Digital Media Revolution is Coming

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If there is one thing that has been a constant topic of interest among vending and OCS practitioners it is determining how to successfully enhance the consumer experience. An increased level of interactivity between the consumer and digital media in most retail environments has been shown to effectively increase traffic, sales, revenues, and loyalty.

The recent implementations of video screens and digital signage in a variety of applications have positively impacted customer purchase behavior at the point of sale (POS). As a result of advancement in video distribution and display technologies, digital media has started attracting the attention of self-service providers, including vending and OCS operators.

The fact that a video presentation screen can also serve as a touchscreen input device makes applications even more relevant by providing a platform for promotional upselling to an already engaged customer. The real opportunity for vending and OCS channels may lie in the fact that there is potential for merchandising products in the machine as well as sharing in revenues from saleable advertising spots.

The length of time until digital media becomes an integral part of the vending landscape is unknown, but reliable sources claim machine manufacturers have had preliminary conversations with digital network hardware and software suppliers. Perhaps the paid advertising model, implemented so successfully at other retail locations (e.g., post offices, gas stations, and fast food restaurants) may serve as adoption motivators for vending and OCS industry leaders.

VENDING APPLICATIONS FOR DIGITAL MEDIA

A handful of technology companies have developed liquid crystal display (LCD) screens for vending machines and have been testing them in cooperation with video and touchscreen providers, vending product manufacturers and vending operators. The most extensive testing has been done by AVT (formerly known as Automated Vending Technologies). AVT is both a vending machine operator and manufacturer and has developed its own vending management software and hardware.

In recent years, AVT has successfully placed its machines, equipped with proprietary hardware and software, at diverse vending locations.

Another leader in the successful placement of digital signage on unattended point of sale equipment is Zoom Systems. For more than three years, Zoom Systems has been refining its business model (ZoomShop) to focus on high-end, branded consumer products like Apple iPods, Sony Access Electronics, Proactiv Solutions, and Rosetta Stone language software. Zoom Systems expects to have 800 automated retail units in place by the end of 2008, half of which will appear as e-Spot machines in Macy’s department stores.

LCD SCREEN CONTENT CONNECTS VIA INTERNET

AVT’s glassfront machines feature a 7-inch wide LCD screen, located above the payment keypad, playing pre-recorded, streaming video advertising content. The video screen connects to a PC via the Internet, which allows content to be transferred to the machine remotely. The LCD screen relies on the same PC connection that allows remote access of other machine activities.

During the past year, AVT tested streaming video commercials in 10 of its machines in cooperation with select vending product suppliers. These machines displayed commercials for a variety of products, including Otis Spunkmeyer Inc., Living Essentials Inc. (maker of 5-hour Energy) and Tropicana Products Inc.

Another 10 machines serving similar populations were configured with identical product offerings but without the video screens for comparison purposes. As a side note, the machines involved in the test did not have cashless readers.

The company has reported that the machines featuring the video commercials experienced sales increases of 20 to 30 percent over the machines without the broadcast content. While these tests are only a first step, they demonstrate the potential impact digital media can have on sales of promoted items.