Prepared food vendors are finding a new way to distribute their meals, turning to unattended retail to bring fresh food to on-the-go customers. The reason? Consumers visiting a new area might have a hard time finding a place to pick up a healthy meal.
“It’s difficult because you’re outside of your normal routine, so even if it’s available it might be challenging to find it,” Farmer’s Fridge founder and CEO Luke Saunders told PYMNTS in an interview, adding that people may lose control over their schedules when they travel — they sometimes don’t know where and when their next meal will come from.
To help tackle this problem, Saunders sought to create a service that would enable consumers to not have to plan ahead in order to have a healthy meal and simply make an impulse purchase instead. His company makes fresh food from scratch every day and delivers it to a network of automated fridges via refrigerated trucks. The primary mode of purchase for his customers are touchscreens on the fridges, which let consumers view products, add items to their carts, pay for their purchases using credit cards, and apply the purchases toward their loyalty accounts. The whole process takes around 30 seconds.
In the last six months, the company has added a new payment option. Consumers can now make a purchase through a mobile app and collect their items from the machine by entering a code. There is a very delicate balance between supply and demand at each machine. By allowing customers to order ahead through an app Farmer’s Fridge is able to reduce the friction of that supply-demand matching process. “From our end, we now know that that product is reserved,” Saunders said, adding that the feature allows customers to plan ahead, if they so desire.
Unattended Retail Settings
When it comes to locations for his machines, Saunders said they can work in many different settings, from universities to airports.
“Anywhere that we can find 12 square feet and [an] electrical connection,” Saunders said. In general, Saunders puts the machines in places where consumers are looking for quick and healthy meals. When it comes to certain locations, Saunders has found that, across verticals, some buildings might not have dining options for part of the day.
Cafeteria hours, in particular, could run from 11 a.m. to 2 p.m. After that time, a cafeteria might reopen for dinner, or it might not. In either case, for the majority of the day, consumers may not be left with many options for prepared food. In cities, workers might leave the office at 9 p.m., and the only option available at that time is fast food. Consumers might have had the opportunity to pick up a fresh healthy salad earlier in the day, but that is not always a convenient option for some people.
In terms of market conditions, Saunders said a combination of factors work to make the time right for his service. For one, the cost of technology to build the actual refrigerators — from the electric motor to the touch screen — has fallen. Secondly, consumers are now, in some cases, used to ordering food through touch screens versus an interaction with a person. Finally, consumer demand for fresh products is growing quickly and the industry is not keeping pace. There’s a physical infrastructure needed for fresh food, such as cooler and retail space, yet at the same time, Saunders sees a growing demand for that type of product.
When Farmer’s Fridge was founded five years ago, kiosks were still very nascent technology, with companies like Redbox rolling out that kind of infrastructure for DVD rentals. Now, restaurant kiosks are becoming more widespread. McDonald’s, for example, plans to bring self-service stores to 1,000 locations each quarter over the next two years, according to the PYMNTS Unattended Retail Tracker. And, in terms of other segments, 28 percent of shoppers would visit a non-grocer retailer more often if it offered self-service checkout, showing that unattended retail is gaining newfound interest in the marketplace.