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Monday, April 06, 2015

Internet of Things Creates Upside in the Vending Industry

Vending in its earliest known form dates back to 215 BC in ancient Egypt, where a device has been identified that dispensed holy water at places of worship when a coin was deposited. In the U.S. market, vending is generally conceded to have begun in 1888 with the Adams Gum company and their penny gum dispensing machines.

Today, the vending machine industry is a global phenomena, and it is now part of the growing Internet of Things (IoT) connected device market opportunity. There are more than 17 million vending machines worldwide. The world's vending operators have either installed or are now considering adding Internet connectivity.

The global installed base of connected vending machines grew by 18.4 percent to 1.16 million units in 2014, according to the latest market study by Berg Insight.

Around 0.56 million of these machines have been installed in North America, whereas 0.15 million of the machines were located in Europe.

The number of connected vending machines in other parts of the world was 0.45 million, mainly in Japan and Australia.

There's already an emerging upside market opportunity. Berg Insight forecasts that the number of connected vending machines worldwide will grow at a CAGR of 18.5 percent to reach 2.7 million units by 2019.

As a result, the global penetration rate will reach 15.3 percent at the end of the forecast period.

The connected vending market has gained momentum as vending operators have started to deploy cashless payment systems and vending telemetry solutions at a larger scale.

The main market driver is currently cashless payments, which has become more and more important as the world moves from coins and bills to electronic payments such as credit cards and mobile wallets.

Vending telemetry solutions are expected to have a more transformational effect on the industry in the coming years.

"The availability of machine data in real-time coupled with state-of-the-art software platforms make it possible for vending operators to reach entirely new levels of operational efficiency," said Lars Kurkinen, senior analyst at Berg Insight.

Vending operators that learn how to benefit from the real-time availability of vending machine data in the best way will have the highest chances of prospering in the vending industry in the next decade.