In conversation with our CEO Aroon Khatter: On Setting up a Digital Vending Business

The digital world provides an expansive universe of potential to every brand. And with the pandemic, the march of Indian retail towards digitization has only hastened. This hastening has brought to the fore unmanned automated retail, which allows for each customer to have a personalized shopping experience with minimal human interaction. And smart vending solutions, which are an essential part of unmanned retail and self checkout, are increasingly becoming a part of Indian retail’s digital umbrella, along with e-commerce, delivery apps, and cashless digital payments.

What does this mean for brands and entrepreneurs? Our CEO, Aroon Khatter talks about the digital future of retail through vending machines and unmanned retail in India. Why and how brands can go digital-first with the help of smart vending machines and unmanned retail solutions  in India.

1) Smart vending machines are seeing robust growth in India and the world, what according to you is the reason?

Chief executive of the National Health Authority of India, Ram Sewak Sharma stated that India has 1.18 billion mobile connections, 700 million Internet users, & 600 million smartphones, which are increasing 25 million per quarter. And because smartphones have become ubiquitous, it has increased the customer’s appetite for instant gratification. To match such needs, businesses are constantly having to come up with newer solutions.

An IDC research stated that two-thirds of the CEOs of Global 2,000 companies will shift their focus from traditional & offline strategies to more modern digital strategies to improve the customer experience before the end of the year. Why? Because with each passing day the customer’s need for instant gratification is increasing. We all know that right now, when it comes to purchasing something, it is ‘Buy online & wait!’.

Through Vending Commerce (VCommerce), automatic vending machines in India address a lot of these problems. People do not have to wait for their order. They get it right where they are, right when they want it. The whole experience is contactless and the products is available 24*7. This is not just retail, this is smart retail.

2) Which industries do you think will benefit from the digital-first approach provided by VCommerce or automatic vending solutions and machines in India?

In my opinion, the consumption-theme oriented companies i.e FMCG companies will benefit the most from VCommerce.

For example, let’s say a kid asks his/her parents for an ice cream, at midnight, when restaurants and food apps are no longer delivering. But a smart, unmanned vending machine downstairs in their apartment complex common area can be an accessible purchase point, and that too instantaneously, without any waiting.

There was a preconceived notion, at least in India, about vending machines being only useful for products like packaged snacks at airports. But that is fast-changing. One of our clients at Vendekin, Gadre Sea Food, is in the ready-to-eat seafood business. With our help they’ve installed automatic vending machines in societies, which dispense prawn biryani! All a customer has to do is walk down, make a touchless, cashless payment through their phone, and pick up a prawn biryani with zero-wait and no human interaction. And this is just one example. We have created similar smart vending solutions for Chitale Bandhu, a major snack player in Pune and even a local paan shop called Shaukeen! Apart from providing an extra sales channel, these vending machines also help in increasing their brand recall.

3) According to you, how can traditional businesses become digital-first?

FMCG brands like these have successfully evolved into a billion-dollar industry. In the process, they have adopted a digital-first approach to optimize their internal operations and processes. With the pandemic their customers too increasingly expect the conveniences of a digital-first approach, so in a way it is inevitable. It might take another few years, but it is already happening. We have already had success with several legacy brands like Chitale Bandhu & Haldiram’s adopting Vendekin’s VCommerce platform and technology as part of their omnichannel sales strategies.

Vending and unattended retail operators/SMEs are also finding ways to digitize their operations and sales. Vendekin helps them go digital-first by setting up new avenues of sales with smart vending solutions, or VCommerce.

I truly believe that the next digital wave will be led by SMEs: kirana and other mom & pop stores & small FMCG producers.

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A New Way to Retail with Vending Commerce

We are living in unprecedented times. Since the pandemic, things are constantly changing and evolving as we learn a little more about the virus and its implications. The demand for flexibility is at an all-time high. Whether it is the flexibility of being able to work away from a professional workplace or getting contactless home-deliveries for everything from packaged retail products to even fresh food, essential medicines and supplies. As we respond to the pandemic by adapting our lifestyle to this new normal of reduced contact or contact-less, some older innovations too are being adapted and modified to suit this new lifestyle.

One such older innovation is the vending machine. Vending machines are turning out to become an effective means of touchless distribution of products right where they are needed and when they are needed. With IoT and rapid digitization, these interactions with vending machines are becoming smarter and digital as well.

Unlike countries like Japan or the U.S., vending machines have not been very common or large portion of India’s retail pie, however this is changing with Indian businesses and customers becoming increasingly more comfortable with digital platforms and payments. Along with traditional kirana stores, malls, and e-commerce, unmanned retail through vending, is poised to become an indispensable part of distribution and sales.

Another factor accelerating the rise of unmanned retail are players like Vendekin Technologies and their touchless digital vending technology which is making vending machines in India more ubiquitous and digital.

What started as a solution-provider for providing a mobile payment system for the often-overlooked sanitary napkin vending machines, has quickly transformed into a global pioneer for unattended retail technology solutions, with multiple patents globally. Today, Vendekin Technolgies is the leading name in providing smart vending solutions to businesses in India and internationally. Apart from smart vending solutions for Fast-moving Consumer Goods (FMCG) brands, and helping existing vending operators (EVOs) upgrade to digital, Vendekin also provides the right ecosystem for new vending operators (NVOs) to flourish in a fast-growing market.

Vending Commerce

The vending business, can seem quite intimidating with a high learning curve for the average entrepreneur. Apart from the lack of domain expertise and seemingly high capital investment required to start a vending business, another problem is the maximum retail price or MRP of a product. Profit margins for vending entrepreneurs can often get squeezed when they are negotiating prices with bigger FMCG players. Identifying all these problems, Vendekin launched Vending Commerce, or VCommerce to make vending machine and unmanned retail in India smarter for customers and simpler for those looking to set up a vending business. Right from helping source the hardware to providing branded software solutions and mobile app to make the vending machines smarter, to negotiating better margins.

In this digital march of the Indian retail sector, VCommerce is poised to become an important and eventually indispensable part of a brand’s marketing, branding and distribution strategy.

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