Mobile Technology Takes Dispensers Online

There is a small but growing number of entrepreneurs creating new business-to-consumer and business-to-business models for monitoring and delivering wireless services to any industry that dispenses a product -- from soda machines to copiers.

What makes the technology especially appealing is that, in almost all cases, the wireless-commerce platform can be deployed without partnering with a telecommunications provider.

"One of the big myths being perpetuated is that mobile commerce is the proprietary property of the telecoms," says Gedaliah Gurfein, CEO and founder of TeleVend Inc., a wireless platform provider in Jerusalem. "That's what they would like you to think. But if you are a brick-and-mortar company, you don't want a sign on your vending machine that says 'Sprint PCS users only.' "Gurfein is, of course, referring to the so-called "walled garden," which limits the choice of easily accessed cell phone sites to those vendors that have paid wireless data telecom providers for better placement. Rather than requiring proprietary handsets and WAP (Wireless Application Protocol) server gateways foisted on business-to-consumer vendors and their customers, TeleVend technology puts the intelligence only on the server, allowing consumers to use any phone to buy sodas at vending machines, transfer money to ATMs, or pay parking meters without having any coins in their pockets.

Of course, these dispensers need to have either a wireless modem or a paging device inside. TeleVend, which mainly focuses on the business-to-consumer market, created its service by working with hardware platform vendors to install a US$4.50 wireless modem inside the dispensers. This fall, TeleVend will roll out its first person-to-person -- or "p-to-p," as Gurfein calls it -- service with a global ATM manufacturer.

The service, for example, will allow parents to remotely enable an ATM machine at their child's college to dispense cash. In this case, either the parent has given permission to TeleVend to access the cash from his or her checking account or the money is debited from a prepaid mCard, which acts like a prepaid phone card and is purchased through TeleVend or a TeleVend reseller. The poor and desperate student dials in to any TeleVend-enabled ATM machine using the server number displayed on the machine and accesses the cash without going through any checking account.

Similar remote services are envisioned by Gurfein, such as dialing in to pay for parking meters, restaurant orders, supermarkets, or gas stations. The user dials the number on the displayed dispenser, which connects to a TeleVend server. The user picks from a selection of transaction options by keying in or voicing the numbered selection. Once a choice is made, the server signals the vending machine to complete the transaction.

Services requiring payment can be billed to checking accounts or credit cards, or they can even be charged to the cellular phone bill.

But the ability for consumers to pay for their soda with a phone call and have the soda can drop to the bottom of the machine is only part of the story.

Wireless technology is now allowing soft drink bottlers to track inventory and maintenance on the 2.3 million soda machines in the United States.

This is happening because the vending machine industry, perhaps unlike the computer industry, has agreed on a single specification. The DEX (Digital EXchange) specification, set forth by the National Automatic Merchandisers Association, defines how information is given out by the vending machine controller. Data that can be monitored includes the number of selections in a machine and the number of columns where all the cans fill, with the selection mapped to columns. In addition, the DEX specification has a standard for reporting error codes for payment validation, jams, and other operational problems, all of which use ASCII text blocks to report.

Two years ago, two Austin, Texas-based companies -- Concero, an e-commerce solution provider, and Isochron, an ASP (application service provider) in the dispensing industry -- teamed up to create VendCast and PolarCast, which are built on the basis of the DEX specification. These two products, the first of many envisioned services, are now being used by soft drink bottlers, ice machine dispensing companies, and brand-name soft drink manufacturers for truck routing, maintenance, and sales and marketing data.

Wirelessly monitoring dispensers creates value for all members of the supply chain.

"As a corporate provider of manufactured concentrates and syrups, our interest for Dr Pepper and 7 UP is to understand which and how much product is moving through the vending machines," says Robert Morales, a representative for Dr Pepper, in Plano, Texas.

In the soda vending machine business, the manufacturers of the various products, Coca-Cola, Pepsi, Dr Pepper, and regional brands, share bottlers and vending machines.

"If we can show the bottler that there is demand for a noncola product, we can tell the bottler that they don't need three slots for Coke Classic," Morales says. He also points out that diet sodas usually sell better at machines located in office buildings and college campuses as opposed to supermarkets.

There is also a big payoff for bottlers to more efficiently plan their routes.

If a bottler can eliminate 95 percent of the instances a machine is out of stock, that translates into a 12 percent to 15 percent increase in sales volume, Morales notes.

"In the morning if out of 50 machines there are 30 that are 75 percent full, there's no reason to stop at those machines," Morales explains. "If they have 20 machines only 20 percent full, and based on past sales they know that they better get to those machines first, they can dramatically increase sales."With a life expectancy of 10 years for each vending machine, more than 200,000 soda machines are being replaced annually, almost all with the DEX specification built in. Someday soon, you may be dialing in to a vending machine for a can of soda and charging it to your phone bill, while a server in Plano, Texas, records the fact that another can of Dr Pepper has just been sold.

Providing hands-off control for dispensers around the countryThese technology and service providers offer solutions for wireless dispenser transactions and back-end communications.

* TeleVend ( Business-to-consumer cashless mobile-commerce platform* Isochron ( ASP for monitoring dispensers* Concero ( E-commerce services company

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