The Global retail automation market is growing at a CAGR of > 10.9% and is forecast to be worth about US$ 19 Billion by 2020. Along similar lines, the Global Self Service Technology market is expected to garner $31.75 billion by 2020, registering a CAGR of 13.98% during the period between 2015 – 2020.
Yet, the regular stand-alone Vending Machine market (not including micro-markets) is feeling just a fraction of that growth momentum, with sales barely recovering to pre-recession levels.
The irony lies in the fact that Vending Machines -the forerunners of all modern automated retail systems- are being left behind in the game they invented.
The good news is- the consumer mindset and the market conditions have never been more conducive for Vending Machines to finally become a Mainstream Retail Channel.
But before the Vending Machine can make a widespread comeback, and live up to its true potential, there are a plethora of issues that need to be resolved.
Broadly, these issues fall into three categories, and all of them point towards a need for the Vending Channel to develop a deeper and more cohesive technology focus :
The channel is not able (or willing) to leverage the vast array of exciting consumer technologies available today to drive growth:
- Better Buying experience: Convenience alone is not enough anymore.
Despite the growing number of technologies such as Facial/Voice/Gesture Recognition, Artificial Intelligence, Virtual/Augmented Reality, Touch-free cashless transactions, Drone/Robots etc. that can be implemented to provide a smoother and more exciting consumer experience, the average vending machine experience has remained purely transactional.
- Solving issues: All great consumer experiences start with one crucial step- gathering and analyzing consumer data(including feedback).
By leveraging analytics to Pinpoint, Solve and Preempt consumer issues, the Vending Channel can evolve from being a “convenient” to a “preferred” point of retail.The effort/resources that go into setting up consumer/market/business intelligence systems and/or into improving consumer experience need to be viewed as valuable investments that keep the consumers coming back and grow the bottom line.
The Vending Channel was always “technology enabled”, but vending hasn’t exactly been at the forefront of Retail Technology Innovation as one might imagine:
- Vending Machine operators will have to develop deep domain expertise on retail consumers and their fast-changing buying behaviours in order to innovate and drive growth in the channel.
- As Retail focuses on “Omnichannel” performance to drive business, the entire Retail eco-system including the Vending channel will have to integrate more tightly and contribute to the common goal of a consistently superlative consumer brand experience.This will only be possible through common technology drivers.
Vending as a channel has grown and matured over the last century, but for the most part, it is still perceived as a tiny piece of the Mainstream Retail Jigsaw.
Vending as an Industry remains unorganized, fragmented and “small scale” in nature. With automated retail growing at its current pace, Vending has the opportunity to become a very significant piece of the overall Retail ecosystem.
- The various technology and non-technology value providers in the Industry need to align behind a shared vision for the vending channel: a vision that has Inspiring Consumer Experience at the core. This will ensure that Vending becomes the highly competitive Retail Channel that it can be.
- Channel ecosystem integration will also drive operational efficiency by enabling through-and-through Channel Visibility and Shared/ Data Driven Decisions across the value chain.
Today, various point technology solutions are available that can resolve most of these issues; but the challenge still remains: how to ensure that data and intelligence are being shared and used effectively across the vending channel to deliver better Consumer Experiences?
With the coming IoT revolution, the next generation of connected Smart Vending Machines might leapfrog some of these issues entirely; Technavio’s analysts forecast the global intelligent vending machine market to grow at a CAGR of 38.24% during the period 2017-2021. However, like most Huge Technology Waves (Cloud, for example), Vending machines will probably become smarter in phases.
It seems only logical to infer that over the next 5-7 years Integrated Vending Technology Solutions will play a crucial role in ensuring the Standard Vending Machine around the corner is “intelligent enough” to meet the challenges of the incredibly complex Modern Self-Service Retail Industry.
The future of the Vending Industry depends on Technology, Focus & Innovation.
Click here to view State of Vending Industry Report (Embedded to the Report PDF).