Micro markets are one of the fastest growing business models in the unattended retail industry. According to CCV, the number of micro markets grew by 39% in Europe between 2018 and 2020, and they are expected to have a compound annual growth rate of 1.3% from 2020-2027. NAMA and Vending Times have also reported substantial growth in North America.
So, let’s see what all the hype is about.
What Is a Micro Market?
Micro markets fall somewhere in between a corner store and a vending machine because they are small shops that are unstaffed. Micro markets sell products to customers via a self-checkout kiosk; a unique point of sale that has an easy-to-use customer interface and accepts many forms of cashless payments. This unattended retail model allows vendors to sell higher quality and higher priced products than they could in a vending machine, as they are not limited by product size or space within a machine.
Micro markets cater to all kinds of consumers, offering an excellent customer experience and a convenient way to shop. Recent changes in consumer behavior are part of the reason that micro markets have grown in popularity and numbers over the past few years.
Consumer Behavior and Expectations
Consumer behavior has changed greatly since the outbreak of the COVID-19 pandemic. Consumers are demanding more positive and frictionless shopping experiences. Shorter checkout times, varied choice, and overall convenience are some examples of what consumers are looking for the most.
Vendors are paying closer attention to consumers’ needs and demands. They know that a micro market provides a convenient experience because it can stay open 24/7, has an easy-to-use interface, can offer a wide variety of products, accepts cashless payments, and many other reasons which we will highlight below.
Trends Move Towards Cashless Payments
Changes in consumer behavior have also brought on wider adoption of cashless payments. Cashless payments make life easier for both customers and merchants because they help save time at checkout. With cashless payment methods, customers just have to take out their credit or debit card or even their phone, and don’t have to dig around their wallet for cash. Merchants don’t have to worry about counting out change for customers, and going cashless also limits their trips to the bank to deposit cash or to get the coins they might need to provide change.
Cashless payment acceptance can also protect a micro market’s security. When cash is not accepted and a cash register is not present, theft is less likely.
Benefits of Micro Markets for Operators & Consumers
On top of the benefit of cashless payment acceptance, micro markets have several other benefits for both operators and consumers.
Benefits for Operators
1. Low Initial Costs
Starting a micro market business has a low entry threshold as a self-checkout kiosk such as Nayax’s Nova Market costs a lot less than a good combo vending machine.
2. Easy Remote Management
With a proper solution, you can manage your micro market business remotely, 24/7. With a management tool such as Nayax’s MoMa app, you can manage your inventory, products, software updates, sales, customers, and more with customized notifications and alerts.
3. Small, Easy to Install Kiosk
Self-checkout kiosks are small and easy-to-install. Nova Market has plug and play installation, which helps you save time and money.
4. Customer Satisfaction
As we’ve mentioned before, customers love micro markets. They offer a convenient and frictionless shopping experience and a variety of products that can’t be found in a vending machine. With Nayax’s complete solution, you can also offer consumer engagement and loyalty tools to increase customer returns and boost your sales.
Benefits for Consumers
1. A Variety of Products
Consumers love micro markets because they offer a variety of products, from health foods to snacks to basic kitchen staples. They offer higher quality products than vending machines do, and therefore draw in more customers.
2. More Customer Interaction
A self-checkout kiosk means that your customers interact with your POS directly. They also pick and choose their products on their own, and are likely to spend more time making a decision about what to buy than they are at a vending machine.
3. Intuitive Interface
Micro markets such as Nova Market have an intuitive interface, making the customer’s experience easier and more frictionless.
4. Safe and Hygienic
Hygiene has become one of consumers’ greatest concerns since early 2020 when the COVID-19 pandemic broke out. Micro markets offer contactless payments and enable for less human interaction as they are self-service, protecting us from dangerous germs and viruses.
Trends Towards Healthier Offerings
Vending machines are known for offering unhealthy snacks and drinks, from soda with unimaginable amounts of sugar to chips and candy. However, people are becoming more health conscious, and as this trend continues to develop, it is important to stay ahead of the curve.
This is also one of the reasons why micro markets are so popular. Micro markets offer a variety of snacks including soda and chips which are common in vending machines, as well as healthy alternatives such as natural iced tea, granola, and other health food snacks. Vendors have unlimited possibilities of what to stock and can use the data they gathered from their self-checkout POS to know what they are selling more of.
Micro Market Locations
Micro markets offer a flexible business model and can be placed almost anywhere there is foot traffic. Micro markets can be set up in both open and closed loop environments.
For example, at a university, it would be best to have a closed-loop environment in which students can pay via their student ID. Having a micro market at a university campus can be very lucrative, especially if it stays open 24/7 and offers a variety of snacks or ready-made meals.
An open-loop environment can be offered at an airport or train station. Places like constantly have foot traffic and people who need a last-minute pick me up before they travel. Because customers at these locations are constantly changing, an open environment is best with an open payment system that enables consumers to pay with their preferred payment method such as a credit card or mobile wallet.
A place like a hospital or an office building would benefit from a closed and open-loop environment in which employees can pay with their employee card and visitors can pay with their credit card.
Other hotspots for where to set up micro markets are in gyms, beauty salons, hotel lobbies, malls… pretty much anywhere you can think of! The possibilities for opening a micro market are limitless. Though opening a micro market has many benefits, we do need to address its challenges, the most significant of which are security concerns.
Security Concerns of Micro Markets
Because they are an unattended business model, micro markets are not as well supervised as attended retail businesses and run the risk of theft or vandalism. Here are some tips to help keep your micro market safe:
1. Accept only cashless payments
Not having cash on sight helps reduce the risk of theft.
2. Install security cameras
Security cameras ensure the safety and security of your business.
3. Set up your micro market in a safe, supervised area
If your micro market is in a hospital or office, for example, these buildings have their own security systems which adds another layer of security on top of the cameras.
With just a little extra effort, you can ensure that your micro market will be safe and secure, giving you the peace of mind you need to focus on the more important aspects of your business.
The Future of Micro Markets
Given the growth in the micro market industry over the past few years and the changes in consumer behavior, we expect micro markets to grow substantially. Their flexibility makes them appealing for all kinds of business owners. For example, a beauty salon could add a small micro market at their reception offering healthy snacks or drinks, as could a gym, an office building, and pretty much any other kind of business.In the future, we expect to see more micro markets offering customer loyalty programs and mobile wallets where people, whether in an open or closed environment, can pay for goods via an app and accumulate loyalty points.
To get started with your micro market business, contact us today.