Berg Insight, the world’s leading M2M/IoT market research provider, today released a new market report covering the connected vending machine market. The global installed base of connected vending machines reached an estimated 1.51 million units in 2015.
The first solutions for including connectivity in vending machines became commercially available more than two decades ago. It has however taken years for the technology to gain the interest of mainstream vending operators. Today, global penetration is still relatively modest and Berg Insight estimates that only around 10 percent of the world’s 17 million vending machines are connected.
The market has however gained momentum in recent years as more and more vending operators have started to deploy cashless payment systems and vending telemetry solutions at a larger scale.
Demand for cashless payments has so far been a main driver for connectivity in vending machines. Vending telemetry is however anticipated to have a more transformational effect on the industry as these solutions enable vending operators to substantially improve their operational efficiency.
North America is estimated to represent around 0.80 million of these machines, whereas the corresponding number for the European market is 0.20 million. The number of connected vending machines in other parts of the world totalled an estimated 0.51 million units at the end of 2015, mainly in Japan and Australia.
Berg Insight forecasts that the number of connected machines worldwide will grow at a compound annual growth rate (CAGR) of 18.7 percent to reach 3.6 million units by 2020. As a result, the global penetration rate will reach 20.3 percent at the end of the forecast period. Leading solution providers include Crane, USA Technologies, Cantaloupe Systems and Nayax which all have more than 100,000 connected vending telemetry and cashless payment solutions each.
The connected vending machine market is currently affected by a number of trends that are foreseen to positively impact technology uptake and innovation among the solution vendors.
Rickard Andersson, Senior Analyst, Berg Insight, said:
“The business case for vending telemetry continues to improve in line with technology advancements and decreasing costs of both equipment and connectivity services”.
He adds that cashless payments is similarly a strong driver for adding connectivity in vending machines. Mobile wallet services can enable new opportunities beyond mere payments such as mobile-enabled advertising and marketing programs that can boost customer intimacy. Other recent developments in the unattended vending space include the growing popularity of so-called micro markets.
As micro markets are expected to continue to grow at the expense of traditional vending machines, the vending telemetry and cashless payment solution providers will inevitably face a diminishing addressable market in their primary segment. This development on the other hand presents opportunities for innovative solution providers to also cater to the needs of micro market operations. Front-running players such as Cantaloupe Systems have already embraced this opportunity.
“Other solution providers are expected to follow suit and increasingly serve the promising micro market segment in 2017 and beyond”, concluded Mr. Andersson.