Market research firm Canalys reported that 28.5 million smart watches will be shipped this year, an 18% increase over 2016.
Apple and Samsung smart watches have been equipped with NFC payment capability for a couple of years however payment with the smart watch is rarely promoted, even as mobile payments grow year over year.
A few weeks ago, I received a Samsung Gear S3 smart watch from my family for my birthday. I am wondering how I lived my previous 39 years without one. It is a great device and looks great with upgraded bands. While shopping with my wife at Lowe’s Home Improvement in Garden City, NY, I decided to buy a bottle of water for the ride home from the vending machine located at the exit. Note that I can’t walk past a vending machine without at least a quick inspection of function, selection and operator.
As I was reaching for my wallet to pull out a credit card, I noticed the machine was equipped with a credit card reader with NFC. I decided to try out my smart watch equipped with Samsung Pay to purchase the water. I purchased a $1.50 bottle of water, from a 15 year old vending machine, and was charged a two-tier pricing fee. I had possibly the best consumer vending experience of my life!
This is great news for vending operators!
- More and more machines can accept NFC payments!
- According to the 2016 State of the Industry report by Automatic Merchandiser, machines equipped with cashless readers has increased to over 15% in 2016.
- This means there are over 600,000 machines that are already equipped to take mobile payments by smart watches.
- Machines old and new are equipped with NFC enabled card readers.
- You don’t need to buy new machines to accept smart watch payments.
- A technology consultant is not required to expand NFC in your business.
- Millennials have adopted mobile payments and expect to be able to use mobile payments to buy from your vending machines.
- New watch owners want to try it!
- Everyone who just purchased or received a smart watch is looking to try out their new watch to make a purchase. Encourage them to use it in the vending machine. There are 28.5 million test transactions that will be hitting the streets this year. I accounted for 2 to start. How many more can we capture that will make smart watch wearers into smart vending consumers.
What can vending operators do to take advantage of the growth in smart watch & mobile payments in general?
- Promote! Promote! Promote!
- Add consumers using their smart watch to sales material.
- Wear a smart watch and explain the capability to clients you meet.
- Use e-mail marketing to promote smart watch capabilities to your client base.
- Promote smart watch capabilities on your social media pages.
- Add a video like mine to your web site.
- Expand cashless deployment
- If you haven’t already committed to going fully cashless, at least consider placing cashless in all of your high volume machines. Simply sort a list of machines by sales highest to lowest and identify any machine in the top 20% that does not already have a reader. The initial bump in sales, the two tier pricing capability and the leasing programs available from the manufacturers make this an easy decision.
Traditionally, vending is years behind retail in technology and consumer engagement. In mobile payments, vending is finally on par with retail in the pace of mobile payment acceptance. Fortunately for the operators, this is a technology that has a direct, positive impact on consumer experience, even in older machines without a large capital investment.
Please take advantage of the technology you already have in place by using very cost effective techniques to spread the message. Feel free to use my video or screen shots from it in your promotional material.