"As a technology user it's frustrating; it's hard to learn," he said. "It's hard to train people and it's hard to get technology-hesitant team members to adopt the technology. It's got to be as easy as possible."

Find the right partner

The panelists agreed that finding the right technology partner is especially important when introducing new technology.

When Friedrich expanded into offering online catering, he chose a supplier that had a bad UI for the client side.

"We weren't delivering because we're missing pieces and it didn't communicate with the accounting system," he said.

The lesson Friedrich learned was to be willing to "fail fast."

"Don't try to fix something that's not fixable," he said. "It was the right idea — wrong supplier."

Panelist Gary Arwin, president of Gator Refresh in Orlando, was one of the first vending operators to offer purchasing from the machine using a cell phone about 12 years ago. Like Friedrich, Arwin faced some challenges finding the right technology supplier. While the first technology he used for enabling mobile phone purchases worked well, the provider soon ran out of funds.

Fortunately, PayRange Inc., an established vending industry technology provider, eventually introduced a product to allow mobile phone purchases.

When considering new technology, Arwin said he now makes it a habit to ask a technology provider for other customers he can speak to. He also asks for a demo unit to try in his own facility first to see if it accomplishes what it is supposed to do.

Arwin also makes sure the supplier has enough parts on hand or another machine on hand if something goes down.

He also thinks it wise to make a test call to the company's customer service line to see if they answer it.

Friedrich agreed it is important to make sure suppliers are properly funded and can provide the necessary support.

"If it's going to require a lot of support, they better have a support network," he said.

The panelists agreed they would walk away from a supplier if the support agreement does not meet their expectations.

How to introduce new technology

Introducing new technology to customers also requires certain considerations.

Arwin, seeing that mobile purchasing from a vending machine was a new technology, first introduced PayRange to some Apple stores he was servicing. He chose these locations, knowing that the employees were more tech savvy than most.

"When you're testing technology, you want to make sure the technology is tested in the proper environment," Arwin said.

Educating the customer is also an important step when introducing new technology.

When he introduced LightSpeed Automation, a warehouse automation system that supports pre-kitting deliveries, Arwin advised his accounts they would not see the driver on the same schedule. He explained the technology would determine the most opportune time to make their deliveries. Most customers accepted it, but not all. Over time, most accepted it.

Where to look

As for finding new technology, Arwin said he learns about it at conventions and trade publications and talking to other operators. Companies know he is interested in technology so they reach out to him with new stuff.

"I've seen stuff today that I haven't seen and nobody's told me about," he said regarding the SSIS exhibits. "That show's phenomenal."

Friedrich, who said he relies on trade shows and peer groups to learn about technology, agreed the SSIS show is especially interesting because he can learn from other industries. He can talk to restaurant operators, food truck operators and retailers.

"I find it interesting to see what other industries are doing to solve their problems and how much overlap there truly is in how we can learn from one another," he said. "We're not all in a box."

Technology success cases

On the subject of successful innovations, the most successful technology Lovett implemented has been dynamic pricing. Most operators don't believe in increasing prices for fast-selling products and decreasing them for slow-selling products.

"We do it all the time," he said. "We'll do it for expiring products. We'll promote products that give us a higher rebate. We'll promote products with a higher margin."

Lovett, who worked in software and payments technology before expanding into vending, said the "gold standard" among many vending operators is to merchandise their offerings once a quarter, which is wrong.

"You should be merchandising every single stop, and you should put data at the fingertips of the people who are stopping and the people who are working in the warehouse," he said. "It doesn't have to be fancy, but it's all got to be right, and it's got to be on every single sale point so that we know who we're selling to and how to sell to them."

Head shots provided by speakers.