Micro Markets in Public Locations Create Challenges and Opportunities

June 15, 2022

As unattended retail continues to expand beyond traditional workplaces, micro market operators must be cognizant of the challenges of serving public locations. Micro markets in transportation hubs, auto dealerships, common space breakrooms, healthcare, apartment complexes and hospitality locations offer great opportunities for operators. Clearly, these public locations will require careful consideration by operators regarding technology choices, the market design, product selection and promotion.

Growth of Public Locations

Ryan McWhirter, vice president of products at 365 Retail Markets, said that micro markets serving public venues are becoming increasingly prevalent, with most of the current growth being seen in hospitality through unattended hotel and motel lobby markets, but that is changing. “With our acquisition of Avanti, we now see our Smart Markets in multiple airport settings as well. Along with Smart Market, our Stockwell and PicoCooler products are also designed to serve public locations,” McWhirter said.

Why Markets Are Expanding Beyond the Workplace

Pointing to ongoing labor issues, including labor shortages, staff fluctuations and increasing labor costs, Peter Flesvig, vice president of communications at 365, said that unattended retail in public locations is a logical choice. Flesvig added that there are over 10,000 healthcare sites, thousands of colleges, universities, hotels, lodging sites and airports, all seeking solutions to ongoing labor issues.

At a recent conference in Italy, Flesvig said the conversation was about the coming growth of micro markets, with 30,000 new markets projected across Europe over the next five years. Flesvig noted that with all of that growth, plenty of markets will find their way into the public domain, especially as consumers become more comfortable with the concept.

Technology Needs To Enhance the Buying Process

When it comes to technology, Flesvig said that user experience is always important and that the checkout process should be easy and fast, with multiple checkout stations. “From an operator's perspective, you want to make sure that you have aesthetically beautiful technology, but you also want to make sure it's a durable and reliable technology,” he said. “With the right technology, we can eliminate lost sales, like the person in the back of the line who simply walks away after waiting too long to purchase a bottle of water.”

Design Is Key in a Public Market

Troy Geis, co-founder of Fixturelite, said design and durability are critical in a public micro market setting. “Consider the sheer volume. In a hotel, you're going to have maybe one or two people in a market at the time, maybe three. In an airport, it comes in waves as the flights arrive and depart. You can be inundated with hundreds of people walking by you in a line of 20 or 30 deep in your retail space, and then suddenly, it is quiet,” said Geis. “Planning for space and traffic flow is essential. You need to find the balance between accommodating these big waves of people and then nothing for another couple of hours.”

Steve Orlando, also a co-founder at Fixturelite, added, “Obviously, an operator who is lucky enough to be serving a high-volume public location should not skimp on quality when it comes to coolers and fixtures. The market needs to be attractive and durable and utilizing proven retail product placement strategies.”

Traffic Flow Makes the Difference

“If your market looks congested, then you may lose customers because they don't want to get caught up in that traffic flow problem and they will subconsciously avoid the store,” said Geis. “I just saw it happen in a market in Chicago. It was horseshoe-shaped, so once you entered, you were trapped until the congestion let up. I personally avoided it and went elsewhere.”

Geis added, “You need multiple points of entrance and departure. At each point of departure, you should have a payment solution. No matter how many people walk in there, you can have two or three different people checking out simultaneously without holding anyone up.”

Established Brands Thrive in Public Markets

“Product category management is important in every micro market, but it is especially critical in a public micro market setting,” said Malcolm McAlpine, Business Manager, Branded Snacks, at Mondelēz International. “A public market setting probably isn’t the place to test out new and untried products. I really don't think it's a good venue to experiment with new items,” noted McAlpine. “With a public micro market, you are going to have to make it more like a convenience store – featuring top-selling items.”

The Right Type of Promotion Will Work

“In public markets, you really have to catch the customer’s eye, because again, you’re moving people through the market fairly quickly, so you need some very eye-catching point of sale, merchandising and promotional information if you're going to promote,” said McAlpine. “1 believe the best formats of promotions are bundling and instant discounts. I think that the type of cross-channel promotion that we tested with Santikos, a San Antonio movie theatre chain, will also work in a public market setting, because it just takes two seconds to scan a QR code.”

Find more micro market design solutions for workplace foodservice environments at Mondelēz International’s insights channel.

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