Is Intelligent Vending Right For You?
In my first two articles on intelligent vending (read #1 – What is Intelligent Vending here, #2 – Technology and Analytics here) I talked about the history of vending machines and the new frontiers ahead for the automated retailing industry, including new technologies and analytics capabilities. In this article I will speak on how intelligent vending is impacting the overall consumer retail industry and encourage you to explore if intelligent vending is right for you. Whether you are a retailer (online or brick and mortar), a current vending operator or a vending manufacturer, vending sales are predicted to grow from $7.3 billion (2016) to $18 billion by 2020, it is the perfect time to consider an intelligent vending solution.
Before you rush to the conclusion that your product or service could never work in a vending machine, consider that cars are being vended – today in several cities across America! Live crabs, fresh organically grown lettuce, caviar, and even gold bars can be found in machines across the world. Size, shape or shelf life have no meaning when it comes to vending. If you can merchandise it in a brick and mortar location or sell it online, you can vend it. And, more securely and with less overhead. You can put your product in front of your customers so they can access it when they need it the most. Vending machines can be placed almost anywhere, you just have to open your mind and explore the possibilities.
So how does this affect consumer technology and related retail products and services? Generally speaking, what today’s progressive retailers are investigating is what inventory items are the most popular and how can they automate the process of getting them in the hands of customers the fastest. When it comes to your business, what products do you sell that your regular customers don’t need help purchasing? Do you have products that customers would prefer not to have to interface with a sales person because they want to expedite the check-out process or don’t want to be upsold? If a customer has questions at the point of sale instead of asking a cashier, the vending machine can automate any message – text to video – to assist customers in making a buying decision. Here are a few examples that are currently in the market today:
Amazon Prime delivery that offer customers the convenience to purchase items online and the order is at the door within 1-2 hours or pick up their order from a secure package vending machine.
The music store in Portland that vends guitar strings, drum sticks and other small, recurring revenue items that don’t require direct customer assistance.
The bicycle store in Brooklyn that vends common service parts, from a flat tire to new brake pads to a new seat; even energy drinks and bars for riders popping in who need a quick snack.
The Sprinkles cupcake ATM in Los Angeles that vends delicious cupcakes 24 hours a day.
I hope now you are starting to envision the benefits of intelligent vending and the endless possibilities for retail. Vending machines to replace traditional retail environments is not a new idea. In 2015, Best Buy experimented with ‘Chloe’, a 350 square foot robotic assembly in their Chelsea, NYC store. Chloe is, admittedly, fun to watch. The yellow robotic arm can quickly search through the stores selection of CDs and BluRays, or headphones or chargers. And allow customers to shop without ever interacting with a human. Fast forward to 2017 and a new vending machine called ‘Vicki’ is using artificial intelligence and iris scanning to let customers shop without cash or credit using smart shelf technology like Amazon Go.
Intelligent vending is arriving at a pivotal time for retailers. Brick-and-mortar sales are struggling as online businesses thrive. Macy’s, Sears, Target, Walmart and other chains are closing stores and reconsidering their strategies. That is creating opportunity for technology that can reduce labor and real estate costs and increase revenue.
E-commerce is continuing to grow rapidly with the need for immediate, direct to customer distribution. Online is not always the best option for brands who want to get their products into the hands of customers as quickly as possible. Additionally, intelligent vending machines can enhance the online shopping experience by allowing customers to shop on the web and pick up from a vending machine. This concept is currently being tested by Walmart, who launched giant self-service kiosks in the parking lot of a supercenter in Warr Acres, Oklahoma, where customers can pick up online grocery orders without interacting with employees.
Despite the new innovations in vending, operators and brands still know very little about the customers who are shopping at the machines. There is some data that can be collected from credit cards, but the new machines still do not have advanced analytics ability.
Solutions Vending has developed a software solution to solve this problem. Using our software, vending operators can learn more about their customers including demographic profile, lead generation, social media sharing, emotion detection at the point of sale, customer engagement and sales conversions, as well as allow them to remotely manage inventory, point of sale data and advertising. We make vending machines smarter than ever. Our technology can be applied to new vending machines or retrofit existing machines. Now brands that are selling online can finally have a direct-to-customer presence with all of the data of Google Analytics and more.
Is intelligent vending right for your company or brand? We should talk. We spoke to the CEO or Brand Manager of 50 consumer product companies regarding their interest in intelligent vending and discovered the following:
72% meet specs for vending success
68% never considered vending
71% never heard of intelligent vending
87% interested in learning more
The key takeaway from this research is that brands don’t know much about intelligent vending and how it can increase their bottom line – but they want to learn. The intelligent vending market is set to create new and existing customer transactions and explode with IoT potential. The business case is further attractive as entirely new consumer product companies are going to enter this space to personalize consumer relationships and create micro-markets. The ability to introduce new revenue streams through point of sale advertising is strong as marketers see the consumer-facing dashboard as a new ‘screen’ for marketing and consumer engagement. The total-addressable market is dramatically expanding in this space and SVI is at the forefront of it. Please contact me for more information if you think you might be interested in learning more about our customized vending machines and innovative software solution.