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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