The Vending Revolution

Vending machines are far more ancient than you might think, dating back to a 1st Century C.E. coin-operated holy water dispenser. But it wasn’t until the Industrial Revolution that vending machines finally came into prominence. In London, during the early 1800s, the first modern vending machines dispensed post cards. The first vending machines in the U.S. sold gum on New York City train platforms. Both slot and pinball machines were developed from these early vending devices.

While the mechanics of vending machines were refined and standardized and innovations such as “talking” vending machines were added in the 1970s, the underlying technology has remained essentially unchanged for decades.  An elaborate, failure-prone mechanical system dispensed small products, as well as change. An entire industry sprang up simply to keep these machines up and running. But at the right location, vending machines were and still are gold mines. So, while there was much room for innovation, there was also little incentive. The industry was stagnating, growing only by adding increasingly marginal locations.

That’s what’s called a “sweet spot” for innovation – an opportunity to disrupt an industry and grab a leadership position. While change doesn’t come easily, several new vending machines are making a compelling case. Machines that get to know the customer, systems with no moving parts, vending personalized product samples – all point to exciting times ahead for the industry and consumers.

Many of the machines that push the boundaries of vending are Intel AIM Suite enabled. They employ AIM Suite to personalize product offerings as well as the advertising displayed on built-in flat screens, in real-time. Consumers are often confused by too many choices and fail to complete any transaction. AIM Suite can be used to refine the options displayed to those most likely to appeal to the specific demographic group of the person or persons currently interacting with the machine.

AIM Suite also enables the vending industry to get to know its customers.  Marketers can now track the gender and age range of vending machine customers from first impression through purchase. An industry that previously had little more than product sold by location data, now has deeper customer information than television or print advertisers. AIM Suite enables marketers to intelligently optimize vending machine locations, on-screen advertising, and product assortment by location.

One of the worlds’ leading consumer brands, Kraft Foods, is leading the way with both new technology and new markets for vending. When Kraft launched their new Temptations line of snacks for adults only, they caused a world-wide buzz by dispensing samples from vending machines that automatically excluded young people. iSample employs AIM Suite to detect the gender and age range of customers, in real time, and dispense a sample from the Temptations line most likely to appeal to their demographic group based on pre-programmed preferences. Kraft has automated a previously costly and labor-intensive process. By launching anywhere – anytime product sampling, Kraft has created a whole new category for the vending industry.

While iSample employs traditional vending technology, updated with AIM Suite for sampling, VIGIX has transformed vending through simplification. While traditional machines are bulky, intricate and expensive to purchase and operate, the VIGIX vending kiosk has a no-moving-parts cartridge-based dispensing system that can be restocked by delivery services, such as UPS. An RFID reader in the kiosk scans the RFID tag in the product cartridge and unlocks the door to allow access to the depleted cartridge inside. The cartridge that comes out of the kiosk is put in the shipping box and then sent back.

Intel AIM Suite enables VIGIX to track the number of people who had an opportunity to see the kiosk’s 3-D capable screen, the number of people who interacted with the kiosk, their age range and gender, what they watched and for how long. By tracking impression to purchases within a closed system,

VIGIX clients gain a wealth of demographic and behavioral data that helps them calculate and improve ROI, optimize kiosk locations, and on-screen content. VIGIX has created the ideal platform for small product dispensing, product sampling and couponing – all in a two square-foot space.

In Japan, there are over 5.6 million vending machines; one for every 20 people. Japan is also known for the wide variety of products available from vending machines, dispensing nearly anything imaginable from live lobsters to soccer balls. So, when Intel wanted to showcase next-generation vending technology with built-in flat screens, they teamed up with Okaya Electronics, one of Japan’s largest vending machine manufacturers.

This new concept effectively combines a vending machine featuring the latest design, high-performance hardware based on Intel architecture, a large transparent display screen and high quality content to attract and hold the viewer’s attention. In place of the conventional large LCD screen, this model uses a transparent screen so that the products inside the vending machine and the digital screen can both be seen, at the same time.

AIM Suite enables this next-generation vending machine to calculate the gender and age range of people interacting with it. The system then serves up content most likely to appeal to the viewer’s demographic group. AIM Suite also provides the business intelligence needed to optimize product offerings, on-screen content and vending machine locations.

The vending revolution isn’t just coming, it’s here. Special purpose, streamlined, inexpensive, small footprint – on the one hand… sophisticated, interactive, engagement platforms – on the other hand. These next-generation machines will help the industry cut through the increasingly cluttered outdoor marketing environment. They’re both a disruptive force and a necessary one for industry growth. New technology, new formats, new markets, new customer insight – that’s why Intel is excited about the future of the vending industry.

Reprinted with permission from Intel Corporation. For more information on Intel’s digital signage offerings, click here.