Skip Ribbon Commands
Skip to main content

News Release

Istanbul

Vending machines: A micro revolution in retail

Buying the latest electronic products is itself becoming a futuristic experience at the US retailer Best Buy with the arrival of a rather special member of staff.


The company is using a robotic arm nicknamed Chloe in its New York store to pick out the DVDs, video games and other items ordered by clients via a touch screen from a wall behind it.

Along with other big name brands including Nike and Coca-Cola, Best Buy is overhauling the clunky, old image of a vending machine. Today’s ‘automated retail machines’ are increasingly interactive, are found in a range of locations – including hotel lobbies, malls, train statio​ns or within stores – and often come in bright colours and playing music.

For retailers, they can play a far more strategic role than the grim functionality and convenience of their predecessors. With a high tech design that is often tongue in cheek, they are frequently used by brands to catch the eye of millennials, impulse buyers and other target groups.

Part of the reason is still convenience, of course. “We can put these in locations that are under-used,” says Tracey Hatley, US Director of Specialty Leasing at JLL. “It’s a win-win situation.” And cost is another advantage – as the machines need little human input once up and running. They are also increasingly being designed with a wide range of software analytics built in – including inventory controls, sales tracking and real time information which is passed on through a web connection.

Technology and robotics

But it is not simply cost and convenience which is driving the striking, pink Benefit Cosmetics booths in airports, Coca-Cola’s jokey, interactive machines in universities or, last year, the tweet-activated Walkers Crisps automated outlets in London. Giving the example of a machine which makes new door keys, Josh Harris, JLL’s US Retail National Accounts Manager, says: “That’s where automated retail is moving to. More and more it’s about technology and robotics; it’s less about increasing distribution and more about creating an interactive experience with consumers.” It is no surprise that Coca-Cola and Nike are using this technology to intrigue, amuse and relate directly to some of their core client groups – students and runners.

Coca-Cola’s ‘Hug Me’ machine, located in the National University of Singapore, rapidly attracted crowds of students when it gave out free cans to people who put their arms around it – a formula which the company has repeated with local variations in Tokyo, Stockholm, Istanbul and other cities. Similarly, using its own sophisticated IT last year, the Nike+ Fuel Box machine switched locations around New York, giving clues of its latest whereabouts to wearers of its activity monitor wristlet, the Fuel Band. Members of this cherished group of customers could then use a USB connection to buy Nike socks, hats and other brand items when they tracked down the dispenser.

The ability to move these machines from one place to another helps retail strategists try out ideas, says Hatley. “It’s an incubator project for you to be able to test the concept. If it doesn’t go well you can go to another location.”

This kind of experimentation and development could hold the key to much of the retail future, adds Harris. “Stores are looking to go smaller and smaller, with many of them going for the option of a showroom which then sends the product out to centralized distribution centers via Fedex or UPS.”

Going global

So how will these micro-stores develop in future? They’re being rolled out across the US, Canada, Europe and Japan. Hatley, who has recently spotted signs of interest from China, sees a “definite” future for these machines around the world.

While much of the development will come from the large corporations reinforcing their brands, there will be other approaches. For instance, products which could seem dull if sold on the busy shelves of a supermarket – such as razors or coffee capsules – can be transformed, through clever automated retailing, into an entertaining interaction with the futuristic science or robotics.

Changing consumer tastes are also providing new gaps in the market. In Australia, the Füd Revo-lution is selling gluten-free, vegetarian, vegan, sugar-free, paleo and other kinds of healthy food which is freshly made that morning from its vending machine in Melbourne. Brisbane-based All Real Food provides a similar service in what it calls ‘self-service cafes’. “These healthy ‘vending machines’ are a great example of innovative and entrepreneurial firms responding to consumer behavior changes,” Dr Gary Mortimer, consumer behavior expert at the Queensland University of Technology tells News.com.au. “We should expect to see these vending machines popping up in office tower foyers, train station platforms, transit hubs, gyms and campuses around Australia.”

Much also depends on consumers accepting the next generation of vending machines beyond mere novelty value – and Millennials are key to this.​

Coca-Cola is one of the leading corporations which is working on the premise that the millennials will be the “single greatest force to the world and our respective businesses” by 2020. And if Coca-Cola has decided to build relationships with this group through automated retail, it’s a reasonable guess that many other big names will be tempted to follow suit. 

This article originally appeared on Real Views, JLL's news site that features stories exploring the world of real estate and its impact on the wider business world. Visit the Real Views site to subscribe for our weekly email of top stories, delivered direct to your inbox. www.jllrealviews.com​​​​​​​​