Add markets by changing your outlook!

You’ve seen the post that projects significant growth in micro markets year after year! But as the competition increases finding just the right location can become difficult! Revamp your market thinking and find ways to locations that aren’t just the norm.

Smaller locations can be successful too! Three Square Market has had successful markets of 35 employees or less since 2013. And here is how we do it and why …

Why? Because there is limitless potential in businesses of 15 – 75 employees!

How? Small office, think small market! At 32M, we added the Tablet kiosk in 2014 and subsequent small kiosk models to improve on the small market opportunity. Most other kiosk providers have over the years adjusted to the small kiosk movement as well.  Essentially, the smaller kiosk incurs a smaller start-up cost and has a smaller footprint.

Taking it to the next step … mobile apps! That’s right, you’ve heard us say it before but as the originator of the mobile app for micro markets, we think this is a BIG deal! A kiosk in every hand can only increase the number of transactions your market can handle at any point in time! 

Making it work for you? 

Find an appropriate location for your smaller markets, because these markets require your attention just like your larger markets.  To be successful you need to be active in regularly servicing your small markets. We suggest that you look for small locations that surround your larger or existing markets.

As always, cleanliness and filled, faced products in your market is imperative in keeping your market desirable. Micro markets with low product selections or look messy tend to have a difficult time retaining and drawing in purchases. It is worth the investment in your product stock to keep your markets looking fully stocked and orderly.

Your product selection? As we know fresh food items are a key to success in micro markets and we aren’t saying you should immediately count these products out, but here are a few things you can consider if you feel like fresh items are not working at these locations.

  1. Trendy products like protein bars and drinks, kefir, kombucha, high-end frozen products. Remember you want to make your market significantly different from what they would have had with vending machines.
  2. Location subsidizing costs – although this option might not work for all locations it never hurts to see what locations are willing to do for their employees. Remember that employers are looking for low-cost ways to add high-value employee benefits.
  3. Route management and pre-kitting, the more you are on top of your markets and very involved with products, product rotation, and expiration management with promotions to move products when necessary.

Be creative!

Small location means your probably putting in a small sized market! Check out this new cooler/freezer combo options from Minus Forty! We think it’s really cool and the perfect addition to our mini market solution! Don’t shy away from the challenge! Remember … hard work pays off!

 

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Stimulate Sales with Selection, Display & Rotation!

In a great blog series about the Four P’s of micro markets from 2016, Tim Sanford and Emily Jed so into great depth to describe and explain each of the P’s as presented by multiple operators at the ACE show in 2015.

The second P stands for Product. We’ll break down the details for you here:

Knowing as we do that micro markets demand a significant increase in products, it’s easy to understand why presenter, James Bourne, says “You need your distributors to understand [micro markets]. Thus, supplier management is an essential component of successful micro market operations.”

The definition of Supplier Managment is the various acts of identifying, acquiring and managing the products and/or resources needed to run your business. 

Current consumer demands and understanding what your specific customers want is imperative to your micro market success. We would suggest that you use and encourage the use of the suggestion button on Three Square Market kiosks.  If you are looking for great suggestions try adding an incentive for products information!

Prevalent Consumer Demands:

Healthier, alternative snacks: Ranging from baked and low-carb selections to gluten-free, organic or all-nature products.  Distributors continue to work to bring these products into the industry, but availability can be difficult to source based on region. Bourne suggests, “Operators can do their homework to compile market information that can persuade a distributor to stock desirable new items.”

Brands Matter: 61% consider their brand of choice to be an important attribute of a snack. 73% of consumers look for a favorite brand when choosing a snack.

Sales Surges: An IRI for calendar years 2011 to 2014

  • Candy 33%
  • Salty Snacks 32%
  • Pastry 16%
  • Meat Snacks 13%
  • Nuts & Seeds 9%

“Bourne emphasized that precise inventory control is essential in micro markets.  Each market should be inventoried at least monthly, and drivers should carry tablet computers with scanners for best, speed and accuracy. Each inventory visit should be followed by preparation of a ‘no scan items’ report, which helps to identify slow-moving items — 15% of market inventory. ‘Watch this,’ he warned. ‘Don’t let your market get sparse; they can’t look unattended.'”

Let us interject here because A) we totally agree and B) Three Square Market has made this process even easier! Check out our intelligent inventory management that will identify each of your products movement/pattern in each market. Also, learn how you can manage your inventory via a smartphone during market visits! 

Planograms are essential to micro markets.  The object being to apportion space to a  product category on the basis of its sales volume. Need a starting point? You can use vending sales as a good place to begin your market planogram and then expand to the added products you’d like to carry.

Bourne said, “Be sure to carry strong local and regional brands, as well as the national best-sellers. … Consumers will search for these products.”

Understanding Placement of Products: (more p’s)

Placement of products in display cases is important. Bourne says, “You should place your top sellers on the bottom shelves,” and goes on to say, “Place impulse, discontinued and high gross-profit items on the top shelves; and put new items at eye level, ideally in the ‘first’ position — closest to the door handle — because that’s where the customer looks first.”

Planograms should be refreshed at least quarterly.  Bourne tells us, “Our goal when we do this is to eliminate 10 to 15 items, and introduce 10 to 15 new ones.”  Updating promotions in accordance with the market refresh can boost sales and invite new market users.

Pre-kitting can not only make your market restock more efficient but also will free up enough time for your driver to check inventory, ensure cleanliness of the market, face market products, and maximize your market potential.

When dealing with portion sizes for your products, Bourne suggests looking at demographics, stating that “Males tend to want large sandwiches; women often want smaller ones … we try to provide something for everyone.”

Fresh Food Programs:

“Bourne emphasized that a good fresh-food program can be essential in realizing the full earnings potential of a micro market. ‘Fresh food represents 30% of overall sales,’ he reported.”

Fresh food in your micro market is shown to draw added customers to your market and can lead to the increased value of the average purchase.  Our writers add, “For best results, it’s important to rotate menu options, slot in seasonal and holiday-themed selections and feature regional favorites, when possible.”

Again, it’s important to understand that supply management of your fresh food is incredibly important and attention to detail in this area is required.

Micro market operators can make price changes in real-time. Bourne gives the example, “Anything that sells for $3 or more and has a sell-by date of today can be discounted to $1.99. You could offer 10% off all sandwich sales on Fridays.”

Another interject … try using our expiration management system to make sure you are staying on top of your expiring products so that you can make these price changes without missing the boat!

Bourne describes a food cooler and freezer layouts … We’ve made images to make it easier to show you!

cooler and Freezer layouts-01cooler and Freezer layouts-02

Destination Grouping:

“Bourne said, the operator should design a micro market installation with ‘destination zones’ in mind.  Thus, a ‘breakfast zone’ might position the coffee brewer in proximity to display containing pastry, and an ‘impulse zone’ near the checkout kiosk can feature gum and mint selections.”

Our writers suggest “for purposes of positioning and promotion, it can be useful to remember that the ‘dayparts’ of a typical micro market operation are breakfast, a morning snack (9-11 AM), lunch, an afternoon snack (2-4 PM), and dinner/ride home.

“Bourne concluded by pointing out that snacks, food, and beverages sold in convenience stores … not dissimilar to the one that patronizes micro markets. Both rely very largely on preportioned single-serving products, and he suggested that a solid starting-point for thinking about the expanded variety of items needed to keep a micro market interesting to patrons is to study the data on c-store performance and sales trends published by market research organizations.”

Bottomline:

Your product selection is a major part of your micro market success.  Be creative and flexible with your products and planogram, and always keep working on your markets!

 

Take me to the water …

Are you on point with the latest beverage trends?

Going from vending to micro markets allows for a significant upgrade in the variety of beverages that you offer, going from 8-10 beverages to upwards of 40+. According to Reuters, on March 10, 2017, “Americans are now drinking more bottled water than soda.”

FYI: 

Bottled-water consumption in the U.S. reached 39.3 gallons per capita while carbonated soft drinks slipped to 38.5 gallons.

Soda consumption regularly exceeded 50 gallons per capita in the late 90s and early 2000s.

Total bottled water volume rose about 9% to 12.8 billion gallons in 2016.

Stats by Beverage Marketing Corp

Coca-cola states, “Overall, more consumers are making trips for sparkling water, with 12.9% of all shoppers stopping to pick up sparkling water products.”

Bernicks, a Minnesota based vendor, blogged about the emerging markets in sparkling water saying, “Sparkling water offers several health benefits to those who tend to be more health conscious. First, it’s a great way to add more water to your diet – particularly for those who are good at drinking regular water but desire something else to supplement their hydration habit. Secondly, as it contains low or no calories, sparkling water is an excellent (and delicious) beverage alternative.”

Bernick’s blog goes on to give a few suggestions on what options you should consider offering to your customers, “Perrier and San Pellegrino are popular choices, and they are seen as two of the most popular premium brands of sparkling water. Of course, you’ll also want to consider flavored sparkling water options, such as Klarbrunn Sparkling which is also home to Vita Ice. Finally, if you’re simply looking for the most popular, please-all brand of sparkling water, consider Aquafina Sparkling, which has been the best-selling brand in the U.S. for over 30 years, and it’s also the number one canned brand worldwide.  And, did you know the bubbly super brand got its start at a small Wisconsin brewery? True story. ”

We completely agree! And would throw out there that Dasani boasts a nearly 90% consumer recognition and is another great option for flavored sparkling water.

Bottom-line: We think it would be a great benefit to your stores to add, update, and include some sparkling water options to your markets! 

BONUS: 

According to Coca-cola, “retail outlets have the opportunity to increase profitability and leverage the connections between food purchases and three on-trend beverage categories: sparkling water, ready-to-drink tea, and still water.”

Here is what Coke says about those three beverage categories and combined food to build cross-store connections (we’ve just put in items that make sense for micro-markets):

1. Sparkling Water Connections
Consumers are increasingly purchasing sparkling water with items tied to entertaining and snacking, specifically deli dip, specialty cheeses and value-added vegetables.¹

• Deli dip: Sales of deli dip increased 8.9% from the previous year.¹ Trips with both deli dips and sparkling water were up 25% over a year ago, and the average basket with both items was worth almost $114. (Think Hummus cups, salsa, veggie & dips)
• Specialty cheeses: Sales were up 7.5% from last year, with trips containing specialty cheese and sparkling water increasing 7% over the previous year.¹ When the two items are purchased together, the basket is worth nearly $121.¹ Utilize sparkling water to connect with premium, entertaining categories to further grow the connection between sparkling water and deli dip, and specialty cheese. Cross promotions can increase sales in both categories. (We’re thinking “adult” Lunchables, cheese and crackers, cheese sticks)

2. Ready-to-Drink Tea Connections 
The Nielsen study found strong sales and basket connections between RTD tea and every day, fresh ingredients, such as ground turkey, packaged salads, and deli cheese. In fact, 44% of tea buyers also buy deli cheese, and there is an 82% buyer overlap between RTD tea and packaged salad.

• Ground turkey: Since RTD tea and ground turkey buyers over-index as African American and Hispanic, leverage both the beverage/food connection as well as the appeal to key demographics.¹ Keep these consumers in mind when deciding on markets for co-promotion or meal deals. (Okay, so you probably don’t have ground turkey in your market but what about turkey based lunches or snack items? Those fancy Lunchables, or upscale deli sandwiches!)
• Packaged salad: Focus on increasing the frequency of trips that include both RTD tea and packaged salads by offering coupons with packaged salads or promoting them in circulars together. (We think this one is self-explanatory)
• Deli cheese: Merchandise tea near the deli with an emphasis on drinking tea with lunchtime sandwiches. Focus on cheese flavors that appeal to RTD tea’s key demographics, older families, and Hispanic households. (Deli sandwiches and your healthy meal options)

3. Still Water Connections
As still (or base) water gains in popularity, the Nielsen study revealed opportunities for retailers to leverage sales and basket connections with traditional staples that are occasion-focused. Consumers in this category are in the mid- to a high-income range and have bustling families with children of all ages.

• Deli items: There is a strong sales connection between still water and quick trip and alternative channel options.¹ However, this category had a weak basket connection with still water (as opposed to meat, which had both high sales and high basket connections). The opportunity for retailers is to show the value of your category on different trips and/or in different channels. For example, display base water in the deli department to encourage quick trip purchases together with deli pizza, or cross-promote base water and other deli-prepared items together as a quick, easy family meal deal.  (Water, its essential for life)

 

What is the major draw of a micro market & do you measure up? …

Let’s think about what brings your customers to your micro market! Often thinking about your market experience from your customers’ perspective can be your best spent time.

Why do customers use a micro market? 

  • Items not found in vending machines. (variety)
  • Fresh, healthy options that you don’t have to leave your workplace for. (convenience)
  • Access to hot food versus cold food. (quality)
  • Rewards and coupons. (bonus features)
  • It’s a nicer environment, more attractive look and experience. (aesthetics)

Knowing that Variety, Convenience, Quality, Bonuses, and Aesthetics are factors that your customers are looking for … how does your market measure up? 

How can you update your market in these important areas?:

Variety: 

Are you reviewing your product selection? Looking at products that are moving or not moving? Are you replacing products that have worn out their welcome?

Using Three Square Market’s exclusive intelligent inventory system you can easily see what products are popular, mediocre, and past their prime for each individual store.  This allows you to easily customize your product selection in each individual market to maximize your sales per market without the need for a lot of extra work. Here’s where you can learn more!

Convenience: 

Beyond having the products your customers what and need for a quick and convenient lunch … Do you have ALL the products that make your customers’ lives easier? Have you thought about the items that might save someone a trip to the store?

In today’s society time is money and saving someone time is worth a little extra spending cash.  Think about electronics or health and beauty items a person may need throughout the day, or take home meals for the family that eliminate that stop at the grocery store.  Maximize the ways that your market creates convenience for your customers and gain their loyalty in return!

Quality:

Micro market products are often priced higher than traditional vending products. Typically approximately 15 to 20 percent higher to cover the cost of credit card processing, sales tax, and product loss.  Millennials make up the majority of the workforce these days and according to Nestle, “[Millennials] are the first generation now who are willing consciously to spend more for better quality [products], for sustainability, for traceability.”

If the average fast-food lunch for an employee is $6 you can assume that your customers are willing to spend up to $6 on quality lunch items in your market if it meets the convenience, variety, and appeal of a fast-food.

Bonuses:

Every retailer out there is using coupons, rewards, loyalty, bundled options to increase transaction values.  Consumers love opportunities to save and increase the value of their purchase! The key is to look at perceived value and create specials and deals that make sense for your consumer. Salad or sandwich purchase gives you a discount on your beverage purchase … where is the downfall?!

Using coupons, rewards, bundles to increase your average transaction value is a great way to 1) increase revenue and 2) decrease the chance of product spoilage.

Aesthetics:

According to an article in the Milwaukee Journal Sentinel, “Consumers rate [micro markets] off the charts in nearly every category. Employees love it because it’s just a nicer environment. It’s like going to a bistro or a restaurant.”

The aesthetics of your market is an important factor. Employees are looking for something special that gives them the feel of leaving the office without actually having to do so. Investing in the space beyond just your products and checkout is important.

Making the space comfortable, attractive, and inviting can only add to a quick return on your investment. You can even work with the company to pay for these upgrades or split the costs – touting the perks to a company with a micro market with happier, healthier, more productive employees. Bottom line is investing in your market can only make your market more attractive to your customers yielding increased sales and profit for you.

For starters, you can go to 32MarketStore.com to see how you can show off your products in the most attractive way possible with 32Fixtures!

 

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Landing that appointment to grow your business …

As a micro market operator,  you know the best thing for your business is to grow your number of location. Sometimes that is easier said than done.

Here are some tips: 

We know you’re looking for a qualified business that will make your service profitable. During your introductory phone call, you can gather some of the important details you need to zero in on your target locations, such as staff size, current vending or market situation, office coffee situation, etc.

Although the world is moving towards texting, messages, and email communication, by creating a personal relationship with your target location and making on-site visits you can build a rapport and trust with the business that will help you in your sales pitch. You should always seek to sell in person vs. over the phone.

Want to land the appointment? Ask engaging questions that will help you to understand what the client currently has, and what messages you can tailor to win the account.

During your initial call, you can ask these questions:

What is your current vending situation? 

  • This will prompt your prospect to talk about how many machines they have and what’s in those machines.

Tell me about the kinds of items you have in your vending machines now? 

  • If they are using traditional products at this time, this gives you a great conversation starter about the wide variety of foods and products that can be incorporated into a micro market. Think “Fresh Food, higher quality products all at no cost to the company.”

Do you have employees that work late or overnight shifts? 

  • Off-shift workers are extremely limited in their food options and will benefit immensely from the update to quality, fresh, & meal options of a micro market.

Do you have a calendar in front of you? 

  • This is a great way to almost guarantee an appointment to talk about the benefits of a micro market in person.

 

Micro market benefits to talk about: 

  1. Multiple payment options (credit/debit cards, cash, payroll, mobile).
  2. Expanded product selection including fresh, quality foods, health & wellness, electronics & personal needs items. 
  3. Self-checkout that allows employees to pick up and look at products prior to purchase. 
  4. Easy to use, more attractive than vending, lower energy footprint, and often fits in the existing vending space.

 

If you are reading this you know that the benefits of micro markets are becoming well-known and ever-expanding within our industry.  You can increase your chances of successfully landing an account by being the first in the door with your market solution.

What are you waiting for?

 

We got a lot of this great information from MarketReach! Check out their article here to learn more: http://bit.ly/1aQdOnd