How Artificial Intelligence Makes Vending More Profitable

Artificial intelligence (AI) has emerged as one of the most powerful tools in improving business performance, and the benefits have already been realized by forward thinking vending operators. A presentation on AI by Hivery, an Australia based AI technology company, drew an enthusiastic audience during the recent Atlantic Coast Exposition in Myrtle Beach, S.C.

“It’s a massive opportunity to increase revenue, decrease costs and ultimately meet consumers’ needs,” said Sharon Kolstad, business development and change lead manager at Hivery.

AI, a computer tool that can perform tasks normally requiring human intelligence, is not completely foreign to most people today, although many people may not recognize its presence. Kolstad noted that Instagram, Facebook and Siri are consumer tools that use AI. Financial service companies use AI in fraud protection.

The definition of a successful business is a series of good decisions coupled with good execution, Kolstad said. One of the key benefits of AI is that it allows a business to make good decisions by accessing more data faster.

At the present time, companies are only leveraging 12 percent of available data. “It’s because that’s what’s humanly possible,” she said. By 2020, there will be 6 billion smartphones and 50 billion connected commercial devices generating data.

Businesses have to utilize more of their data because consumer service expectations are rising, Kolstad said. It will be necessary to leverage more of the available data to make better business decisions to meet these higher expectations.

AI doesn’t replace humans, Kolstad said. While AI can complete a task faster and better than humans acting alone, AI alone does not match the performance of working in partnership with humans. She said an investment in AI and human collaboration can boost revenues by 51.8 percent.

AI working in conjunction with pathologists has made significant progress in detecting breast cancer early, for example.

The Hivery AI vending solution, called Vending Analytics, helps determine the right assortment, the right price point and the right space allocation for vending products in a machine. Vending Analytics learns over time by using a company’s sales data to recommend product assortment, space-to-sales, and price at an individual vending machine
level.

The solution utilizes robotics, sensors, natural language processing, speech recognition, text-to-speech, computer vision, machine learning, machine reasoning, decision making, deep learning neural networks, business analytics and data services.

The Hivery solution was able to determine the most profitable assortment for beverage machines in a hospital. The assortment varied significantly based on where in the hospital the machines were located.

The AI was able to consider the differences in product demand based on where in the hospital the machines were located.

The AI solution allocated very few facings to energy drinks in a machine placed in the hospital’s emergency waiting room. This allocation contrasted significantly to the machine in an area for the doctors and nurses. Where the doctors and nurses consumed a lot of energy drinks, people in the emergency waiting room had little appetite for these drinks.

“When you’re sick, you don’t need more caffeine or more energy,” Kolstad said.

Kolstad presented a video on the success of this company, Reyes Coca Cola Bottling, based in Irvine, California, in deploying the Hivery AI vending solution.

The Hivery solution resulted in 10 to 15 percent higher sales, 15 percent fewer restocking tips and better overall performance. The company can now have the right product mix for each machine and is achieving higher machine fill rates and servicing more machines in less time. The company has added 10 to 15 more products to the machines’ product mixes.

Prior to deploying the Hivery solution, the Reyes team had to gather information from numerous sources on a spreadsheet.

The cloud-based software, which sits atop the existing vending machine management software, identifies the right product, the right space-to-sales ratio and the right promotional activity for products in every one of Reyes’ vending machines, Kolstad said.

For more information visit https://www.hivery.com/

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