Maximizing Vending Machine Sales by Time

Overview:

The goal of this analysis is to understand customer behavior and sales trends based on different time blocks throughout the day—morning, afternoon, and evening. The aim is to provide actionable insights that help optimize product offerings, promotions, and restocking schedules for a coffee vending machine business.

Key Results:

• Revenue by Time of Day:
  • The afternoon generates the highest revenue at $50,108.80, followed by the morning at $39,106.20, and the evening at $33,106.58.
  • Afternoon is the prime time for volume-based promotions, while the morning is more suited for premium promotions due to higher average order value (AOV).
  
• Most Popular Drinks by Time of Day:
  • Morning: Americano (350), Americano variant (232), and Café Latte (145).
  
  • Afternoon: Latte (335), Americano (313), and Café Latte (213).
  
  • Evening: Latte (233), Americano (205), and Café Latte (172).
  • The most popular drinks during all time slots are Americano, Café Latte, and Latte, with slight variations in rankings.
  
• Low-Performing Drinks:
  • Drinks such as Irish whiskey, chocolate, mocha chip, caramel with chocolate, and double latte have very low frequencies, especially in the evening.
  • These drinks may be candidates for promotion, reformulation, or removal if they continue to show poor performance.

Goals Alignment:

The primary business goals are to increase sales, optimize vending operations, and improve restocking efficiency based on actual consumption patterns. The results directly align with these goals by:

• Optimizing Sales: Identifying peak sales periods helps in timing promotions and restocking effectively.
• Improving Operational Efficiency: By knowing the most and least popular drinks during different times, operations can focus on stocking the right products, minimizing waste, and ensuring high-demand items are always available.
• Maximizing Promotions: Understanding which time windows generate the most revenue or volume allows for targeted marketing campaigns, ensuring that the right products are promoted at the right times.

Impact:

• Revenue Growth: The afternoon is the highest-revenue period, suggesting that targeted volume promotions, such as discounts or combo offers, can be more effective during this time.
• Efficiency in Restocking: By focusing on popular drinks like Americano and Latte during their peak times, restocking schedules can be aligned with customer preferences, reducing the chances of stockouts or overstocking low-performing items.
• Marketing Effectiveness: Tailoring promotions to the specific time of day can drive higher engagement and conversions, leading to more successful campaigns and better customer satisfaction.

Data Interpretation:

• Time-of-Day Variations: The variation in revenue and product popularity across different times of day indicates different customer preferences and purchasing behaviors. The afternoon, with its high revenue, may benefit from volume-based promotions, while the morning, where AOV is higher, may respond better to premium offers.
• Product Preferences: The consistent popularity of Americano, Latte, and Café Latte across all time periods highlights these drinks as customer favorites. These drinks should be emphasized in promotions and restocking schedules to cater to ongoing demand.
• Low-Performing Drinks: The low frequency of sales for drinks like Irish whiskey and double latte suggests that these items either have niche appeal or suffer from low customer awareness. Offering limited-time discounts or marketing these drinks during slower hours might increase their visibility and sales.

Contextual Factors:

• Customer Behavior: The observed popularity of Americano and Latte across time periods is likely due to their general popularity as staple coffee drinks. The drop-off in sales for certain items during the evening may reflect a shift in customer preferences for lighter or more indulgent drinks, such as those typically consumed in the evening.
• Promotional Impact: The variations in drink popularity suggest that customer preferences might be influenced by the time of day (e.g., a preference for strong coffee in the morning and lighter options like Latte in the afternoon). This could be factored into targeted promotional strategies.

Recommendation:

The analysis reveals clear opportunities to optimize sales, marketing, and restocking strategies. By leveraging time-of-day preferences and focusing on both high-demand and underperforming products, the business can drive sales while improving operational efficiency.

• Targeted Promotions:
  • Morning: Promote premium drinks like Americano and Café Latte with offers such as “Morning Espresso Kick.” This could leverage the high AOV in the morning.
  • Afternoon: Focus on volume-based promotions, such as “Latte Lounge Hour,” to take advantage of the peak revenue period.
  • Evening: Encourage sales of evening-appropriate drinks through offers like “Smooth Latte Wind-Down” for lighter beverages.
• Restocking Strategy: Focus on high-demand drinks like Americano and Latte, especially during their peak hours (morning and afternoon). Ensure that stock levels are aligned with demand patterns to avoid waste or stockouts, particularly during high-volume periods.
• Address Low-Performing Products: Consider running limited-time offers for low-performing drinks such as Irish whiskey, mocha chip, and double latte. Alternatively, explore reformulating these drinks or removing them from the menu if they continue to underperform.
• Experiment with Low-Sales Hours: Use the evening period to experiment with introducing new drinks or offering exclusive promotions to boost sales during slower times. Targeting these hours with strategic promotions could increase visibility for low-performing drinks and generate additional revenue.

Conclusion:

The findings from this analysis offer actionable insights for optimizing sales, restocking schedules, and promotional strategies based on time-of-day purchase behavior. By aligning marketing efforts with customer preferences and focusing on both high-performing and underperforming products, the business can drive revenue growth while maintaining operational efficiency. Moving forward, these insights will enable more data-driven decisions that align with customer behavior and maximize overall sales potential.