Future business requires increased flexibility and individual solutions

Andreas Fetscher, Selecta (left) and Caroline Blomé, DLL (right)

DLL and Selecta have developed a completely new and unique financing solution where profit is shared between the parties. “DLL has given us that combination of security and flexibility that we look for in a financial partner ”, says Andreas Fetscher, Business Developer at Selecta.

There is a pleasant aroma of coffee in Selecta's premises on Torggatan in Solna, a few kilometres north-west of Stockholm city. The reception area is lined with coffee machines offering beans from coffee-producing countries all over the world, roasted and brewed to suit the average consumer as well as the connoisseur. “Coffee is our business”, says Andreas Fetscher, Business Developer at Selecta, and serves himself a cup of steaming, black Pelican Rouge from Selecta’s own roasting company.

There are few things in Swedish society more established than drinking coffee and having a coffee break. Coffee brewed in Selecta's machines is consumed in more than 16,000 Swedish workplaces, and the coffee machine is a natural and important assembly point. Smaller enterprises may have one machine while larger companies can have up to 500 coffee machines located in different departments.

“In Sweden, Norway, Finland and the Netherland our business is mainly coffee, while in rest of Europe it is vending machines”, says Andreas. “In Switzerland there are 90 percent vending machines and 10 percent coffee. In Sweden it is quite the opposite, but also here we see large and unexplored upsides for vending”.

Future business requires increased flexibility and individual solutions

Growing vending market
Selecta's vending machines are generally found in workplaces, as well as in the subway, at universities, colleges, hospitals and gyms - where they offer food, drinks and snacks.

“The market potential is huge, though and our newly developed business solution with DLL allows us to expand. The goal is to offer our service wherever there are people. One way is mobile units that enables presence at the beach, festivals and sporting events. The vision is to become the leading self-service operator in retail, where we move from being as machine supplier to become a service provider”, says Andreas.

Part of that vision are unmanned stores targeting larger work places and office hotels, a concept that not yet has been launched in Sweden. The stores will offer fresh foods, fruits and bread and be made accessible with a finger print scanned door opener.

“ The business of the future will require increased flexibility and more individual solutions. We see how our customers ask for new types of non-binding agreements, which is challenging if we have a business model based on the duration of payment plans. When our customers request new solutions from us we must put new demands on our financial partner and work out new solutions that work for all parties. DLL has shown that they have the flexibility that we request”, says Andreas.

Unique financing solution
The new vending machines in Stockholm's subway are a good example of a new, unique and specially adapted financing solution. DLL finances the equipment and Selecta stands for the service.

“It is a unique type of business for this industry and an arrangement we normally do not have with a finance company. DLL has given us the security we were looking for and also shown curiosity and interest in a completely new working model. DLL has seen the opportunities and has been willing to take a risk”, says Andreas.

DLL and Selecta have collaborated for many years on financing of coffee- and water machines as well as vending machines. The main end customers have been different work places. Subway vending machines is a different story. In this case it is the commuters and their willingness to purchase that affects the result. At the same time, there is data on everything that is bought, when it is bought and where - information that gives a good overview of sales and also indicate if a vending machine needs service or refill of certain goods. These new, connected machines meet all fire and safety requirements and offer the cash free payment options required for Selecta to win the tender.

“DLL made it possible for us to meet the new tougher demands while also allowing us to further develop other parts of our business – without controllers hitting the brake telling us not to make new investments”, Andreas says. “With all vending machines in the subway replaced it’s now time to deliver. For both parties to retrieve the investment we have to make sure the machines are filled with the right products and offer the right payment options.”

Sought a global partner
This new type of business collaboration between DLL and Selecta around the subway vending machines originates in the UK. Selecta sought a global financial partner that would enable rapid growth by deploying vending machines without too much impact on the balance sheet. It was in the UK that DLL and Selecta first used the solution "pay per use" – or rent per consumption.

“The mutual step DLL and Selecta has taken on global level has made it natural for us to develop the business locally”, says Caroline Blomé, Account Manager at DLL. “

To showcase the new vending machines Andreas Fetcher brings us to Östermalm metro station in the centre of Stockholm. Here the content in the machine is customized and based on what is in highest demand among commuters.

“At schools as well as work places there are many request for healthy and sugar free options. From a policy perspective it obviously looks good with the wholesome products we offer, but actually, what’s most often sold out is our Delicato chocolate balls”, he reveals with a smile and chooses a chewing gum from the vending machine. He pays by scanning the QR-code with his smart phone.

New smart solutions
In a recent survey Selecta’s customers were asked how connected machines can give them added value. Automatic error reporting topped the list, but Selecta also sees completely different possibilities of using the smart technology.

“It can be a good way to get closer to the consumer and create customer loyalty. Unmanned has always been so impersonal. That’s our challenge. With the help of QR codes, for example, we can offer special promotions and attract new customers”, says Andreas.

DLL and Selecta continue their cooperation in creating and driving innovative market solutions. One recent addition is the well-known Starbucks brand and "Starbucks on the go" - a concept that delivers a true Starbucks experience, specially designed for workplaces as well as for more public meeting places such as schools, universities or gas stations.