365 Retail Markets is the undisputed global leader in the provision of micro markets to Business and Industry, both in terms of the volume of its clients and in its track record of innovation.
In this special report, Planet Vending Editor Ian Reynolds-Young discusses ‘now’ and ‘next’ with 365 International’s President, John Chidiac.
Choose your cliché: ‘Necessity is the mother of invention’, or maybe, ‘there are no problems, just opportunities’. Either one provides an accurate, if hackneyed indication of 365’s direction of travel in the 2020s.
The campaign to expand the company is being played out on two distinctive fronts, namely at the high end of the market, which is the territory of huge, global organisations such as Amazon and Costco and simultaneously at the lower end of the market, populated by organisations with fewer than 250 employees; those seen as being too small to embrace the benefits incumbent in the micromarket concept.
John Chidiac is President of 365 International. He is the man who is responsible for continuing the expansion of the company’s best-in-class Vending, MicroMarket and Foodservice technologies across the globe. He and his team work both on developing new markets and on growing the self-service technology business outside the United States.
PicoMarket: Before we turned to his strategy for the future, I asked him to provide a précis of where the company is right now.
‘In Europe, in terms of infrastructure, we are exactly where we want to be: in pole position to accomplish further growth’, John says. ‘We now have our entire distribution channel in place; we have inventory locally and we have technicians locally. We’ve moved two of our top people to Europe – one in technology and one in sales – to manage the market and we’re in the process of adding another senior staff member. We’ll appoint a European candidate rather than exporting another of our home-grown experts.
‘When we arrived in Europe, our support personnel consisted of just one person. Now, there’s a well-trained team in place, providing our customers with the back-up they need, 24/7. These are examples of the substantial up-front investment we’ve made in Europe and we are both confident and optimistic that it’ll deliver the results we want.
‘Throughout 2020 the focus is on completing our expansion in Europe. We still have the Scandinavian countries to cover and after that, we’ll focus on Eastern Europe. Subsequently, we’ll have to decide between S. America or Asia for our next focus.’
PicoMarket: So, with ‘the state of the nation’ covered, our conversation turned to the future and the actions that are being implemented in order that 365 can continue to expand and remain pre-eminent in the market.
‘The High End’ – Partnership
‘We have an increasing number of multi-national customers that are asking us to provide them with a global solution, but there are very few global operators in our world. To address this demand, we’ve been building partnerships with the biggest and best players in the marketplace. In Europe, we have Selecta, and in the US and Canada, Compass. We work very closely with our partners, using our technology, to win the business of the world’s biggest companies by providing them with the seamless international service that they want. Obviously, we currently fall short in Asia and South America. Nevertheless, nobody in our industry can match our coverage so when it comes to micro markets, you might say we have ‘a leg up’, John said.
‘There’s another important advantage in partnership: take large clients who are already dedicated to us. They already use our technology in their offices and warehouses in North America so we’re introducing them to our operating partners in Europe. That way, they can replicate In Europe what they have at home. We take partners nationwide in the US, then we replicated that in Canada, and we’re hoping to do the same thing in Europe. That’s a pattern I’m sure we will see repeated in the future.
‘The Low End’ – Innovation
In the US, around 40% of organisations that are suitable for micromarkets – those with 200 + people on site – already have one. At some point in the next 6-7 years, the industry as a whole will have the entire market covered. To maintain expansion, 365 is introducing technologies is to customers of a size that is below the 200 threshold. ‘In organisations of that size, the capital investment required to get a micro market up and running isn’t feasible. But the potential of this sector is vast’, John explains. ‘In the US, there are 85,000 companies with over 250 people on board, and getting on for a quarter of a million that are below that level of employees. That’s too big a marketplace to ignore so, we’re not going to ignore it.’
365’s route into this lucrative new world is to think outside of the box. ‘There’s an innovation that’s going to add a whole new layer to the profile of potential 365 customers and that’s our most versatile product yet, ‘Pico’’, John explains. ‘The 365 PicoMarket will be available in Europe from the fall of this year. Basically, Pico brings you one technology that can be used in two ways: PicoCooler — your modern connected chiller cabinet, and PicoVend — vending for the new decade. The 365 PicoMarket consists of one or two chiller cabinets and vending machine that operate under one backend system. They can also be used independently as stand alone technologies or added to existing markets as an additional checkout point.’
So, what is it about PicoMarket that 365 believes will be a game-changer?
‘It’s a cashless payment unit that is a little bigger than the ordinary card reader for vending and it’s a lot more advanced’, John says. ‘It has a 7-inch screen, and a built-in bar-code scanner. It allows a vending machine or a chiller cabinet to be managed in the same way as a micromarket; so customers can take a product or a coupon or an account card and scan it.
‘We’re now finalizing the details ahead of the launch of both PicoVend and PicoMarket into Europe in Q3. It’s a hugely anticipated product: right now, it seems as though everybody wants it. We shared some details on Social Media and because of that, we get e-mails daily from all over the world asking about it. We are planning to send some demo units to our European distributors later this year and we’ll definitely be showing it at EuVend in the fall.
‘This product will make micromarket technology available to organisations that don’t have sufficient people – or space – to justify a fully-fledged micro market. A smart chiller cabinet is at the heart of the offer. We’ve been working in the US with high-end equipment supplied by Minus Forty with software that opens the door when a payment has been made.
‘I mentioned that ratio of small versus large companies in the US earlier, but in Europe there is an even greater disparity. There are many, many companies of around 100 people. The other consideration that is an important factor in Europe and less so in America is space. Fitting a micro market in a company in a European city, where real estate is so expensive, is an issue – but you can always find space to fit a couple of chiller cabinets.’
365 Pay: ‘A Line Buster’
One of the success stories of 2019 for 365, which will become even more important going forward, is the popularity of its payment app, ‘365 Pay’. It’s already in six European countries and a new country is being added to the roster every month. ‘It not only puts information into the pocket of the end user’, John says, ‘it’s also a ‘line buster’. Previously, clients have been obliged to buy two or three kiosks, at $6-7k each, to avoid long queues at busy periods. Now, they just buy one kiosk, install a 365Beacon and ask people to download the app onto their phones. They just scan products with the app and pay that way – no more queuing.’
Reflecting later on my conversation with John, it’s easy to envisage that PicoMarket will prove to be particularly attractive to UK businesses. His point about the lack of space in the modern workplace, because of the huge cost of commercial property, rang true. It’s little wonder that the appeal of large scale micromarkets is diminished when the formula for working out the cost per square meter of prime office space seems to be, ‘think of a number and double it’!
With PicoMarket, that issue will be overcome and because they are relatively cheap to install, you’d be entitled to suggest that more – and smaller – organisations will welcome the concept as the ideal way to serve the needs of both the employer and the employees. If that turns out to be the case, might the end of traditional office vending machines, oft predicted, finally be in sight?