redbox Makes Waves, with Lessons for Full Line Vending

For the last few years, Automatic Merchandiser and VendingMarketWatch.com have reported the emergence of self service kiosks, a separate but related industry, and attempted to determine this industry’s relevance, if any, to full line vending.

The key observation has been that self serve kiosks will bring new conveniences to consumers and, by utilizing some of the same technologies used in vending, enhance vending’s overall reputation.

The technologies that will be common to both self service kiosks and vending machines include remote machine monitoring, electronic security, Internet-fed audio-visual content, cashless payment, and computerized touch screens.

Kiosks: new and evolving

The self serve kiosk industry is fairly new and growing rapidly. The majority of kiosk deployers are large retailers, along with travel and hospitality locations. The technology in these systems is complicated and rapidly evolving.

Last month, Selfserviceworld magazine named the redbox DVD kiosk as the “hottest” self service application to date, based on a reader survey.

The magazine selected 55 deployments and determined the 10 most popular kiosks, based on Internet presence and media mentions. The magazine then asked its readers to rank these 10 kiosks to determine the “hottest” one. Close to 600 readers voted. The voting was carefully policed to prevent manipulation.

redbox, a DVD rental kiosk that evolved as a result of McDonald’s experiments with on-site vending, was the clear winner, receiving more than 50 percent of all the votes.

VendingMarketWatch.com has also recognized redbox’s success, growing to 42,000 locations in a 5-year period.

Lessons for full line vending

There are several lessons for the full line vending industry in redbox’s success.

redbox is not the only DVD rental kiosk introduced to the market in recent years. What set this kiosk apart from the pack are the following:

  • The support of a committed organization.
  • Careful attention to the placement of kiosks. As with vending, location is critical.
  • A seamless operating plan. The machines are stocked with the latest DVD releases, based on hard data.
  • A serious marketing plan.
  • High consumer value.

These factors are obviously interdependent. The last point, high consumer value, is the combined result of all the factors, and the most important factor of all.

High consumer value

Consumers can go to the Internet to find out which redbox kiosk has the title they want. For a $1 rental, they can get the DVD and return it at their convenience retailing. But the opportunity needs an organization that understands its consumer value and can support its delivery. This is what set redbox apart in a crowded field of competitors.

The lessons for full line vending are clear.

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