Return of the vending machine

Return of the vending machine

Coronavirus is revolutionizing the retail environment, changing consumer behavior and expectations. Consultant Chirine Salha investigates how vending machines are making a comeback in a new world of contactless interactions.

With more and more purchases taking place online, people are becoming increasingly comfortable with a “salesperson-free” experience. This trend was growing anyway; the current pandemic is simply fast-tracking it. The automated vending machine is a contactless experience known to many. In the face of the economic recession, due to the current pandemic, the vending machine market is expected to grow by an estimated USD 12.2 billion, equivalent to a CAGR of 1.3 percent from 2020 to 2027, reaching USD 146.6 billion by 2027.

Vending machines have been resurfacing in a variety of activations, giving brands a chance to strategically test the waters and doubling up as media placements. With added functionalities and AIs, they also offer personalized experiences.

Staying true to its purpose of practicality, Japanese retailer Uniqlo is offering travelers THE VENDING MACHINE popular, affordable and easy-to-pack items such as the Heattech tops and Ultralight down jackets at airports. The Uniqlo vending machine was first introduced at Oakland International Airport, with others following in cities including Los Angeles, Houston and New York.

More and more vendors are realizing that they need to start providing their clients with customizable options. British accessories designer Emma J Shipley stayed ahead of the game and launched Scarfi, an app that allows customers to virtually try on and purchase its colorful silk scarves. The app was launched at Westfield Mall in London with a pop-up event where shoppers could wear the scarves virtually before purchasing them. Shoppers were then directed to vending machines to collect their items.

Another trend gaining steam is facial recognition technology, which screens the user’s preferences to prepare their morning coffee. Facial recognition technology can also recommend drinks based on the customer’s characteristics, such as age and gender, that are picked up by touch screens and sensors. These recommended products may even differ depending on the weather conditions and time of day.

Books Actually in Singapore introduced another fun interaction. The retailer launched an in-store vending machine that dispensed “mystery books” with no cover, improving the whole purchasing experience by adding an element of curiosity.

Let’s not forget the traditional candy and soft drink vending machines. Reese’s, a brand belonging to The Hershey Company, came up with a legendary Halloween stunt, unveiling a “Candy Exchange Vending Machine” where trick-or- treaters simply traded their unwanted candies in exchange for the famous Reese’s Peanut Butter Cups.

Soft drinks still command a leading position in the vending machines portfolio. They make up the largest product segment, accounting for over 31 percent of sales. What is evolving, however, is the use of AI. Intelligent vending machines are becoming key to the future of automated retailing. Coca-Cola, in particular, uses AI in its vending machines in a number of ways. AI helps Coca Cola determine the best location for its machines by using location data, such as footfall, local economic indicators and competitor information. It also relies on AI to integrate its loyalty scheme. In Japan, the “Coke On” smartphone app allows customers to collect points when they make purchases from the machine using their phone. Coca Cola thus collects customer preference and buying data, and the customer is rewarded with points for future vending machine purchases.

Coke also worked on building emotional connectivity through AI and a chatbot. It has added to its vending machines the ability to adapt the personality of the chatbot feature to reflect the machine’s location. For example, a machine in a university campus could have a cool and fun personality, whereas a machine in a hospital will have more of a sober tone.

Besides technology, at the heart of the vending machine trend is another strong pillar: health. Consumers want the power to make dietary choices that suit them best, even if it is an impulse, on-the-go purchase. And the vending industry is working hard to cater to that. As storage technology improves — refrigeration, packaging and humidity control — so too is the selection of healthy choices on offer, such as restaurant-quality pastas and salads, vegan and gluten-free options, chef-crafted dishes and so forth. Some vending machines can even customize, cook and prepare food like noodles, rice dishes and pizzas.

However, most likely due to the ongoing pandemic, though the humble vending machine has become a smart device with the potential to rival other retail experiences, the most relevant purchase for the moment appears to be medical masks and toilet paper.

Chirine Salha
Senior Consultant

Add to Favorites

Your email address will not be published. Required fields are marked *