How vending machines could play an important role in the ex-urban economy

The future of automated retail may lean heavily on a format from the last century, and that’s no bad thing for brands.

Of all the ways in which the pandemic has transformed retail, the speed that it’s forced brands across sectors to adopt in-store technology is perhaps the most significant. A recent Euromonitor study confirmed that consumers now show a clear preference for checkout protocols that minimize human interaction, and are growing increasingly open to the idea of automating the purchase journey.

‘Automation can be leveraged for both optimal customer convenience and enhanced experience, while still providing comfort and reassurance to consumers,’ Erik Mueller-Ali, director of speciality retail at global architecture practice CallisonRTKL, told the Telegraph. ‘This can take the shape of digital click-and-collect functions in more localized places; 24-hour vending machines; or augmented reality fitting options and interactive in-store displays.’ One of those examples stands out, not because the solution represents the cutting edge in innovation, but rather because it’s so familiar: the vending machine. For brands and organizations, that accessibility and relative ease of implementation has made them look again at a concept most consider a relic of the last century.

 For brands and organizations, accessibility and relative ease of implementation has made them look again at a concept most consider a relic of the last century

Many consumers will have first noted (and welcomed) the vending machine renaissance when frantically searching their pockets for a face mask while waiting to board public transport. Manufacturers like Swyft, who struck a deal with the Manhattan Transport Authority in August, have been partnering with local authorities to make sure that personal protective equipment is always available on bus and train networks. The station platform is a natural habitat for these sort of retail touchpoints of course – even if numbers had been in steady decline – and everyday essentials (though the nature of that essentialness is now new), their core market.

The vending machine’s standing is quickly being elevated beyond grab-and-go purchases, however. Even before the events of this year, the format was being used by luxury brands like Tiffany & Co. to add some Gen-Z-friendly status subversion to high-end retail. Now outlets like fashion retailer & Other Stories are taking a more straight-faced approach, this summer trialling a vending machine stocked with fragrances from their bath and body range in the ‘La Coupole’ building at Galeries Lafayette Paris Haussmann. ‘We felt very inspired by the idea of creating our own vending machine experience, turning it into a mini version of our stores,’ says & Other Stories’ head of brand design Ebba Kettner. ‘It has special features conveying several layers of our world.’ Shiseido’s new flagship in Ginza, Tokyo, opened with a similar device on its ground floor, allowing customers to grab its best-selling Ultimune product range without interacting with a store associate.

The vending machine naturally comes with some preconceptions, especially with regards to its role in food retail. With an expected assortment of crisps, chocolate bars and sodas, it’s hardly been a poster-child for the wellness revolution. This year has seen several retailers looking to change that image by using it as a vehicle to deliver fresh produce. German grocery chain Aldi Süd recently developed its Aldimat concept to allow customers to buy house-label products such as cheese and meats at any time of day. In the UK, premium supermarket Marks & Spencer has also been testing a machine that serves sandwiches and high-end ready meals. Meanwhile US chain Heinen’s has gone past provision to preparation, tackling current consumer distrust of buffet and salad bar serveries with Sally, a robot-cum-vender that makes salads to order.

 While some industries are hurting, the requirement for social distancing validates the need for vending and retail automation

One historic pain point for the vending machine market has been its inability to serve government regulated products such as alcohol and pharmaceuticals. Technology startup PopCom is developing a platform that addresses this challenge using biometrics such as facial recognition to verify users. Its founder Dawn Dickson ran one of the most successful equity crowdfunding campaigns in recent history at the start of the summer, with investors betting on a bright future for stand-alone automated retail units. ‘While some industries are hurting, the requirement for social distancing validates the need for vending and retail automation,’ said Dickson. ‘We believe that the market will continue to move towards self-service and contactless retail. Vending machines and convenience services are becoming more essential, and retailers are looking for more ways to deliver their products direct-to-customer with less human friction.’

There are still some bumps in the road, however. While vending machines might offer unparalleled convenience and reduce staff-customer interactions, they can engender other anxieties. A survey by experience design company Foolproof conducted earlier in the year found that four out of five UK customers admitted they were now interacting differently with common retail technologies, and that 72 per cent reported wiping down a public touch surface or else opting to wear gloves.

‘This survey clearly shows that people are now more averse to touching technology in light of the current pandemic than they were before,’ said Peter Ballard, co-founder of Foolproof. ‘What’s more, there are strong indications that these attitudes may become more ingrained in our post COVID-19 future. This underscores the need for changes to future product and service design.' One response to such behaviour change can be seen in Coca-Cola Amatil – the largest bottler and distributor in the Asia Pacific region – partnering with Centrapay to allow customers to purchase items using cryptocurrency. QR-code stickers (another technology the pandemic has revived) were rapidly deployed to machines, letting users link through to digital wallets on their mobile devices to order and pay. The ability to integrate such low-touch technologies at pace will be central to sustaining interest in these retail touchpoints, with investment in voice interfaces and more universal contactless payment options sure to follow.

Over and above offering a safer purchasing platform, there’s reason to believe that the vending machine could play a key role in the wider retail mix well into the future. It’s easy to see how a strategy based around self-sufficient, mobile retail outlets could figure in brands’ wider migration from the city to the suburbs and beyond as they chase a new generation of urban escapists. As we’ve covered, many have been deploying pop-ups in unfamiliar locations over the summer to learn where they might fit in a more localized retail landscape.

Vending machines could soon be the forward line in understanding what it means to be a macro brand in a micro world

As vending machines get smarter, they provide the opportunity to not only offer merchandise in a convenient and distributable format, but also to gather vital metrics about customer demographics and desires on this new frontier. Companies like PopCom aren’t just using biometrics for security but also to offer clients greater user insight. Far from slinging junk food, vending machines could soon be the forward line in understanding what it means to be a macro brand in a micro world.

Hero image: Tiffany Style Studio in London’s Covent Garden allows shoppers to get to know the brand and its products in a playfully casual environment. Photo: Courtesy of Tiffany & Co.