IoT Tracks Vending and Coffee Machines

Vendon is partnering with AT&T to provide Internet of Things-based access to data regarding machines that dispense snacks and drinks, thereby helping operators, machine owners and product brands know that goods are available at the appropriate temperature.
Published: July 24, 2019

Vending machine technology company Vendon has teamed up with AT&T to enable a vending machine or coffee machine to remotely share its status in near-real time via AT&T’s cellular network. With the telemetry solution, companies such as vending machine owners or operators can gain automated data regarding how well each machine is stocked, how well it is operating, and when maintenance or supply workers need to pay a visit to a specific machine.

The system employs a Vendon Internet of Things (IoT) telemetry box known as the vBox, as well as cloud-based software to manage the data. It is designed to help companies prevent vending machines from running out of stock and thereby missing sales, and also ensures that malfunctioning machines can be quickly serviced. The vending machine industry has been trending up year by year throughout the past five years, according to the two companies. Long-term forecasts show greater growth for the industry, but companies must compete with other retail offerings, such as brick-and-mortar stores and online ordering.

Vendon’s vBox

Vendon’s customers fall into two categories, according to Andrey Sergeyev, the firm’s chief customer officer: vending machine companies for snacks and cold beverages, and those that make automated coffee machines. “Our customers traditionally are operators who sell or rent their machines,” he explains, “or the products stocked inside them.”

The vending of products is a complex system, Sergeyev says. Companies can sell or rent machines, or simply offer maintenance services. Because such services are, by nature, provided in remote locations, the companies face a challenge in managing their fleet of assets. Traditional machines that sell snacks, as well as cold and hot drinks, are restocked at regular intervals, based on calendar schedules.

Vendon launched in 2009 in Latvia with an SMS text-messaging payment solution so that vending machine customers could pay for products using their smartphone and bank account information, without requiring cash. Since then, the firm has been examining the market and discovering ways to make vending and coffee machines more intelligent. The company serves such customers as Latvia’s King Coffee Service, Pelican Rouge and Vending Land.

Most vending machines track data, such as the machines’ temperatures, for maintenance purposes, in addition to the number of purchase transactions that take place. But that information can only be accessed by a service provider physically visiting the machine. Recently, Sergeyev says, “People are starting to understand they need to make their machines smart—they want to be able to make decisions based on [near-real-time] data.”

The primary causes of headaches for those in the vending business, according to Sergeyev, are inefficiency in maintenance and stocking, and the need to maximize sales to compete with stores and online food retailers. “They need to know the machine works and sells products properly,” he states, “and if it’s broken, they need to know that. Every minute it’s down costs you money.”

Another challenge for vending machine companies is to understand the behaviors and preferences of their customers. Managers cannot be in all places at all times, so they simply do not know which products are more popular at what locations, or which products are not selling. In the case of beverages, for instance, some recipes may sell more at one location—at a school, for example—while others may be more popular at a gas station or a mall. “When you have a machine, you need to monetize every square inch of it,” Sergeyev says, but understanding customer preferences is out of reach with most systems.

The system that Vendon provides consists of the vBox device with a built-in GSM modem, a GSM antenna and an integrated circuit, as well as a wired connection to the machine’s built-in sensors that track such details as power and temperature levels. Vendon manufactures the box at its Latvian factory. The device is designed to be plug-and-play. The vBox collects data and then forwards it, along with the device’s unique ID number (linked to the machine itself and to the customer’s data), to Vendon’s cloud-based software. AT&T is providing the cellular connection to filter and transmit that data over a secure network.

AT&T’s Kelley Duarte

Users can view the data on a Vendon dashboard via a Web application or on a mobile device using Vendon’s mobile app. With the app, customers can receive an alert if the machine experiences a problem, as well as gain some diagnostic information, such as the fact that a door might not be closing properly. The system can also detect when a product has run out, by identifying how many times a particular product has been purchased since the machine was last restocked.

By knowing which products are being purchased, when this occurs and at which location, companies can begin to optimize their product offerings. For instance, Sergeyev says, if a machine were to sell donuts at a times when coffee sales were highest, a business could determine that people were buying more of both products.

With the sales data, Sergeyev says, companies can maximize the stocking of popular beverage recipes or snacks, as well as identify where machines were over- or under-performing. Users can predict when a machine may be expected to run out of stock, and they can view when service may be necessary, based on rising temperatures or other data. If a machine lacks built-in sensors to detect this type of data, Vendon can offer the sensor as well as the vBox.

The system is intended not only to increase sales, but also to reduce the number of unnecessary visits by employees to restock products that haven’t yet sold, or if a machine appears to be functioning properly and does not require maintenance. That reduces not only labor costs, Sergeyev notes, but fuel costs as well. “At the end of the day, it’s all about the data,” says Kelley Duarte, AT&T’s VP of IoT sales. “Vendon is an amazing company to work with,” she adds, citing its innovative focus.

AT&T is bringing Vendon’s solution to more customers around the world, Duarte adds, based on its large network. “AT&T, as a global organization, can be flexible and agile,” Duarte says, in order to meet customers’ needs. “The value we bring is our connectivity in over 200 countries. We have teams with resources all around the globe.” That means Vendon can offer its system across North America, as well as in Europe and Asia. Currently, some of Vendon’s customers are piloting the telemetry system to manage stock levels, maintenance and analytics.