The number of connected vending machines globally will reach 3.6 million units by 2020, growing at a compound annual growth rate of 18.7 percent, according to a new market report from Berg Insight.
Connected vending machines provide time and location-based data pertaining to sales, inventory and customer preferences. They can help vending machine operators to reduce operating costs and increase sales.
The global installed base of connected vending machines reached an estimated 1.51 million units in 2015. North America is estimated to represent around 800,000 of these machines, whereas the corresponding number for the European market is 200,000.
The number of connected vending machines in other parts of the world totalled an estimated 510,000 units at the end of 2015, mainly in Japan and Australia.
The global penetration rate will reach 20.3% at the end of 2020.
"The business case for vending telemetry continues to improve in line with technology advancements, and decreasing costs of both equipment and connectivity services," said Rickard Andersson, Berg Insight senior analyst.
Leading providers include Crane, USA Technologies, Cantaloupe Systems and Nayax, with each having more than 100,000 connected machines.
The connected vending machine market is currently affected by a number of trends that are expected to positively impact technology uptake and innovation among the vendors, according to Berg Insight.
Cashless payments are a strong driver for adding connectivity in vending machines, Andersson said. Mobile wallet services can allow new opportunities beyond payments, such as mobile-enabled advertising and marketing programs that can boost customer intimacy. Other recent developments in the unattended vending sector include the growing popularity of so-called micromarkets.
As micromarkets are expected to continue to grow at the expense of traditional vending machines, providers will inevitably face a diminishing addressable market in their primary segment, he said. This development, on the other hand, presents opportunities for innovative providers to also cater to the needs of micromarket operations. Front-running players such as Cantaloupe Systems already have embraced this opportunity.
"Other solution providers are expected to follow suit and increasingly serve the promising micromarket segment in 2017 and beyond," Andersson added.
— Edward Gately, Contributing Editor, Channel Partners
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