5 Lessons Learned from Deploying 500+ Unattended Retail Stores
In 800 BC, before the likes of Costco warehouses or shopping malls, the first retail markets opened their doors in Ancient Greece. Merchants gathered in the city center of Agora to sell directly to their customers, who were gathered to socialize and shop. Throw in a Starbucks and it sounds like the ancient version of the Grove! Not much has changed since then, except retailers today have access to waaay better technology to improve the customer experience.
We know a few things about that, which is why we’re pulling back the veil to impart the wisdom learned from operating 500+ stores generating nearly $10M in revenue. We’re eager to share how to sell our service, optimize resources like delivery, and avoid obstacles while scaling Byte’s unattended retail platform.
1. Fresh Food is a Must-Have for Workplaces
Until Byte’s arrival, companies had very few decent food options. We noticed that 99% of companies weren’t offering fresh food to their employees because it was too expensive. This was a significant pain point, yet a tremendous opportunity. It’s no surprise that well-fed employees enable their teams to be more productive, happier and healthier. To get our first Byte stores deployed in 2016, we called local offices and offered to set up a Byte store at no cost to them. We witnessed immediate traction because offices were clamoring for fresh food on-site. Within several weeks we had 20 locations generating revenue around the Bay Area.
This put Byte Foods’ value proposition into perspective.
The demand for fresh food in the office was enormous and the cost could be passed along to the customer. We saw companies like Facebook and Google spending millions of dollars a month to provide quality food for their employees, so they were clearly seeing a solid ROI. These insights influenced our pricing strategy to begin charging a monthly ‘subscription’ fee for our completely turnkey service.
Growth accelerated month-over-month, and we saw companies for whom this was never an option begin offering fresh meals at work. We were thrilled to have traction in the usual places of technology, finance, services industries, but also in places you wouldn’t expect like manufacturing, government and nonprofits.
Takeaway: Workplaces understand the value and impact of having fresh food on-site—and they’re willing to pay for it.
2. Optimize Delivery Frequency and Time
We were overly cautious out of the gate when it came to food spoilage, making deliveries and daily product inspecting. Interestingly, our food didn’t require that much attention. Our average shelf life hovered around 3-7 days before losing quality and freshness. That meant we could deliver as little as twice a week without compromising on the customer experience. On average, we now make three deliveries per week to our Byte Food stores – some shops receive more frequent deliveries due to sell-through.
In the early days, all deliveries happened in the morning because everyone wanted a freshly stocked store to start the day. Naturally, this created huge peaks on our delivery routes, which hurt efficiency and pushed deliveries back later and later into the day. We solved the issue by moving the majority of our deliveries to after-hours, smoothing out the delivery peaks and eliminating issues around traffic or our drivers being a distraction for the employees. It also removed any driver hiring bottlenecks, where we could make more deliveries with fewer drivers.
Takeaway: Delivering food after-hours and at a frequency matched to sell through at a given location has proven to be the most efficient and cost-effective way to restock.
3. Traditional and Next-Gen Vending Machines Just Don’t Cut It
Byte sources its food from third-party suppliers – that’s why we’re like a mini Whole Foods in an office. Between variously sized drinks, meal packages, and snacks, it was crucial that our store wasn’t restricted by pre-sized slots. There was no way even newer, more versatile vending machines could handle the diverse range of products we were offering.
Ergo we knew our stores must be more than a redesigned vending machine. That’s why we included different configurations with expandable and retractable shelving slots for any size product. Our technology platform is capable of allowing a variety of products in a single row, so you no longer have to stock a single SKU “all the way back.” Since it’s connected to the internet, the operator can see real-time inventory across an entire fleet of fridges, which includes product expiration dates, change product pricing and much more.
Takeaway: Your technology partner can make or break the success of your business. A less flexible, traditional vending machine never could have secured our place in 500+ stores
4. Pricing Should Be Highly Customizable
Some customers wanted the ability to subsidize their food with varying discounts or even give it away. We had requests for employee allowances, incentive discounts, and company sponsored happy hours. Clients even wanted to subsidize food just for their graveyard shift employees.
It’s clear: providing flexible per-location pricing models helped us land dozens of customers. Our food wasn’t simply an amenity — it was a tool for offices to drive employee satisfaction and build culture.
Takeaway: Giving businesses flexibility over food pricing reframed our stores as an opportunity to create value for employees, rather than just another food option.
5. Precise Food & Sales Data Is Non-Negotiable
We knew each location would want their own unique food mix, we just avoided too much customization. Indian cuisine, for example, sold tremendously well in 20% of our stores, but flopped in 80%. Shutting off stocking Indian cuisine at those locations drastically cut our waste — which improved our overall margins — all thanks to granular data provided by Byte Technology’s platform.
This data enabled us to accomplish things that would have otherwise been impossible:
- Learning how to identify per-location preferences. Some places saw strong demand for breakfast sandwiches, while others frequently had employees stay late for dinner. Anticipating these trends and adjusting product selection has been a boon for Byte.
- Catching product fatigue early. Variety is the spice of life. We noticed when office enthusiasm for certain items waned or when sales data dipped, which made it easy to swap out food with something new and seasonal to get consumers excited again.
- Accurately tracking food spoilage. With each delivery, the Byte Technology platform automatically records products that did not sell and removes them from the store. In addition, we can see how long each product has sat on the shelf and proactively discount it. We’ve built a more profitable business while offering our customers a great user experience.
- Created predictive sales algorithms for optimized purchasing. These models tracked historical sales and spoilage data, current shelf life and expected demand to help inform ordering, minimize spoilage and inform stocking across every store.
Managing inventory and demand can’t be done in an Excel spreadsheet when you have hundreds of stores in the field. Having real time data and demand planning from the Byte Technology platform was key.
Takeaway: The key to reducing food waste, purchasing the right products on a per-location basis, and maintaining control of back-end operations comes down to accurate, actionable data.
People aren’t going to stop eating anytime soon, so we designed the smartest retail system to get fresh food into micro-locations. We know unattended retail is the right solution for brands to expand beyond traditional brick-and-mortar stores. While demand for Byte technology has been proven beyond a shadow of a doubt, retail is a tough nut to crack (been there!) regardless.
That’s why we’ve shared our best tips and tweaks to alleviate early growing pains with our partners. Byte’s clever technology makes operational logistics like forecasting and inventory management a breeze. The rich and precise data collected offers powerful insights and customizations to keep our partners ahead of changing consumer tastes and trends in the ever-evolving retail space. When it comes to retail, one size rarely fits all. Thanks to our delicious data, customers and Byte partners get exactly what they want.
Let’s extend the reach of your products into local businesses