Generation Next chairman Nick Yates has stood at the helm of the company’s latest innovation, disrupting the retail business completely—unattended retail by way of a robotic vending machine that serves frozen yogurt in malls, airports, hotels and more. And while this is a new development, Yates has been in the vending business since his teen years. He is as passionate as he is determined when it comes to the tech and robotic developments of Generation NEXT and looks forward to the growth of the company as they have recently gone public. He believes that the company’s consumers should have the ability to invest in something they partake in.
Alongside their unattended retail advancements, Generation NEXT is also breaking back into the print world—a venture that might seem risky in a world that’s gone almost completely digital. Nevertheless, they persist, backed by proven research as they introduce Print Mates, a kiosk for printing photos straight from a person’s smartphone. These days while photo sharing goes no further than social media, it has in turn caused even Millenials to realize that printing photos to frame and share in their homes might be worthwhile after all, thus making Print Mates a necessity.
We recently sat down with Yates to hear his story and the latest on Generation NEXT.
Can you tell us about your career journey and what lead you to the tech and robotics world?
NICK YATES: I’ve been in the vending space my entire life. Both my grandfather and dad spent their careers sourcing “coin operated” products; then setting about improving, upgrading and reengineering them into concepts that were attractive to entrepreneurs. Typically, they also helped entrepreneurs place their products in high traffic locations that would result in profitable businesses and happy customers. I started in the 'family business,' as it were, at the age of 17 and believe I have always been one step ahead of others in this industry in terms of driving concepts that are new, exciting and always very disruptive.
Ice cream and frozen yogurt are consumables that the vending industry had never before found a way to vend fresh to consumers, and I had always wanted to find a way to make that possible. Robotics provided me with the solution. One can’t really drive robotics without clever software, either, so the two simply go hand-in hand. For me, it was a challenge, a challenge I wanted to conquer where no one else in the industry had been able. Here we are now with 250 robotic vending kiosks on the ground in three countries around the globe and another 1100 being built as we speak about to find their way to hungry consumers everywhere!
The vending industry itself has changed so much in the last 10 years, it’s really hard to keep up. Facial recognition software, telemetry, new methods for payment, the ability to sell almost anything; all of this has allowed me to choose my products carefully. Our business is based on pretty simple fundamentals: we build automated machines and technology that can sell products that are in demand; do so quickly; and better than humans can. We make sure those products offer a lot of margin for our customers (our customers being the franchisees who purchase, own, and with our support, operate our machines) and we focus on building a large 'footprint,' meaning we must have lots of different locations available to us and our customers. Generation NEXT started as a company selling natural, organic, healthy snacks. We reinvented an industry plagued with junk food before anyone else. We changed the way kids snacked in schools and eventually, workers in offices via corporate wellness policies. That evolved into building frozen yogurt vending robots and even more recently photo printing kiosks that provide consumers with professional quality photo prints and photo products from their social media accounts, smartphones, and digital cameras. Our company went public in 2010, you can find us under the stock ticker symbol VEND. We have over 4,500 shareholders and have sold over 650 franchises generating combined contract sales of over $200 million. We plan to continue building products that are disruptive, that our patents and cater to, and that allow us to stick to our core values and mission.
How would you say unattended retail helps improve the consumer experience?
NY: In nearly every way! The customer can find us in so many different locations. Our unattended retail concepts take up just a fraction of the space that the same human-staffed business would. We can operate 24/7/365. You order only when you're ready, no impatient staff to deal with. It is easy to use, all at the push of a button. Generally, there are no lines to deal with. The experience is friendly, interactive and fun every time. The technology doesn’t make mistakes either. You get what you want without any fuss. The products we offer sit in environments that already have high volume foot traffic (colleges, hospitals, hotels, tourist attractions, airports, malls, family fun centers, amusement centers, corporate campuses, high schools, sports stadiums and so on..) so we really don't need to spend money marketing to consumers. We avoid the increasing cost of labor. There are no expensive employee benefits, no sick days, and no theft. We don’t need to spend any money on shop fit-outs, nor do we pay high rents. In most cases we offer a percentage of our revenues as a substitute for rent. Our franchisees can monitor their businesses from their cell phones which tell them when to visit, what to bring with them, how much money they will be collecting and a plethora of data to help us drive the product.
In a world where printed photos are nearly obsolete thanks to the Internet and social media, how do you see Print Mates bridging the gap between digital and print?
NY: Contrary to popular belief, today's younger generations are eager to preserve their photos in print—as are everyone else. And there is evidence to back this up, including a research report last year by Futuresource Consulting. According to the report, Millennials are the most likely age group to be printing photos, with an impressive 77 percent of U.S. Millennials having printed photos they’ve taken in the last 12 months. But, (and this is where it gets interesting) well over half have only ever done so at home, as opposed to paying for professional quality prints or photo products. Why? Well, until now, premium-quality digital photo printing has been either too inconvenient, too slow, or too expensive for today's consumer, and that's why less than one-third of millennials have ever used a third-party printing service (and likely weren't impressed). In other words, the print photo is only 'nearly obsolete' because no one has stepped up and provided a product and service to fill the demand in a convenient, cost effective manner. People still want prints according to independent consumer research. They're just not interested in what is being offered right now, typically involving a trip to a Walgreens or CVS to find slow, expensive, low quality, years-old and often broken-down equipment(see photo below).
Our technology is fun. We offer many different options for the customer and products can be ordered from our kiosks and sent to the customer's home just like shutterfly.com. We are very close to upgrading the software so passport pics can be printed also. Nobody has all these features in one solution. We can continue upgrading these kiosks to sell whatever we want, that’s the beauty of it. And retailers can hardly contain their excitement for this product. Grocery, Convenience, Hotels, you name it all want their customers to have the ability to print photos again. The industry is being revived as the consumer is realizing that photos are special, they are keepsakes not to be kept only on a hard drive, cell phone or a social media account that invariably is lost or deleted one day. Photos are to be put in albums, in frames, in your office, on your mantle so you can remember how beautiful those moments were!
What do you think it means for a leading, innovative tech company like Generation NEXT to be publicly traded?
NY: Both the benefits and challenges of being a publicly traded company are many, but for growth-oriented companies like ours, it is the perfect fit. When you are an early-stage growth company, you need capital, and the public markets can provide that without selling yourself and your company short through other types of financing. We are a different type of tech company than most as we specialize in unattended retail—which we feel could disrupt traditional retail in much the same way that e-commerce has done. We love the 'democritization' that being a public company offers—in that investors of all types, big or small, regardless of background or where they call home, can invest in our company and our technology with just a few clicks on Charles Schwab, E*Trade, Ameritrade, Fidelity and other major online brokers. Personally, I really appreciate that technology and the public market allows anyone to invest in early stage companies in their growth stage, something that just a few decades ago was the domain of only a select few. As far as our company is concerned, investors are attracted by our significant growth potential. We have written contracts for over $160 million just in the last two years. We have sold over 300 new franchises domestically in the last two years. We have licenses in Australia, Canada and Israel and we are only just warming up, with plans to replicate again and again with new products that fit our model, and the fundamentals we believe can make us more successful. We are working on our next unattended retail products/kiosks now and have two amazing new concepts up our sleeve that will fit nicely next to our current product line and into our footprint of locations. We continue adding great new talent to our team, we learn from our mistakes and we continue to grow. We are always looking for ways to talk to our investors, we are very vocal, and we share news as it becomes available. Our culture is amazing, and we love what we do!