TECHNOLOGY

Commentary: Four Questions to Ask Before Venturing Into Vending

BY Tony Scherba

Forget everything you thought you knew about basement-banished vending machines selling Funyuns, Pop-Tarts, and maybe Snickers bars. Today, touch-screen interfaces, 3D-printing capabilities, and a host of other technological advancements make the vending industry ripe for disruption by creative companies.

The vending machine market is expected to hit nearly $12 billion by 2025, according to Grand View Research. Is there a limit to what retailers and brands can vend as a society? Maybe not — if we’re willing to ask ourselves four questions and then develop prototypes so people can tap, dip, or swipe their way to more than a Diet Coke.

Question 1: What could we vend?
The world is full of vend-worthy commodities. Clothing, makeup, earbuds, water bottles, backpacks, and plenty of similar articles could be bought from a machine. And with additive manufacturing, it’s possible to produce large and small 3D-printed necessities on demand, such as RESA Wearables’ on-site-made customized insoles.

Case in point: Benefit Cosmetics’ bright pink airport vending apparatuses are catching flyers’ attention — and dollars. So are Pharmashop-24’s machines in Milan that provide after-hours customers with diapers, over-the-counter medications, and more. Staying at a Standard Hotel but forgot your bikini? A Quiksilver vending machine outfitted with swimwear can be your salvation.

Don’t let your brainstorm be limited by the size of your product, though. Items as large as cars aren’t off-limits. Carvana, an online car dealership, is testing a “vending machine” that mixes kiosk technology with admittance to a five-story vending building. After purchasing a vehicle, buyers deposit a Carvana coin into the kiosk and wait for their new ride to arrive.

Question 2: How can we automate typical customer experiences to make them extraordinary?
Consider all the touch-points customers normally endure to buy your product. Which ones, from search to sale, can be automated without compromising your brand integrity or standard of service?

For example, we’ve been prototyping touch-screen vending technology for a major tech firm. Currently, it sells the would-be vended products only online, which excludes consumers who aren’t online and requires buyers to wait for their purchase to be delivered. While physical stores could’ve solved the problem, we realized that vending technology could provide the customer with a quicker and less expensive all-in-one experience around product research, purchase, and distribution.

In the fast-food space, McDonald’s is testing new ordering kiosks in select stores around the country. By offering digital menu boards, it’s helping customers personalize their orders and get their fries faster. While not true vending machines, these kiosks use the same approach to simplify ordering.

Question 3: How can we make a vending machine fit our retail brand?
Step out of the timeworn vending machine box. Instead, explore ideas that dovetail with your brand, use the same concept as classic vending models, and offer a modern appeal. Take a page from Spectacles, Snapchat’s high-tech sunglasses available from a one-eyed vending gadget that looks rather “2001: A Space Odyssey” — minus HAL 9000’s singing, of course.

Need another vending idea that engages consumers in a novel way? Meet Douwe Egberts’ South African coffee kiosk located at the O.R. Tambo International Airport. Embedded facial recognition software notices when customers yawn, and the kiosk rewards them with a free cup of joe. Clever? Definitely. Eye-opening? Literally.

Question 4: How can we maximize logistical and staff savings?
There isn’t much money to be made in vending bags of pretzels, but vending machines don’t have to be low-margin affairs. Premium vending experiences such as the aforementioned Spectacles are out there; you just have to wrap your mind around using the vending kiosk as a self-checkout to reduce human and systems costs.

For example, Let’s Pizza is an Italian invention that takes the bite out of common pizza-making costs. This vending gizmo whips up a custom pizza in under three minutes for waiting customers. At up to 100 pizzas per fill-up, the vending kiosk is more economical than paying a team to throw dough in the air.

Another high-tech, high-profit market entrant is ZaZZZ, a smart vending machine that sells American Green cannabis. Although it’s not yet ready to go public, the concept is straightforward: Make it easier and more discrete for people to buy pot. Certainly, the company faces some hurdles, including age-restricted sales and state-by-state marijuana laws. But ZaZZZ is certain it’s doable with specialized software.

Vending machines might have gathered some dust over the years, but they’re poised to become retail’s next big boom. In the meantime, settle for a snack from the one at the next rest stop you pull into, and ponder how these seemingly mundane machines will evolve.

Tony Scherba is the president and a founding partner of Yeti LLC, a product-focused development and design studio in San Francisco. Yeti has worked to develop large-format touch-screen projects, mobile applications, and software systems for clients such as Google, Westfield, Massachusetts Institute of Technology, and Flextronics. 

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RILA launches first-ever global retail challenge

BY Deena M. Amato-McCoy

The Retail Industry Leaders Association (RILA) is challenging co-eds to come up with ways to reshape the retail industry.

Through a partnership with the Bensadoun School of Retail Management at McGill University, RILA is introducing the (R)Tech Global Retail Challenge, a competition that encourages students around the world to develop creative ideas that can reshape retail in the circular economy. VF Corporation and Canadian Tire Corporation are sponsoring the event.

The competition is the brainchild of the association’s (R)Tech Center for Innovation, a division that exposes executives to the technologies and innovations defining retail’s future.

“Since its inception, RILA and the Center have been focused on helping retailers solve grand retail challenges and drive their businesses into the future,” said Adam Siegel, senior VP of innovation for RILA. “We are confident this competition will open students to the opportunities within retail and foster meaningful solutions that can help shape the future of our industry and its contribution to the circular economy.”

RILA and McGill have invited over 90 universities from around the world to join the challenge. Students will participate as either one- or two-person teams, and each will be tasked with finding solutions to accelerate young consumers’ participation in scalable circular economies for retail and consumer products. All teams will be lead by faculty advisors.

The challenge will start in early fall, and continue for six weeks. The teams will gather at McGill University for a finals weekend on November 15-17, where finalists will be judged by executives from sponsor companies, as well as retail and circular economy experts, according to RILA.

“The (R)Tech Global Retail Challenge exposes students to one of these Grand Challenges: sustainability and the circular economy,” said Dean Isabelle Bajeux, Desautels Faculty of Management at McGill University. “Teams will be equipped to find innovative solutions that could lead to new entrepreneurial ventures. This competition will showcase the future of retail from the next generation of industry leaders.”

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Retailers with the most searched return policies are…

BY Deena M. Amato-McCoy

As more companies crack down on returns fraud, consumers are turning to Google to familiarize themselves with retailer return policies.

Retailers are tightening their returns policies in effort to protect themselves from shoppers abusing the service, however new rules often take a toll on innocent customers. Afraid of getting stuck with unwanted purchases, more consumers are using Google searches to get the skinny on retailers’ return policies and requirements prior to visiting a store, according to new data from Google search analytics toolkit, SEMrush.

According to data, Walmart tops the list of policy searches, garnering 74,000 monthly searches through the key words, “Walmart return policy.” Best Buy followed with 60,500 monthly searches for “Best Buy return policy.”

Amazon rounds out the top three when it comes to return policy searches. These searches highlight consumers’ wariness regarding Amazon returns, especially since the online giant recently began closing the accounts of customers who return too many items.

Coming in at the bottom of the list was Nordstrom, where customers searched for 76% less “Nordstrom return policy” queries than Walmart, according to the study.

Here is the full list of retailers, ranked from the highest to lowest return policy searches:
1. Walmart

2. Best Buy

3. Amazon

4. Target

5. Macy’s

6. Costco

7. Sephora

8. Home Depot

9. Ulta

10. Kohl’s

11. Ikea

12. Nordstrom

“Naturally, customers in the United States will seek out ways to return their products to major retailers. However, Google search trends indicate that customers of certain retailers have less faith in their purchases than others,” according to the study.

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