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RFID Transforms Michigan Vending Company

Sterling Services operates self-service convenience stores that replace on-site cafeterias, saving businesses money and satisfying customers.
By Jill Gambon
Feb 16, 2009Sterling Services, a food-service management and vending company that has operated in the Detroit area for some 23 years, has employed radio frequency identification technology to transform its business. For the past three years, the company has been running RFID-based self-service convenience stores in office buildings, manufacturing facilities, hospitals, a health club and even a high school.

The RFID-enabled stores, known as Fast Track Convenience, often replace money-losing company cafeterias or vending machines. Operating the Fast Track stores has proven to be more profitable than the vending machine business, says Ray Friedrich, the company's general manager.

After making their selections, customers bring the items to a kiosk equipped with an RFID reader.

The RFID-based retail system was developed by Freedom Shopping, a privately held, 14-employee firm in Hickory, N.C. The company's self-service systems are deployed in approximately 30 retail sites in the United States. Resellers can brand the stores with whatever name they choose. The system includes RFID tags and interrogators from a variety of manufacturers, as well as software and a checkout kiosk. "We use the [hardware] brand that's best suited for the circumstances," says Rob Simmons, the company's CEO. Freedom Shopping also maintains a database containing all of the product, inventory and sales information for the self-service stores.

Sterling owns the equipment and operates the convenience stores, while its customers provide space at their facilities. "Companies don't want to subsidize food services," Friedrich says. With the Fast Track stores, businesses can provide workers with an amenity without incurring costs. A business typically spends $50,000 to $150,000 operating an on-site cafeteria, Friedrich estimates. At a time when companies and organizations are slashing expenses, there is little taste for supporting food operations that lose money. The Fast Track stores offer far greater choices than vending machines, he notes, while avoiding the labor costs associated with staffing a restaurant or cafeteria.

Friedrich purchased his first retail system from Freedom Shopping in 2007 after seeing it demonstrated at a trade show. He had no customers lined up at the time, but was convinced the self-service stores would win over businesses. "I thought it was brilliant," he says. The first customer he showed it to—an auto parts manufacturer—signed on and built a room on its property for a Fast Track store. Two years ago, Sterling created a separate division, known as Fast Track Convenience, to market the retail systems. The company now has more than a dozen Fast Track Convenience stores in southeastern Michigan, including those at Garden City Hospital, Ford Motor Co. and the Franklin Athletic Club.
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