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COVID-19 has progressively spread on a global scale since the initial announcement of its existence in December 2019. As governments put measures in place, such as social distancing and the discouraging of commuting in crowded places, there is a need for a replacement for conventional businesses to run. There has been a growing usage of vending machines to provide goods to consumers, and it has been apparent that it is a culture to stay.The proliferation of Vending Machines
Japan has had a strong vending machine culture, with 5.5 million spread across the country, or practically having a single machine serving 23 people - the highest ratio globally. Vending machines have traditionally served hot and cold beverages, with some serving food and others stretching to various goods, such as electronics, cigarettes, and contraceptives even. The benefit of having vending machines spread across even rural regions act as a solace to consumers, as they can purchase their goods from the vending machine at any time.
Vending machines serving hot and cold beverages in cans or bottles are common around the world, but there has seen a need for further diversification in their usage and dispensation. For example, to debunk the idea that imported salmon is expensive and exclusive, Norwegian Salmon founder Manish Kumar employed the use of smart vending machines to bring deep-frozen salmon to the mass market, placing these machines in shopping malls and condominiums across Singapore. One way the smart machine is utilized is by reporting a fault to the team automatically, as well as communicating to the team when inventory has fallen below 30 percent, allowing the team to swiftly respond for maintenance or restocking.
The Reason for the Shift
The draw of vending machines come in many aspects. First is the usage of cashless payments, reducing the hassle of dealing with cash, and with that, the certainty of prices of what a consumer is paying for. Cashless payments are also appealing due to the added payment security. Payment options such as through cards, mobile applications also assist in easing the change to purchasing via vending machines.
For business owners, the attraction of shifting to vending machines increases with the rise in rental rates in developed countries. An example of a local company, Shake Salad, provides fresh salads, with their sales purely via vending machines. There is a diversity in options, not just from the intended purchase, but also with add-ons and additional choices. It is also a lot less hassle to run, as the machine does require maintenance and restocking of inventory, but need not require staffing or supervision, especially in a low-crime country such as Singapore. Employee management is minimal, and besides initial hiccups such as technical glitches, the machines are in high demand. Personally, I have witnessed their salads being sold out from their machine in the Central Business District on a weekly basis.
The Market
The intelligent vending machine market is expected to reach approximately USD$26.8b by 2024, with a compound annual growth rate of 28.2% from 2019 to 2024. The main reason behind the growth of this market is due to the increase of adoption of the machine to enhance consumer experience and, from the vendors’ perspective, the rising demand for advanced vending machines with transaction and inventory management, leading to a decrease in involvement requirement for machine owners, and the added functionality to include digital advertising features.
One entity seen to be aggressively doing this is V-MORE, an e-commerce platform that has rolled out smart, IoT-enabled barista coffee machines, with plans to spread across Southeast Asia with funds garnered from its Series A funding. The key to using IoT-enabled smart machines is to provide analytic information on online and offline consumer behaviors, which is valuable in redefining the experience of retail.
The overall growth of vending machines can be easily attributed to the development of technology at a rapid pace. Consumers have become accustomed to utilizing their smartphones for practically anything, from browsing the internet to making online purchases, and even to replace physical credit cards to a virtual one. Security has been increased from PINs to fingerprint and facial recognition to decrease the chances of fraudulent usage. Coupled with these, smart vending machines continually attract consumer adoption and sales, with big players, such as Coca-Cola and Pepsi, also wanting part of the pie. Smart vending machines can only be here to stay, and not as a passing fad, but as a replacement to substitute traditional retail and provisions for food and beverages.
Teja Lim (Mr)
Pinnacle Creative Agency
Contact Info:
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Organization: Pinnacle Creative Agency
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