Our first Company Kitchen (honor based no vending machines) in Iowa has been up and running for two weeks. We have four cameras installed so we can watch what is going on at any time we want from an office computer to a laptop in a McDonalds on their Wi-Fi.
We can also go to another site that will tell us the sales at any of our Company Kitchen locations. The system uploads new data every two hours. Sales are up at the new location by about 30 percent. The thing that fascinates me is the cold food sales.
Cold Food Sales
We are getting 25% to 50% more sales out of our cold food items and selling ten times more cold food at this location. The difference seems to be that they can open the cooler door and physically touch the item before they actually buy it.
We are selling more of the higher end items now that the Company Kitchen has been installed also.
Constraints Of A Vending Machine
As most of you already know vending machines will not sell anything larger than an LSS bag of chips. With the Company Kitchen the chips are displayed on a rack like you would find in a grocery store or a convenience store so the bag size limitation problem has been removed from the equation.
If a company wanted to sell paper or pens that is also an option now.
Paying For Merchandise
Company Kitchen has eliminated the need for cash. There are several different ways to pay at the kiosk.
1-The customer can pay with a credit card.
2-The customer can pay with a debit card.
3-The customer can pay through their Company Kitchen account that can be set up in a matter of two minutes.
Company Kitchen Account
When a customer sets up a Company Kitchen account they get their own web page. This web page opens the door for them to access all of the customer benefits that Company Kitchen provides them.
One of the benefits is that at the end of a day they can open their web page and see exactly how much money they spent at the kiosk. They can also see the nutritional value of each item they consumed that day. They can put money into their account from a credit card or a debit card.
The customer can also put money in their account at the kiosk by letting the machine know who they are which activates the bill acceptor. They can put a one, five, ten or twenty in the bill acceptor and it is put directly into their account.
Company Kitchen has eliminated paying for an item with cash and the advantage in my opinion is that people don’t think about how much they are spending. That results in sales going up.
When they sign up for the Company Kitchen account they are given a small card that when scanned takes the money from their account. The thing that most of the customers enjoy is that by having an account they can use their thumb print to pay for an item and it comes from their account funds.
How convenient, the customer comes down for a glass of water and as they walk by the coolers and the shelving they impulsively pick up a Coke, walk to the kiosk, scan the bottle of Coke, and put their thumb against the thumb print eye. You just made a sale and all they needed to buy that Coke was their thumb print.
About 1% is the norm. You don’t pay the account a commission and your cold food is being sold at a premium price. Here is something else to consider.
If you are getting $1.35 out of a 20oz bottle of soda through a vending machine and there is a deposit of 5 cents on the bottle like there is in Iowa you are actually getting $1.30. Now add sales tax and in Iowa that is 7% so now subtract another 9 cents so you are actually taking $1.21 to the bank.
With the Company Kitchen you can program it to add the sales tax and the bottle deposit. Now you are taking a $1.35 to the bank instead of $1.21 and my friend that extra .14 cents is profit in your pocket.
SummaryThe honor system is coming to vending and I don’t think there is any way we can stop it. The vendor has finally figured out what the honor snack box operator has known for years.