Proving the Business Case for the Internet of Things


How the Internet of Things is Changing the Vending Business

Deutsche Telekom 

In the vending industry telemetry solutions were long considered to be half-baked and too expensive. Since then, solutions have resolved the initial problems and now help operators to increase the profitability of their vending machines and optimize their business processes.
Technically, the solution is typically a telemetry device with a built-in SIM card linked to the vending machine's control unit and its payment system. Via a mobile communications network the machines connect with a server that receives status information from them and can relay instructions in return. The server also processes the data collected for answering queries by Web portal, smartphone or API in order to connect to the vending operator's back end systems. As soon as a customer buys, say, a soft drink, the software records and relays the reduced filling level and increased amount of cash held, making the entire flow of capital and goods transparent for the vending operator.

Solutions also help the vending operator to diagnose technical and logistics problems. If, for example, an error occurs in the payment module or the product delivery, the solution immediately alerts the maintenance personnel. Solutions notify refillers automatically when the machine needs replenishing too. That reduces for the operator the risk of lost sales because there are fewer downtimes due to a technical fault or the need to deal with supply bottlenecks. Thanks to M2M, employees can assort the required fillings per vending machine already in their warehouse. That not only increases the productivity of refill logistics but also and at the same time reduces the cost of field work.

Remote price management

Thanks to telemetry solutions, vending machines can even be configured remotely. Recipes for products made up on-site, such as coffee varieties, can be changed remotely. If the machines have electronic displays, product names and prices can be changed too. If, for instance, a chocolate bar is about to reach its sell-by date, the vending machine operator can run special offers to boost sales and reduce the number of returns.

Evaluating the data collected also has enormous potential. Operators can already identify the vending machines that generate the most sales. This knowledge provides operators with an entirely new basis for making decisions. Where and when do customers buy which products? Data evaluation provides site-related information about consumer behavior. Operators can identify successful products sooner and make their business more agile. Findings can be applied swiftly to other vending machines at other locations.

From point of sale to point of interest

Connecting vending machines offers much more when they are integrated into other IT systems and connected to additional devices. Current solutions enable, for example, automatic data flows to ERP systems via APIs. Additionally, mobile payment devices enable cashless vending, which the industry considers a key driver for revenue growth. Digital signage offers new opportunities to increase customer loyalty and explore new revenue streams from advertising. To stay competitive and cater for their customers' exacting requirements, vending operators cannot afford to ignore these trends.
The market today offers a wealth of interesting solutions. We at Deutsche Telekom provide vending operators a telemetry solution that bundles hardware, software services and connectivity. The telemetry devices, which are compatible with all major vending machine manufacturers and technical standards, and the Cloud-based software are supplied by our partner Vendon. The end-to-end solution is of interest not only to large enterprises but also to small and midrange companies. Instead of heavy up-front investment, customers pay only a monthly fee for each connected vending machine. Along with the lower entry threshold, vending machine operators find it easier to weigh up the solution's costs and benefits.