When we think of upscale retail, we envision fancy stores in high-rent locations, staffed with elegant sales associates offering pampered personal assistance. It might surprise you to learn that a new frontier for upscale retail is emerging, and it’s called a vending machine.
We’re used to getting certain kinds of things from a vending machine. Soda, candy, snacks and chips are most common. But that’s about to change. Today, customers can purchase just about any upscale item they desire--including cosmetics, electronics, designer clothes, and even a car—from a vending machine.
I call it “automated upscale retail.” The very concept of selling expensive luxury items in vending machines is counter-intuitive. Yes, exactly! Experts predict that these new vending concepts will do for retail what ATM machines did for banking.
Here are the facts:
• The US currently has over 400,000 self-serve kiosks
• Over $60B is spent in vending machines across the US each year
• Revenues for vending operators are expected to reach $11.3B this year
• In the US, the self-service economy is set to reach $1.2 trillion in 2012
Now, here are some mind-blowing applications:
ZoomSystems offer consumers the opportunity to purchase high-end brands such as Apple and Sephora at over 1,000 locations across the US and Japan. The revenue that can be achieved via these vending machines is very impressive. While mall stores produce about $330/a square foot a year, a ZoomShop can generate up to $10,000 a square foot a year. Airports are prime targets. One Apple iPod vending machine in Hartsfield-Jackson International Airport makes $55,000 a month!
Best Buy caters to the business traveler with vending machines in airports across the country selling computer and cell phone accessories. Bath and Bodywork’s popular products are offered in places across the US where they don’t operate retail stores. Stylus reports that "the entrepreneurial brand Rollasole is supplying nightclubs with machines that sell rolled-up, flat, ballet-style pumps for women who’ve been dancing all night in painful high heels.” A company called U’Tique has created an interactive luxury vending machine that dispenses high-end and niche labels like Frederic Fekkai and Lancome in nightclub lounges, upscale gym locker rooms, and premium shopping malls. Wine retailers in Pennsylvania are experimenting with vending machines that dispense bottles of wine, and UK based Sainsbury is trialing one for National Health Service prescriptions.
Hotels are hopping on the trend quickly. The Standard Hotel in LA has partnered with Quicksilver to provide a vending machine poolside that dispenses board shorts and bikinis. The Hudson Hotel in NY introduced a new vending machine in their lobby (available to guests day and night) stocked with travel necessities as well as designer accessories and fine jewelry. The Mondrian Hotel in South Beach has a vending machine that dispenses everything from Gaultier designer dresses to Bentley cars. (The description dares the customer to tell their friends they bought their $1.2M Bentley Arnage convertible from a vending machine!)
Manufacturers have been aware for some time that helping consumers serve themselves is big business. Changing consumer preferences about shopping and the high cost of operating brick-and-mortar stores are inspiring premium brands to rethink how they sell their wares. Technology also plays a big part in this retail revolution as interactive touch screens allow the consumer to learn more about the product before purchasing.
Automated upscale retail is a paradox that requires a reframe around the notion of what a vending machine is and what service looks like. The concept is shockingly new, yet reassuringly ordinary. Experts are betting the idea will continue to grow, providing retail on demand for the savvy, information hungry, and time-strapped consumer.
Ready, set, insert credit card!
ZoomSystems iPod vending machine
Hudson Hotel luxury vending machine