How Technology Will Change Vending, Part 2

The V-Engineering: The next generation panel and educational session at the 2013 NAMA OneShow gave operators the opportunity to see how consumers will view vending in the coming years. Consumer engagement, already an important topic, will become paramount to competing with retail as well as expanding the locations vending serves and analyzing how consumers use machines.  

Vending must improve customer engagement

Brendan Kehoe from Crane Merchandising Systems reported on customer engagement in various retail settings, including vending, and recent sales data for those businesses. Kehoe showed examples of how convenience stores are using a combination of advertising, special pricing and promotions to engage customers. Grocery stores use special pricing and promotions as well as attention grabbers such as end caps. Even pharmacies are working harder to engage customers with special pricing. Nearly every retailer has some kind of loyalty and rewards program, according to Kehoe. The results from 2009, back when businesses were still feeling the recession, showed convenience stores and drug stores experienced growth, grocery stores were almost even, but vending declined 10 percent. Kehoe blames a lack of customer engagement. He thinks video screens on the machines are part of the answer to the customer engagement problem.. "This gives an opportunity to do much more with the customer," he said.

Just having a screen isn't enough, he warns. Instead operators must create a user experience, which includes advertising, promotions, shopping carts and social media.  "[The screen must] always ask 'Do you want more," said Kehoe. In the future, Kehoe sees operators utilizing mobile devices to engage consumers and drive them to the machine, and sales. 

Next Joanne Bethlanhmy of Cisco gave attendees some great news for vending - it is considered a glimmer of hope for the future of retail. In a piece of thought leadership developed for the retail industry and presented in January at the National Retail Federation (NRF) show, Bethlahmy discusses digital malls - a new wave of self-service shopping that includes vending machines and micro markets. 

"What we see out there are three technology tracks in self-service retailing," said Bethlahmy. The three include non-traditional vending, micro markets and virtual stores.

Bethlahmy explains that consumers are showing a willingness to buy items beyond food and beverages from machines with very high price points. However, the brands are engaging those consumers, including talking to a live person via a video screen. Micro markets are an obvious choice for the digital malls providing refreshment, according to Bethlahmy. She indicates that the last element, virtual stores are a physical manifestation of ecommerce where people can buy something and have it delivered later to their home.

"But you have to have scale…you have to have a lot of these [technologies]," warned Bethlahmy. "Alone they don't provide the needed user experience, but pulled together they could be large and profitable."

Cisco's vision of the future is to combine the trends into a sophisticated, self-service digital mall. Possible locations include resorts, public transportation stations and stadiums.  

Intelligent vending advances

Intelligent vending is using what the customer does at the vending machine to deliver a better experience -- and it's continually evolving. Consumers want one-on-one marketing that is targeted as well as the product they want when they want it, explained Raj Maini of Intel Corp. at the V-Engineering session. Using that information Intel assisted Pepsi with its new interactive vending machine. It engages the consumers by allowing users the soda they want, letting them share their experience on social media and even play a game. The vender does this all while an HD camera records their experience. That customer data, Maini explains, is then run through a robust program, which produces actionable data including personal advertising to specific age groups or gender -- all increasing revenue. "There are many internal elements that lead [and will continue to lead] to this transformation," said Maini, "such as 'open' standards, contactless payments and software and hardware advancements."  

These three presenters really bought into perspective how focusing on the consumer could grow opportunities in the future. Analyzing the customer will help vending evolve into a strong and more profitable market segment.

In the upcoming part 3 of How Technology Will Change Vending, Mike Lawlor from USA Technologies, goes into detail about how technology can positively affect an operators’ bottom line. 

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