NMI’s Payment Playbook Podcast – Episode 14: Elyssa Steiner, Cantaloupe CMO

The retail industry is undergoing a significant transformation. As we step into a post-pandemic era, the advent of self-service retail and anytime anywhere payments is revolutionizing how consumers shop and pay for their purchases. In the latest episode of our podcast, we had the pleasure of hosting Elyssa Steiner, the CMO of Cantaloupe, to discuss these dynamic shifts in retail.

We also discussed the expansion of self-service retail solutions across various verticals. Airports, gas stations, gym memberships, and residential buildings are just a few areas where these solutions are becoming increasingly common. The rise of cashless food and beverage vending machines across these sectors is reshaping how businesses deliver services and products.

The future of retail is set to be even more digitized and personalized. Elyssa predicts that AI technology, smart coolers, and other advancements will continue to drive the growth of self-service retail.

Greg Myers: Hi, Elyssa, and welcome to this episode of the Leaders in Payments Podcast, where we’re going to be talking about anytime, anywhere payments. Of course, self-service retail is a big part of that. Thank you so much for being here and welcome to the show.

Elyssa Steiner: Thanks for having me.

Greg Myers: Absolutely, let’s start by having you tell our audience a little bit about yourself, maybe a little personal and professional background info.

Elyssa Steiner: I’m Elyssa Steiner. I serve as our Chief Marketing Officer here at Cantaloupe. I’ve been in the self-service retail space for about 13 years now. Prior to joining Cantaloupe, I worked for a startup that was really focused on introducing a concept called MicroMarkets to the food and beverage vending space. I know we’ll probably chat about that a little bit later, but there I managed both their sales and marketing division while really helping grow the company rapidly in the first six years. I’ve been in software services and really this micro payment space for a long time and I really enjoy what I do. On a personal note, I live in the Seattle Washington area with my husband and two kids. I have a five-year-old little girl and a two-year-old boy. I’m also an avid CrossFit and yoga lover, really anything outdoors with the kiddos. We love to go hiking, snow tubing in the winter, any of those kinds of things. It tends to be where you find my family.

Greg Myers: Well, with two kids under five and you still have time for yoga and podcasting, that’s awesome.

Elyssa Steiner: I always tell my team members you’ve got to prioritize time for yourself too. I try to definitely live the words I echo to them.

Greg Myers: Tell us about Cantaloupe. What does Cantaloupe do?

Elyssa Steiner: Our vision is to be the global technology leader of powering self-service commerce. Self-service commerce maybe the term seems newer to people. It’s really not necessarily a new concept. It’s just been growing historically rather slow, really up until the pandemic. The pandemic started to accelerate it and trends continue to expand.

Coming out of that, our technology and what we do at Cantaloupe is really powering all aspects of self-service experiences that consumers may encounter every day and may not even realize it.

I always like to explain at a high level what we do, but in simple terms, we really power the technology that helps consumers buy it and go. When I say it, it could be anything from you go into a drive through car wash and you use your credit card before pulling into the car wash, you might see our device. If you walk up to an arcade machine, you could find our card reader on that machine to enable you to play. Or, most commonly, you could go up to a snack or beverage vending machine and you would find our card reader on that machine as well. From the consumer perspective, we’re really powering the forms of being able to pay with digital payments, but then, from the business owner perspective, the guy or gal managing those locations out in the field. We’re helping give them software services to be really efficient in managing those locations, really driving ways to increase revenue and then decrease their operational costs.

Greg Myers: We had your CEO on the show a few months ago. So, I’ve learned a lot, obviously, about Cantaloupe and over the years have been very familiar with the company. When you say software, you’re also inventory management and all the things that a business that owns, and I’ll just simplify it down to a vending machine. But I know that’s much broader than that, but let’s just use that as an example. So, it’s not just payments, right, it’s the software that helps them do inventory management, run their business all of that right.

Elyssa Steiner: Payments is really just the enabler. Built into it is telemetry and that’s really what’s sending data back into the cloud, into a Seed, our backend platform. And really a business owner, small or large, you could have five machines, you could have 1,000 locations out there and we’re giving them really a variety of tools inventory, tracking, sales reporting, routing and scheduling. So really the bread and butter is we tell them exactly where they need to go, when they need to service a location and how frequently they need to do that. So, it’s leveraging all this kind of predictive analytics to make sure that they’re giving their consumers really the best experience every time they walk up to one of their machines, so that you or I don’t ever have that instance where we go up to it and 50% of the machine is empty and the product you might have wanted isn’t even in there. So, you walk away right. So, our software is really helping them kind of optimize that experience.

Greg Myers: Well, what, would you say, makes Cantaloupe unique in the marketplace?

Elyssa Steiner: I think the first one’s easy to me, but maybe it’s just because of our scale and our footprint. I think we have a really strong track record of facilitating what we call micro payments at scale. And micro payments just for those that might be a little unfamiliar is really anything that’s typically under $10 on an average transaction, and so a lot of what we do today are those forms of payments, and we have about 1.15 million locations across the globe that run on our network. You think about reliability, stability, all that kind of stuff that is really core to making sure that in the day, they’re able to capture as many sales as they can at their locations. I think that we’ve done and proven really effectively that we can do that for our customers. But secondly, I think we hold a lot of value by providing customers a full end-to-end platform.

Especially as customers grow, it becomes extremely critical whether you’re getting 100 locations and you’re managing things fragmentedly. It can become very challenging. And or if you’re doing it with pen and paper and you need software, well, we have that for you and you need a management platform. We have that. We also like to be kind of this one-stop shop. So, everything from if you’re looking at new opportunities to grow and you want to get into micro markets or offer smart coolers, all of those things fit into our portfolio. So, I think giving customers that end-to-end platform and what I’ve recognized it starts to make our product super sticky. It has definitely been kind of a unique value that we can give to them in the market.

And then, lastly, I always think our ability to innovate, and I think there’s kind of a couple different ways you can define that, but whether that’s making strategic acquisitions which we did one back in December of 2022, or it’s developing new products directly, remote price change is what I think about, where we helped customers, especially through the pandemic where costs were rising on a quarterly basis for products and they were trying to protect their margins.

But that becomes very difficult when you have to send a person to every single location to update price. And when we rolled out remote price change, it really helped customers quickly realize that, hey, I don’t need to send a technician out to do this anymore. I can leverage the tools inside of Seed to change prices on my vending machines out in the field and do that instantly. So now they were able to be more reactive to the product cost changes a lot faster than they ever could before. I like to think there’s things we’re doing around AI technology, a lot of things around innovation and, like I said, it could be done a couple different ways. But I think that we continue to try to make sure that we’re not only staying ahead of the curve, but we’re delivering that for our customers so they can give the best experience every time.

Greg Myers: Well, let’s dive into the topic at hand, which, of course, is self-service retail. So, can you give us quick history, maybe from the days of the vending machines taking cash to where we are today?

Elyssa Steiner: I was thinking about this and, fun fact, did not know this. But vending machines started back in the late 1800s, which I thought it was clearly going to be the 1900s, and they started with gum dispensing machines, believe it or not, on railways. And then today, if you go to the Coca-Cola Museum in Atlanta, you’ll see those old school soda machines that they also had. It continued to evolve. You even see today coin-operated dispenser candy machines still in old diners. You’ll still see those. But it wasn’t really until the 1960s where bill acceptors were introduced to the vending space. And now you fast forward. Cantaloupe was founded in 1992 and really started to disrupt payments in bringing in card readers, especially into the U.S. market, as a way to accept digital payments. But it was slow because consumers paying with credit or debit cards in the 1990s wasn’t as prevalent as it is today. And today, even depending on what country you’re in vending machines, you think about soda and snack machines, but they’re really taking many different shapes. So, we say vending and we tend to default to food and beverage. But you look at locker boxes now where you might see beautiful premium products in them. There’s even these locked cages for propane tanks now where you could pay and swap and put your empty one in and get a new one. Or you think about Carvana, those giant car vending machines. It’s all around us. I don’t think sometimes we realize how much it’s growing all around us, but it’s really driven by a lot of the consumer needs and wanting things fast and convenient. And how do we do that right?

I always like to point this out because I think the pandemic while we spent years talking about it, it definitely accelerated a lot of self-service. I think it just accelerated what customers or consumers wanted, whether that’s I want to pay with cashless payments because I don’t want to touch cash, or I want to get something that I need when I’m only going to the grocery store. So, if I need to also get it out of a smart retail type machine because I don’t want to stop at the Macy’s or Nordstrom to go get makeup, maybe this machine also offers specific makeup products that I’m looking for. So, I think there’s this hybrid and merge that’s occurring between traditional brick-and-mortar retail and then what you’re seeing with what self-service can deliver, of giving it to the consumer where they’re at, when they want it.

But there’s one thing that’s super interesting, I think, as you just look at the trends over history and payments. Specifically, we published a report called our Micro Payments Trends Report 2023, which is available on our website at www.cantaloupe.com in our resource center. But we saw that 67% of all sales at food and beverage vending machines were cashless in 2022. And this increased 11% from 2021 alone. So just that simple fact. The acceleration is happening so much faster. And I think that’s the same for self-service. And how can we deliver with new technologies, different ways to give consumers products that they would have never traditionally bought maybe in a box, to say but now they are. So, it’s just really interesting to look at kind of the evolution of gum dispensing machine only accepting coins to now self-checkout kiosk everywhere you go.

Greg Myers: It has evolved a lot and very quickly, so can you talk about maybe some of the verticals where self-service retail solutions are becoming even more commonplace?

Elyssa Steiner: I think probably the one that’s most relevant to people today is airports. I think that’s a great example. Where you can walk through an airport. You’ll see actually a handful of smart retail machines like Kylie Cosmetic machines, pharma box machines All of these are selling various retail type of products that consumers can buy, and then you’re seeing self-checkout kiosks in all the newsstands. It’s becoming so common now and they’re cashless only, and if you want to use cash you got to wait in line at the attendant, and there’s typically maybe only now two attendants one stocking product and one’s actually at the counter just making sure people don’t have questions what they’re doing.

I think another one that is maybe less obvious that we’d notice is air-vac Machines. I feel like this one, and that’s putting air in your tires at a gas station. I feel like it was literally two years ago. If you were to stop at a gas station to put air in your tires, you would have had to have figured out how am I going to find coins in my wallet or in my car, and this one to me has sort of been this flew under the radar, and now every time you see one, there’s typically a card reader on it. So that one I think just accelerated, given the acceptance of needing to take digital payments for consumers and the way that people are preferring to pay, and then I think, a newer one that’s really interesting is like fitness gyms and residential buildings.

These types of applications are places that are either looking to give their tenants additional amenities or their members product, because maybe they had a smoothie bar at their gym and the overhead for that, and then the challenges with labor. It just was getting too costly and they closed them down. But they didn’t have like a what’s my plan B and can I offer a service or can I sell protein bars, or was really no clear solution. And now you’re seeing micro markets, which are like many convenience stores, getting dropped right into those locations and it being a great solution for both the gym owner or the manager of the residential building and then also a perk to those members or those tenants. So, I think those are kind of some of the first ones that come to mind is new applications that are definitely starting to gain traction.

Greg Myers: Well, I know there’s still room for growth and for things to convert from cash, because I was recently in California to visit my daughter, who goes to college there, and we were going to get her car washed. And so, we go to the self-service car wash and, of course, the lowest denomination of money we had was like a $10 bill. So, guess what? We got $10 worth of quarters, and who wants $10 worth of quarters, right? So, we definitely would have used a debit or credit card had they had that. So, I know there’s room for growth still.

Elyssa Steiner: I think that’s a perfect example where the bowling alley that’s near me, I get mind blown because I think just because I’m so aware of being in this space but they have maybe like 10 arcade machines, right kind of in that area for kids and it’s always busy, but there’s not a single card reader on any of the machines and I just think to myself, man, if you could swipe your card just to keep the kid from being able to continue to play, how much more could they be making on these machines? So, I definitely agree, and that’s what I mean, like there’s so many applications that are around us that if they were just enabled could probably do so much more, but we don’t even realize how many we end up interacting with every day. That really is like a self-service experience.

Greg Myers: Well, you mentioned earlier about the Micro Payment Trends Report, so can you give us some of the top takeaways from that?

Elyssa Steiner: The key one that is like a no-brainer, especially with the data point I provided earlier around 67% of total sales coming from cashless. One thing to note, too, is I think it’s around upwards of in the 30% that is driven from just contactless alone. So the key takeaway that’s the no-brainer out of the whole Micro Payment Trends Report is that if you aren’t accepting cashless payments on your self-service retail locations which we just talked about, a couple that we’ve both experienced that didn’t have them you’ve got to be because that’s really the way you and I want to buy stuff and you think about the younger generations. That’s the only way they really can know how to buy stuff. They’re doing it all on their phone. They don’t even have a card on them. In some cases they just have their mobile wallet. I think cashless payments it’s clearly not going away. If anything, it continues to grow and you’re seeing locations that now are just cashless only. That, to me, is a clear takeaway, based off of the data points you’ll see in the Micro Payments Trends Report, that you should have a card reader at your self-service machines.

The second one that was really surprising to me was we also took the opportunity to kind of break out away from just providing data on food and beverage machines to doing an amusement analysis on amusement and gaming machines. These could be like claw machines, where you try to get a stuffed animal, whatever it might be, and one of the things that was really interesting in the study is the average transaction. Typically, where it was cash only, it was around 93 cents. If you had a card reader, the average transaction was $5.32, which is almost 5X. And I think a lot of it, too, is that you can with our technology at the card readers is you can enable top-offs so you can allow people, if they’re playing and they want to add another three credits to play again, they can easily just select to play again and it’ll add it to their total before processing that total transaction. So, it makes it easy to spend more, which as a business owner, that’s a great perk to have, and then as a consumer, it makes it just you’ve got to continue the playing and the fun that maybe it gives you while you’re doing that.

I think that that was one of the big like aha. Amusement is such again like another space that I think has been slower to adopt cashless, and in my mind the data spoke for itself. It felt like a no-brainer to me. There was a couple of other points that we looked at on the amusement side, but that was definitely one of the other key takeaways is just the growth in the average transaction. Anything about the total sales that that presents you as a business owner and the opportunity you’re missing out on if you’re not having cashless. Again, I think there’s tremendous opportunities still from a payments perspective to add cashless acceptance and really proves itself through the data we share in the Micropayments Trends Report. So, I recommend anybody wants to check it out. There’s a lot of great data in there and it is available in our resource center.

Greg Myers: Well, we’ve been talking a lot about sort of where we’ve been and where we are today. Let’s talk about what’s next. Where do you see this space going in the next, say, five to seven years?

Elyssa Steiner: Gosh, I feel like five years from now, who knows, because technology is moving so fast, but definitely in the near term smart coolers and AI technology they’re really taking off and I think it’s also at a place where people are figuring out how and where can I use this still right, and I think in self-service you think about, like the giant locker machines and could I buy handbags, premium purses out of it?

It kind of ties back to how do you continue to blur the lines between traditional retail and the expectation that I need to get this consumer to come into my store, versus saying the consumer is not coming as much. How do I take my product and go where the consumers I want to go after are right, so whether that’s putting those in airports or wherever it might be. But I think that a lot of the technology around AI you’re seeing how do I leverage that to buy potentially alcoholic beverages it all ties back to fast, convenient and easy for the consumer and how can you kind of accelerate those three things with technology. So, I think, who knows, in five years the whole world could be practically self-service and it solves the labor challenges. It solves a lot of the things we’re dealing with today, but I definitely see in the foreseeable future. There’s a lot of cool things happening around, just like smart coolers and the AI piece that is getting really interesting for this space.

Greg Myers: Well, you know what’s ironic to me at least, and this is the way my mind thinks around the smart coolers is, before our time, people had coolers on their front porch and that milkman came and delivered milk. So, are we circling all the way back to that again?

Elyssa Steiner: I mean, who knows right? There’s a new case to repurpose. It’s funny. You see that we recently just did an event in Milton Keynes, England, and it was our Cantaloupe Live event for our Europe customer base, primarily in the UK, and we showcased and demoed a standard single door cooler that was completely retrofitted. The whole door was a digital screen so it didn’t even look like a cooler. You couldn’t tell it was actually a cooler anymore because the whole front was a beautiful digital screen and then you got to interact with it. It had gamification, it was just modernized UI. It was almost like you think about the coolness of your smartphone and how you interact with apps. It was basically like a giant version of that. It’s funny.

Application also can go on vending machines. You take an old vending machine. You say how can I repurpose this could replace the whole front of the door with an entire digital screen. It doesn’t even look like a vending machine anymore, which is a really interesting way to think about. How do you repurpose existing equipment and completely take it into the now or even the future of what we want from a digital experience perspective?

Greg Myers: Let’s circle back to Cantaloupe. We’ve talked about these trends, so what is Cantaloupe doing to take advantage of these trends?

Elyssa Steiner: We definitely are diving into all the things around smart coolers. We have a number of smart cooler applications. We have that variant ranges of technology they give you and therefore cost associated to them. But I think we’re positioned very well to be a leader in sort of the space of smart coolers and where that continues to evolve. We also demoed just what was it a week ago at the NAC show in Atlanta the smart cafe, which is essentially our cooler that has AI camera, computer vision technology that depicts exactly what you picked out of the cooler, so you don’t even need to select it on a screen, you just tap your card to pay. It unlocks the cooler immediately and then it watches the product you take in or out. The second you close that door it charges your card with exactly what you took out because of all the camera technology watching essentially what you’re doing.

And we’ll have some new stuff we’ll be excited to kind of share expanding into the smart cooler space at NRF in January. So, I think there’s a lot of stuff around the smart cooler trends that we’re excited about. I think there’s a ton of opportunity to again bring something new that digitizes like experiences for consumers, which is really what the buying experience is looking for, but also it solves a lot of problems that our customers or think about retailers have. So, I think that you’ll continue to see more from us around this stuff, but that’s definitely some of the things that we recently have showcased at some of our events.

Greg Myers: Well, listen, we’ve covered a lot of ground so far. Obviously a little about you, a lot about Cantaloupe and a lot about sort of the industry, the self-service industry. So, is there anything else you’d like to add before we wrap up the show?

Elyssa Steiner: I feel like we covered so much. I think really, the self-service retail is at the core of it, and why I think it’s growing so much is because it’s really solving critical business challenges that, whether you’re a vending machine operator or you’re a big box retailer, labor is a reality. It’s a challenge today, and theft is becoming a challenge. And how do I solve for these things that can’t seem to grasp my hand on right. And so, you think about today you go into, let’s say, like a Walgreens or a Rite Aid, those types of smaller stores and you try to get a razor blade pack. Well, it’s locked behind a case. So, you got to go find a person to unlock it. Then you got to follow that person because now you want to pay, right, the whole experience is clunky. But they have to lock them up because they’re high-ticket items and they’re high theft items.

A lot of this smart and again I reference it’s smart, cooler technology. But it doesn’t have to be in a cooler, it doesn’t have to be product, food product, it could be razor blades. So now I’ve just solved the problem of the consumer experience. What if I walked in and just walked right up to the machine, selected the razor blade I wanted and then tapped my card, it unlocks. I grab it, I go. That is completely different. That changes the experience right. So, I think that there’s a lot that can be done to continue to kind of merge self-service into solving core retailer challenges, but then also like bridging the gap of getting retailers in front of consumers in new places that the physical store may not exist. Really, we’re excited that we can really help enable all of that. I think there’s just tremendous opportunity and I think that self-service retail is going to continue to be a core driver in the way we deliver experiences to consumers.

Greg Myers: Thanks for sharing that. It’s great insight and a great way to wrap up the show, and I just wanted to thank you so much for being here. I know your time is very valuable, so again, thank you so much for being on the show today.

Elyssa Steiner: And thanks for having me, Greg. It was lovely to catch up and excited to kind of talk about this topic with you.

Greg Myers: Thank you so much, and to all you listeners out there, I thank you for your time as well, and until the next story.

02:18 - About Elyssa Steiner

03:39 - About Cantaloupe

06:42 - What Makes Cantaloupe Unique

09:41 - History of the Self-Service Retail Market

13:28 - Self-service Retail Verticals

17:05 - Micropayments Trend Report

20:15 - What's Next

25:07 - Wrap Up