EXPANDING INTO A MULTI-MARKET OPERATOR

Imperial Vending began as a one-man coffee service in 1979 with Paul Tims as the sole employee. After a number of years of growth in his Tulsabased business, Tims started looking for other ways to boost revenue during the hot summer months when coffee sales tend to slow. He entered the vending business in the early 90's and began expanding to other metropolitan areas by the late 90's. Imperial Vending now boasts annual revenues of more than $55 million, a far cry from its humble beginnings when Tims generated $30,000 in annual coffee sales. Imperial Vending now employs more than 400 people and has nine route centers serving locations in Oklahoma, Arkansas, Kansas, and Missouri.

FOCUSING ON SERVICE AND QUALITY

Imperial Vending has earned a reputation for outstanding service and quality and is always on the lookout for new ways to enhance this brand image. The company has used technology to improve service excellence since entering the vending business in the early 90’s. Handheld route systems, for instance, have helped Imperial Vending closely monitor customer consumption profiles and maintain transparent and accurate reporting for customer commissions.

Deploying Seed technology from Cantaloupe Systems gives Imperial Vending another edge in servicing its customers and boosting its market image. “We knew we could increase the value we bring to our customers just by keeping their favorite items in stock. Wireless technology gives us better visibility into real-time inventories and purchase trends, allowing us to get the right products to our customers at the right time,” explained Whorton.

“We wanted to move toward wireless technology because we needed more accurate and up-todate inventory status in order to make pre-kitting successful.”

ADVANCE ASSEMBLY TO IMPROVE EFFICIENCY

Another key reason to move to wireless technology was to improve operational efficiency. Before deploying Seed technology, Imperial Vending had already attempted another solution for advance assembly of delivery orders, a technique known in the industry as pre-kitting. However, Imperial Vending found that their pre-kits were often significantly inaccurate because of unpredictable variations in account sales. While this early test of pre-kitting helped get drivers on their way from the warehouse more quickly, it did little to help with route efficiency and keeping fresh products in customer vending machines.

Whorton and Tims saw an opportunity to improve this situation using wireless technology to capture machine inventories and statistics. “We wanted to move toward wireless technology because we needed more accurate and up-to-date inventory status in order to make prekitting successful. We also perceived an opportunity for improving route efficiency,” explained Whorton.

TEAMING WITH THE MARKET LEADER

Whorton acknowledged that the decision to choose Cantaloupe Systems was an easy one: “When we began looking into wireless technology, Cantaloupe Systems already had a partnership with Vend Marketing Institute (VMI). As a VMI member, we were able to piggyback on that partnership and bring Cantaloupe Systems’ Seed technology in-house. Much of the vendor evaluation homework had already been done by VMI.”

Tims spoke more about the decision: “We looked at what Cantaloupe Systems had to offer and could tell that it would indeed provide the visibility we were looking for. Cantaloupe Systems had a number of satisfied customers and a good reputation, so we felt compelled to move forward with a trial project.”

Imperial Vending got started by installing Cantaloupe Systems’ Seed in 200 snack and soda machines on three adjacent routes in the Tulsa area. This initial implementation was fully deployed within 90 days and Imperial Vending began using Seed technology in parallel with the existing pre-kitting software to verify effective operation. After the Seed trial proved to be a success, the company continued to expand the implementation rapidly. Imperial Vending now has Seed technology deployed in five of its nine markets and has approximately 4,500 machines connected to Seed.

IMPROVING MARGINS

Since the economic downturn started in 2008, Imperial Vending has noticed slower sales per machine at many of its customers. Whorton explained how this put pressure on operating margins and necessitated cost cutting: “With the slower economy, we needed to offset the reduced revenue per machine by reducing our variable costs. Cantaloupe Systems helped us increase margins by helping us improve route efficiency and reduce operating expenses.”

The Seed implementation and pre-kitting of deliveries enabled Imperial Vending to consolidate its routes. Drivers were able to visit more locations per day and spend less time at each location. This had a direct impact on reducing route operating expenses and improving sales margins per route2 :

• 45.5% reduction in total route count
• 35.6% reduction in route payroll expense as a percent of sales
• 27.5% increase in sales per route stop
• 17.1% increase in route stops per day
• 76.8% increase in average revenue per route
• 27.5% improvement in route stop efficiency (sales per route stop)

“Cantaloupe Systems has allowed us to improve route efficiencies well beyond our expectations,” said Tims. “The rating for Cantaloupe Systems’ ‘route efficiency impact’ should be 5 stars!”

“The positive environmental impact... validates our progressive approach...”

LOWER VEHICLE COSTS AND A GREEN IMAGE

By eliminating 45.5% of its routes through route consolidation, Imperial Vending has also reduced its vehicle costs. Trucks are being driven fewer miles, which not only affects oil and gas consumption, but also reduces ongoing vehicle maintenance costs for tires, service repairs, and periodic service upkeep. In addition, trucks are carrying less weight due to pre-kitting of product deliveries, which eliminates on-truck inventories and results in trucks coming back nearly empty. The average weight during deliveries is therefore less, which helps improve gas mileage and reduces wear and tear on the vehicle.

Reduced vehicle consumption also helps improve Imperial Vending’s image as a green supplier. “Sustainability is becoming an increasingly important topic with our customer base,” said Whorton. “The positive environmental impact we've made through our Cantaloupe Systems’ Seed implementation validates our progressive approach towards sustainability and provides a foundation for building rapport with customers regarding their stance on sustainability issues.”

CERTIFICATION OF CASE STUDY

The findings presented in this case study, regarding the impact of Cantaloupe Systems’ technology-enabled vending solutions, have been independently conducted and verified by Bachtelle and Associates, a nationally recognized consulting and market research firm focused on the vending and automated retail industries.

Bachtelle and Associates conducted direct vending operator management interviews, followed by in-depth analysis of company financial and operational reports for accounting periods prior to and after the implementation of the Cantaloupe Systems’ technology and associated software and services.

The numeric findings included within the case study incorporated standardized accounting and financial return analysis techniques, including the application of appropriate federal and state tax effects to complete the payback and return on investment calculations.

An additional statement including a broadened summary of applied methodology is available upon request.