Like many businesses, the vending industry experienced hits caused by the Covid-19 pandemic. While cashless approaches continue to persist post-pandemic, several economic, corporate and social changes have forced operators to reevaluate how to take their businesses forward and how cashless approaches fit into their futures.
In Cantaloupe’s most recent webinar, How Vending Can Thrive in a Cashless U.K., Cantaloupe’s Shaun Burger and The Automated Vending Association’s David Llewellyn discuss the current state of the vending industry, if cash still has a place in the industry and the future cashless trends U.K. operators should be keeping an eye on as the industry continues to evolve.
STATE OF THE INDUSTRY
The need for cashless payment approaches in the U.K. saw critical and necessary increase during Covid-19; while that need has continued post-pandemic, the U.K. has experienced several changes caused directly by the unsteadiness of the last few years, including inflationary pressure across the food and beverage industries – pricing has gone up around 16% – as well as ubiquitous hybrid working models that have changed interactions between corporate and vending industries.
2023 was a year of recovery for the vending industry. According to Llewellyn, there has been a 40-50% increase in micro markets over the last three years, and the number of smart fridges in the United Kingdom has more than quadrupled in the last 18 months.
As Burger notes, especially post-Covid, Cantaloupe has seen an increase in sales verticals in the last couple of years.
“With large scale retailers looking at alternative technologies like vending equipment that can be adopted in order to service some of their requirements, we certainly have seen a significant increase in the demand for cashless devices being implemented,” says Burger. “In a lot of instances, these are complementary solutions to traditional physical cash and note handling.”
Despite the increase in cashless vending options, there are still gaps in operators’ understanding of end-to-end systems.
“There is still a large number of vending operators who are not fully taking advantage of alternative vending equipment,” says Burger.
IS CASH DEAD?
According to the 2022 AVA Census, about 72% of transactions were completely cashless; because of the cashless approach, sales went up by 38%.
While Burger notes that there has been a “reduction in the use of cashless in the marketplace”, there is resistance in the U.K. to completely adopting cashless-only approaches.
“Only about 10% of pay-vend equipment is completely cashless,” says Llewellyn. “There is still that resistance to taking coin mechanisms off machines.”
About 6% of vending machines in the U.K. – such as tabletop, floor-standing and in-office coffee machines — are free-vend, meaning they are less likely to be cashless.
Llewellyn says there are two reasons why the U.K. has not gone completely cashless. Firstly, around 2.8 million people are currently unbanked, meaning they can only pay for their needs in cash. The other factor contributing to the resistance to cashless is the current price of coffee.
“We have to bear in mind that coffee will always be the main driver for the U.K. market,” says Llewellyn.
The average price for a cup of coffee in the United Kingdom is around 36 pence; most individuals over the age of 30 – the main consumers of coffee – are less willing to use a cashless method to pay for such a small price.
“With large scale retailers looking at alternative technologies like vending equipment that can be adopted in order to service some of their requirements, we certainly have seen a significant increase in the demand for cashless devices being implemented. In a lot of instances, these are complementary solutions to traditional physical cash and note handling.”
Shaun Burger, Managing Director, Cantaloupe
THE FUTURE OF CASHLESS VENDING
Both Burger and Llewellyn agree that they are not sure how long coin mechanisms will continue to thrive in the U.K. vending industry, and that cashless approaches, such as micro markets and smart fridges, will very much drive the future of the vending industry.
“You will see more and more transactions being driven by connected machines”, says Llewellyn, who notes that 80% of vending machines are now connected in one way or another and many operators are completely refurbishing legacy pieces of equipment so that that equipment can tie into new payment systems.
Burger underscores the importance of cohesive education to help transition vending businesses into a technology-forward era.
“Choosing a technological player in the marketplace that can actually provide the advice and guidance, as far as this from an overall perspective is concerned, is key,” he says. “From a Cantaloupe point of view, [our] technology typically is designed and developed to support vending operators to have more management control over what they actually supply into the different segments of the market that they supply to.”
Cantaloupe supplies a full suite of solutions to vending operators. Contact us today to learn more about how Cantaloupe’s cashless vending approaches can help simplify your business and increase your revenue.