In one of the malls I noticed a Proactiv vending machine. As you might know, Proactiv is a treatment for acne, which is typically distributed via infomercials and mall kiosks. This was the first time that I saw their products in vending machines, despite, it turn out, that they introduced this channel already a few years ago.
I started to consider the merits of selling products with vending machines. Soda and snack companies have been doing it successfully for decades. However, can this practice be as beneficial for more expensive non commoditized products?
Proactiv is not the only premium brand that has utilized vending machines. Others include mostly technology and beauty companies like Best Buy, Ipod, Sephora, and Clinique.
The vending machines that they all employ are similar and provide a useful service when located in niche areas. I found particularly useful Best Buy's vending machine selection when placed in airports to provide travellers with products to kill time or with items that they might have forgotten, like chargers. Other travellers must have liked their utility too, as Best Buy's airport vending machines and especially Ipod vending machines have proven successful in selected airports.
However, I am skeptical about placing these vending machines in malls and shopping areas, essentially as substitution to a proper retail presence. Despite a cost reduction compared to a typical retail store, these machines do not provide the necessary customer experience that should be expected in a retail setting. These machines cannot customize their product presentation to fit the customer, offer suggestions, or create a comfortable and compelling buying experience. Therefore, retailers should adopt the vending machine concept only in very specific settings to avoid negative effects on brand perception and ultimately on sales.
This is going to hold true at least until vending machines will be able to offer a customer experience that more closely resembles a store shopping experience. I would venture to say that that day is still far away, even though vending machine technology is improving fast.
The vending machine pictured below is a new state of the art machine developed for JR East Water Business in Japan to distribute their beverages in train station throughout Tokyo and nearby cities.
From afar, the vending machine looks like a digital billboard, flashing ads on a large screen. Three motion sensors detect when someone is near suddenly displaying three rows of drinks. A tiny camera just above the 47-inch touch screen estimates a buyer's sex and age, using the data to recommend a few things that he or she might like. The buyer touches the image of the chosen drink, IC-chip readers below the display respond to the swipe of a commuter card or cellphone filled with electronic cash, and your choice drops into the dispenser below.
At the end of the transaction, all the collected data is transmitted over a citywide wireless network to the company's central computer servers (http://www.fastcodesign.com). The real-time information allows the company to observe and learn from each customer's buying behaviors and to eventually refine its recommendation process. The same data could be used in the future to deliver a different ad experience and a more targeted product presentation.
Intel, most typically known for its microchips, is also developing a vending machine. Called Intelligent Vending System, it contains similar features as those that characterize the JR East Water Business vending machines, including the large touchscreen display, the camera with facial recognition technology, and the wireless connectivity.
Both of these vending machines are certainly a step forward compared to the systems that are commonly used in the US. However, as I mentioned above, they are still far from being capable of delivering a truly exceptional customer experience. Retailers seeking to improve ROI, should not turn to vending systems just yet. The should rather develop an innovative and unique in-store concept that would ultimately increase sales, as I have showed in my other posts in this blog.