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So, there are some companies that have converted their stock to completely cashless but this comes with a cost, so any help vending businesses can offer customers to make the change such as finance will be welcome. The same applies for all new tech. We’re seeing developments for app payments, detailed information on screens such a nutritional info – and probably one day, carbon footprint – as well as additional purchasing and delivery services. Take the upcoming deposit return scheme for example, a machine will need to inform the purchaser onscreen of the deposit cost they’re paying for a plastic bottle or can. These screens can also be used to generate advertising revenue if they’re on a public site. That same screen can be used by a customer to pay for their purchases but also to organise delivery of another order to their office. There are so many opportunities here but the more technology you incorporate the more it’s going to cost.
KV: Absolutely, and those vending operators that can offer finance at point-of-sale will be best-placed to help the end- customer invest in the latest tech without jeopardising working capital. Our financial solutions can make investment affordable by aligning regular payments with cash flow and it’s possible to fold in aspects like maintenance and upgrades so, as the technology evolves, end-customers can make the most of their machines. This is also supported by our digital tools which help salespeople to close deals faster with quick on-the-go credit decisions. DL: That makes even more sense because incoming regulation and inflationary pressures are really going to be a challenge for businesses in the sector. We’re estimating inflationary pressure in the vending industry at about 23%, as a result of labour costs, logistics, fuel costs, raw materials, products and ingredients. So the more that vending businesses can do to help customers acquire equipment and technology, smoothly and simply, the better off they’ll be.
KV: That’s exactly right and on the topic of regulatory pressure, of course, we have the upcoming deposit return schemes (DRS) – which I wrote about for Vending International in February. Where do you see the greatest challenges there?
SIESMART With digital platforms such as SieSmart and e-signature from Siemens Financial Services, vendors manage proposals for more complex deals swiftly online. The platform allows you to:- • Efficiently manage agreements • Access asset details and supplier information • Manage balance and payments • Access live portfolio information • Track portfolio to trigger upgrade or renewal sales calls
DL: Well, I would take Scotland as our starting point for discussion given that their scheme will come into effect soonest and they’re very much driving the model for how DRS will work. So originally the Scottish government proposed around 38,000 return points of which 10% would be return vending machines (RVMs). However, the companies that meet the criteria to supply these machines do not have capacity to meet this. On top of this, when you look at the smaller community stores who
are expected to do manual scanning and return, there’s been some push back. Shop owners, for example, don’t want staff handling dirty bottles and cans and then also handling food. So, they too are demanding RVMs. Beyond the capacity issue, there’s the finance issue. Who’s going to pay for them? Compared to vending machines which cost around £5000-6000, these automated return points come to £20,000-30,000 each. So there’s an opportunity here for these vendors to offer finance support to the customer. What’s interesting is that these aren’t typical outlets for the operators, it’s not an office or a leisure centre but a retail outlet.
KV: To your point then, community stores won’t be able to afford these machines using their own funds and will need the equipment vendor to supply some kind of intelligent financing arrangement. It’s a good position to be in really because the right financing partner – one who makes the process easy and clear – can help to close more deals. We work together with the vending community to devise bespoke financing arrangements drawing on our combined industry knowledge. Unlike generalist financiers, at SFS understand the industry and how the technology will benefit the end-customer, which makes it easier for us to collaborate with vending operators on deals that fit their customers’ requirements and timeframe. This is also supported by our suite of digital tools that can make the process simpler and put more control in the hands of vendors.
KEY TRENDS SUPPORTED BY INTEGRATED FINANCE: - Increasing requirement for 24hr provision alongside lessening need for live catering
- Widespread adoption of micromarkets in the US and UK - An acceleration towards cashless machines that offer greater product detail, insight and additional services
- Burgeoning demand for Reverse Vending Machines at community retail outlets
- A range of specialist finance solutions and digital tools that can facilitate investment in these fast-paced growth trends making new and refurbished technology accessible and affordable.
For more information: Visit:
www.siemens.co.uk/vendor-finance, Call Michelle Hunter on 0161 446 5056 or email
vendor.sfs@siemens.com
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