Vending Machines Gone Wild
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It’s become en vogue to run a vending business. No, seriously. Content creation and shortform video have given rise to the Creator Vendconomy; people who make content about their vending machine side-hustles.
Nevermind a few sheisters, there is real merit to operating vending, especially if you’re a brand looking for new avenues for discovery. Liquid Death launched a corporate merch vending strategy in 2021; in case your office needs heavy metal hydration on-demand. The space is gaining legitimacy as brands are trying to reduce operating costs. Subway recently announced a rollout of vending.
Future Commerce subscriber Jon Packer, owner of Pretzels.com and Popsters (not sponsored), has firsthand experience. They operate just three vending machines, and see reasonable amount of brand exposure and growth as a result.
“We position the vending machines as a great way for people to sample our products and also for brand awareness,” says Jon. DTC brands need the help, too. The only thing more uncertain than the state of the economy? Online advertising.
High-growth brands are also looking at vending to build EBITDA. One early mover was Buff City Soaps, which launched vending ahead of their brick-and-mortar store buildouts.
Sanjay Jenkins, the former Director of eCommerce at Buff City, says that it’s quite possible to operate profitably, even if you’re small. “To build EBITDA, you have to place your machines in a place where your product has the highest chance of delivering contextual utility.” Meaning, you have to be where people who need your product can use it. “Examples of this include the Best Buy vending machines in airports, soda machines at highway rest stops,” says Jenkins.
As advertising dollars dry up, and consumers get thrifty with online purchases, we expect vending to get more competitive.
For more on how to deploy vending strategically, read 800 more insightful words on lessons learned from the Buff City Soaps vending launch. Sanjay Jenkins gives us the masterclass right over here.
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Our Take: The real tragedy here is that this is a mea culpa for Allbirds. In 2019, the Silicon Valley shoe brand threw stones at Amazon for copying their silhouette. Selling through Amazon seems to be, ahem, fashionable right now; especially as eCommerce is becoming more expensive and cumbersome to operate. To wit, GAP recently launched on Amazon, after facing slowing footfall in-store.
Allbirds may be experiencing de-growth online, even if footfall is up in-store. DTC analyst Nate Poulin did the analysis: “[Allbirds doesn’t] break out eCom, Store and Wholesale revenue explicitly, but with 16% top line revenue growth and 51% Retail store growth, it’s fair to infer that eCom is growing very slowly or negative.”
Maybe they could dip their toes into community or collabs? Birds Aren’t Real x Allbirds would sell. Big time.
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