Today’s modern retail customers expect convenience above all else. According to research in Forbes, Millennials and Gen-Z consumers have different expectations of the retail industry.
“Driven by technology and an on-demand culture, younger generations of consumers have grown up with media and services that are available at the push of a button, anytime and anyplace.”
Shoppers will always opt for more efficient and convenient ways of getting what they want when they want it.
Enter the vending machine. No longer is the vending machine method of delivery limited to soda, snacks, or even pizza. Vending machines are taking convenience to the next level with machines that dispense an array of items at the push of a button. Berg Insight, a market research firm based in Sweden, forecasts the number of connected vending machines worldwide will grow at a compound annual growth rate (CAGR) of 16.2%, from 2.6 million units in 2017 to 5.4 million units by 2022. The smarter the machine, the more diverse and high margin items it can carry.
The rapid growth of the vending machines market is not surprising when you consider how retail trends are evolving to meet consumer demands. Here’s what you need to know about top trends that are ushering in the vending machine revolution.
Vending machines are offering more options than ever before
Pizza is just the tip of the iceberg when it comes to what can be purchased from a vending machine. The vending machine market has extended into non-traditional categories in the last couple of years, transforming the automated retail market.
Around the world, there are machines that spit out electronic products, hair extensions, books, artwork, and even live pet crabs. Plus, vending machines, like other consumer technology, have gotten really smart. The computing power of IoT can be expanded to vending machines to provide easy, convenient, and quick solutions to everyday needs, whatever they may be.
Convenience dominates this advancement in technology. Age-restricted products, which used to require manual age verification, can now be sold in vending machines. Companies, like Civic, offer solutions that allow customers to buy age-restricted products like e-cigarettes or CBD, from machines using their smartphones. In South Africa, vending machines have become a convenient healthcare solution. Dubbed the “ATM Pharmacy,” the units dispense regularly prescribed medication to patients with chronic illnesses such as AIDS, thereby reducing waiting times at public healthcare facilities.
Vending machines are beginning to fuel a huge segment of growth in the retail market. For companies seeking to reach more consumers without high overhead costs, vending machines are a perfect solution.
Convenience is key
Nielsen reports that 46% of consumers view shopping as a chore. In today’s hyperconnected world, convenience is the ultimate customer converter. Vending machines sell what people need, where they need it, when they need it.
A perfect example? The proliferation of vending machines in airports. Travelers in transit can now pick up a Uniqlo vest, a full case of makeup from Sephora, or even a bouquet of flowers. The best part? Retailers are making a ton of sales with relatively little overhead costs. According to Business Insider, “the vest vending machine averaged $10,000 in sales a month.” Airport vending machines offer customers an easy, convenient way to purchase items with relatively little competition.
At Civic, we look at the automated retail market and see endless possibilities for smart vending machines. Offering automated retail solutions together with our partners, we bring forward technology that allows for quick and easy digital identity verification, eliminating the hassle for both the customer and the provider.
New technology can make or break a company
Technology is dramatically changing the retail landscape, and automated retail is no exception. Vending machines which originally had you rummaging for loose change are now intelligent enough to take credit and debit cards, QR codes, and other modes of payment.
The idea of a vending machine network that accepts payments and verifies identity via a single app is definitely something to get excited about. Intelligent vending machines already provide real-time data, so retailers can keep track of inventory, find out how fast each item sells, identify issues, and more. With this new layer of technology, more product categories become available for automated retail.