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Next-gen vending machines: 5 reasons intelligent vending is trending in ecommerce

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5 minute read

Move over pop-up shops, there’s a new digital-meets-physical invasion that’s got the likes of Walmart, Uniqlo, CVS, Adidas, ASICS and Nespresso serving commerce through connected boxes. Intelligent vending machines are popping up everywhere consumers are found — from airports to school campuses, business parks, subways, arenas, bars and festivals.

The global intelligent vending market is projected to grow 17% over the next 4 years (Technavio) to $12.45 billion, with 40% of this growth coming from the Americas. How can smart vending machines amplify your omnichannel commerce strategies?

Speeding up BOPIS

More than 40% of shoppers say buy online, pickup in store (BOPIS) is the most valuable aspect of retail shopping (iVend). But many shoppers complain wait times are too long at pickup counters in store.

Enter BOPIT: buy online, pick up in tower. With 24/7 access and no service desk queues, pickup towers can retrieve orders in less than 30 seconds.

Both Walmart and Canadian Tire have invested in 16-foot tall units that stash up to 250 orders for customers to retrieve by entering PIN or order numbers, or flashing their phones displaying QR or bar codes.

ASDA vending machine
Image: RetailGazette

While Canadian Tire has only a handful of stations, Walmart will have over 700 pickup towers by year-end.

Accelerating last-mile delivery

Using vending machines as hyper-local micro-fulfillment centers for last-mile delivery is perhaps the one use case Amazon hasn’t already patented.

But competitor Walmart isn’t wasting time taking advantage of testing them with first and third party delivery services such as crowdsourced platform Spark.

While obvious use cases for vending machine fulfillment include meals and grocery, anything that is typically couriered is fair game — think office supplies, auto parts and other B2B goods.

Inventory location data and delivery instructions held in the cloud can connect with delivery drivers, and buyers may see Uber and DoorDash-like real-time order stalking capabilities coming soon.

Distributing convenience

Intelligent vending machines allow brands and merchants to reach customers outside the mall and off the high street, placing a relevant selection of goods tailored to the location.

We’ve all seen airport vending machines touting travel-sized electronics (Best Buy) or cosmetics (Benefit). Uniqlo’s unique San Francisco Airport installation serves one item: warm vests for travelers who may not have packed properly for Northern California’s finicky microclimate.

uniqlo vending machine airport
Image: DigitalTrends

CVS is piloting vending machines in airports, bus terminals, subways, college campuses, office parks, hotels and more. Stocked with up to 70 products with selections curated for each location, such as over-the-counter medications, personal care items, first aid supplies, batteries and phone chargers that can be purchased through 22-inch touchscreens. Customers can apply promotional codes through a QR reader and connect their purchases to their loyalty accounts.

Pop-up promotions

To promote its new Splash Packs line of baseball cleats, Adidas placed smart vending machines in Boston and LA during the 2018 MLB World Series finals.

Designed to replicate the post-game celebrations where teams douse their coaches with coolers, each Create a Splash installation dispensed team swag like foam fingers, fanny packs, towels and even autographed baseballs — all for free.

adidas splash vending machines
Image: KicksOnFire

Prizes were unlocked based on real-time gameplay. For example, runs by a specific player would release gear by that player.

Lululemon took “branding exercise” to another level when it placed vending machines strategically across marathon training routes in New York and Chicago. Stocked with socks, hats, hair ties, Kleenex and a variety of healthy snacks, runners could unlock goodies from the Run Stop Shop for free by submitting an email address or social media handle. Hashtagging a photo with #thesweatlifeNYC or #thesweatlifeCHI unlocked premium gear — again, for free.

Not to run behind, ASICS launched smart vending machines to promote the launch of its Singapore ecommerce site. Mystery locations were revealed weekly on ASICS’ socials.

asics vending machines

Image: Marketing Interactive

Shoppers could place orders through the vending machine for in-store pickup or home delivery. To drive shoppers to the e-store, the machines displayed questions with answers to be found on the website to unlock prizes and discounts from 15% to $200 off their order.

Are traveling unmanned pop-up shops the new “mobile” commerce?

Getting (really) personal

Vending machines can dispense personalized products, for example Yves Saint Laurent’s Lipstick Engraving ATM 2.0 experience that engraves lipsticks with buyers’ names.

But smart vending machines get even more personal. Herbal tea merchant Hung Fook Tong uses a combination of artificial intelligence and facial recognition technology to profile their vending machine customers. Identified customers receive personalized recommendations based on their purchase history, and new customers by their age, gender. Recommendations also factor location context, including purchase trends and current temperature and weather conditions.

Alibaba’s Hema fast food shop allows customers to order through a smart vending machine and “pay by face” using image recognition. Image recognition may also be used to tweak inventory over time by tracking the gender, approximate age and even clothing style of users and walk-by traffic in a given location.

hema face recognition payment through vending machine
Image: CBS

While facial profiling appears dystopian, we’re already using it to unlock iPhones and auto-tag friends on social media. It’s believed that China is only two to three years ahead of the US for such technology. Are we ready?

How headless commerce supports intelligent vending

Since the earliest kiosk concepts, digital-physical installations have typically been stand-alone, siloed experiences. They couldn’t leverage all the features of the e-store, nor pass back data to central systems of record.

Ideally, smart vending machines integrate seamlessly with important systems including commerce, ERP, operations and inventory management, loyalty programs, analytics and content management. API-driven, headless commerce supports integration with any touchpoint, in this case, the smart vending machine as the “head.”

Some smart vending use cases API-driven commerce could support:

  • Custom user interfaces tailored for large digital screens and vending machine use cases, such as navigation menus, presentation of product information, forward/back controls and interactivity with mobile phones.
  • Serving sub-sets of product catalogs curated for each machine and location
  • Personalized offers and discounts based on email or loyalty ID
  • Combine mix of physical (fulfilled through machine) and online upsell/cross-sell transactions (shipped to home or store)
  • Universal buy buttons and carts that connect seamlessly with ecommerce’s inventory, customer accounts, order processing and fulfillment
  • Custom cart rules and checkout flow (e.g. cut out billing address and credit card entry for ship home or store, accept card swipe, NFC or digital wallet at point-of-sale)
  • Custom promotional codes and rules tailored for each machine or location
  • Integration with payment gateways and payment methods such as Apple Pay and other mobile wallets
  • Integration with in-app payments (unlock goods through SMS code or mobile checkout)
  • Pass back order details to customer accounts, loyalty programs and remarketing programs

Intelligent vending is an emerging “head” in today’s world of commerce everywhere. Headless commerce’s ability to support customized front-end interfaces and connect existing commerce data, functionality and records to hyper-local mini-stores makes it the right “body” for this trend.

Linda Bustos
Linda Bustoshttp://www.getelastic.com
Linda is an ecommerce industry analyst and consultant specializing in conversion optimization and digital transformation.
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