No Storefront? No Problem: Future Retail May Be Unattended

If only shopping weren’t so … shoppy. Sure, eCommerce takes away a lot of the hassle, but sometimes you need that last-minute pair of sunglasses or gloves, and ordering them online just isn’t an option. At least, not until Amazon invests in some beam-me-up magic.

Say you just got off an airplane, and the weather is much colder than you expected. You’re traveling, and didn’t pack anything warmer. In a pinch, there’s always the nearest souvenir shop, but do you really want to pay a premium for a cheap, tacky Big Apple sweatshirt that will most likely get worn today and donated to Goodwill tomorrow?

Wouldn’t it be nicer to stop at a kiosk on your way out of the airport to buy a branded sweater that will not only keep you warm today, but could even work its way into your wardrobe for future wear?

In fact, this scenario is already fully possible: Japanese clothing company Uniqlo saw the opportunity and seized it. Travelers in 10 U.S. cities can stop by one of the retailer’s airport or mall kiosks to pick up a lightweight down jacket or heat-retaining shirt.

Walmart has also introduced standalone kiosks, although the big box retailer’s version is more about supporting its curbside pickup service than about introducing on-the-go convenience via remote retail.

These moves are tremors of a much bigger retail earthquake, according to USA Technologies chairman and CEO Stephen Herbert. Merchants no longer need a storefront and/or website to sell their wares. They can do so remotely in highly strategized, self-service micro-retail locations.

“We’re starting to see the demise of foot traffic and interactions in a physical environment,” Herbert said in a recent interview with Karen Webster. “Unattended retail is going to go through a dramatic change.”

Uniqlo is just the beginning, if you ask Herbert. He envisions an enterprise platform for anyone who wants to run a retail business remotely, enabling those entrepreneurs to simply plug and play, with logistics such as payments, loyalty programs, interactive advertising and location-based offers all handled by the platform.

That’s why USA Technologies, which focuses on cashless mobile enablement, has acquired Cantaloupe Systems, which focuses on inventory management and logistics. Together, they hope to push unattended retail into its next evolutionary form.

Better Together

In a nutshell, USA Technologies powers cashless and mobile transactions in self-service retail settings and tracks acceptance of different payment methods (one of which is still cash, if you’re into the whole digging-for-quarters thing).

The company also helps remote retailers integrate consumer engagement and loyalty programs, having tied the loyalty program more. into Apple Pay as the industry was first warming up.

Meanwhile, Cantaloupe provides cloud and mobile solutions for vending, micro markets and office coffee service. It has a robust customer base in the U.S., Canada, Australia and South America, which will contribute to the expansion of USA Technologies’ footprint into new countries and markets.

Together, Herbert said, the partners can deliver precisely the turnkey enterprise platform he envisioned. The companies expect to see decreased operational costs, increased sales and the ability for customers to run their business in a more efficient and competitive fashion.

“We were focused on things ‘above the line’ – cash that would drive the top line for operators,” Herbert said. “But we were also collecting data below the line about the way they run their business. Now, we can put the two together to help our customers run their business, from the accounting function to making the warehouse operations and delivery drivers more efficient, and helping manage space-to-sales. In retail, it’s all about profitability per square inch.”

USA Technologies will also unlock new capabilities through Cantaloupe’s Seed Cloud offering. Seed Cloud includes cloud and mobile solutions for dynamic route scheduling, automated pre-kitting, responsive merchandising, inventory management, warehouse and accounting management and, of course, cashless vending.

In a press release, Cantaloupe co-founder and CEO Mandeep Arora said the company looks forward to driving mainstream adoption of its technology and executing its product vision through the partnership.

“Together, we will ensure the industry continues to modernize,” Arora said.

The deal is expected to close by the end of this week. USA Technologies put a total of $85 million into the deal: $65 million in cash and $20 million in stock.

The Unfurling Vision

Despite providing adjacent services, there is little overlap in the companies’ existing customer bases, said Herbert. He estimates that the combined total of shared customers sits somewhere around the 850,000 mark, with potential to reach one million by the end of the fiscal year.

Each company is growing at around 20 percent per year, he added, so they will be compounding their momentum. Herbert attributes the rapid growth to the changing times.

“Brick-and-mortar retailers continue to struggle with how technology is changing the retail landscape, shifting consumer demands and expectations,” USA Technologies wrote in a recent blog post. “Consumers want faster, easier, customized and convenient retail experiences.”

That, the company said, puts it at a unique advantage – especially now that it has acquired Cantaloupe Systems to help provide goods and services that align with customers’ preferences and convenience-driven payment methods.

Well before contactless payments made this dramatic change possible, the vending machine business seemed like it had already arrived – indeed, as if it had been born mature 160 years ago when the first unattended kiosks cropped up, selling postcards in London or gum in New York.

Now, says Herbert, there’s plenty of room to grow, and he intends for USA Technologies and Cantaloupe to be at the forefront.



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