Retail

When Loyalty Is Unattended Retail’s Key Feature

vending machines

To help build customer loyalty, eCommerce and brick-and-mortar retailers have a myriad of tools on hand: Cashiers can sign customers up for loyalty cards at brick-and-mortar stores, and eCommerce sites can send customers special offers and coupons by email. While vending machines and unattended kiosks may not have been able to build similar relationships, that reality doesn’t have to last forever.

A kiosk equipped with a touchscreen can allow shoppers at the point of purchase to join a merchant’s loyalty program. At the same time, the PYMNTS Unattended Retail Tracker found that vending solutions can dispense products ranging from electronics to prescription medications. Even so, retailers must protect against theft and fraud without adding friction for employees and customers in the age of automation.

From Vengo Labs to Carvana, digital innovators in a variety of industries and spaces are reinventing the vending machine concepts with new technologies and features. These are just some of the ways that retailers and solutions providers are using vending machines to build customer loyalty — and help reduce friction when consumers shop: 

The compound annual growth rate (CAGR) of the global smart vending machine market from 2019 to 2024 is projected to be 12 percent. And technology in the space is continuously evolving from the days of large, imposing machines. Vengo’s machine, for instance, measures in at a little over two feet tall, slightly less than three feet wide and exactly six inches deep. The machine also has a 21-inch screen that allows consumers to interact. It can also take cards as well as near-field communication (NFC) contactless payments and is wall-mounted. “We love shrinking down, and bringing the design and technology a whole new flavor. That smaller size opens up whole new markets, and gains us access to spaces that have never had a retail experience a part of it,” Vengo Labs CEO and Co-Founder Brian Shimmerlik told PYMNTS.com in a January interview.

The approximate number of Illinois residents employed by the vending and convince services industry is 7,000. Luke Saunders, founder and CEO of Chicago’s Farmer’s Fridge, sought to design a service that didn’t require consumers to plan ahead to have a healthy meal — they could make an impulse purchase instead. His company makes fresh food and uses refrigerated trucks to send it to a network of automated refrigerators. Customers can use touchscreens on the fridges to make purchases, which allow them to view and add items as well as make payments via credit cards. They can also apply the purchases toward their loyalty accounts. When it comes to locations for his machines, Saunders said they can work in many different settings, from universities to airports. “Anywhere that we can find 12 square feet and [an] electrical connection,” he noted.

The expected CAGR of the global transportation ticket vending market from 2019 to 2024 is 3.9 percent. And ticketing technology for public transportation is arriving on mobile, too: Cubic Transportation Systems recently notched a contract from the National Transport Authority for a mobile ticketing system in Ireland. The system will reportedly be tested on regional routes of Bus Éireann later in 2019 and is based on technology the company has brought to other cities. The contract forms the first phase of a Next Generation Ticketing program and the primary focus of the contract is on bus transportation. And, closer to home, New Jersey Transit announced last year that it was planning to modernize its fare payment system via proposed upgrades that would reduce cash and paper-based tickets.

The projected value of the kiosk market’s food and beverage revenue by 2021 is $310 million. To place an order for one of Blendid’s smoothies made by a robot, for instance, diners can use a tablet at a kiosk or a mobile app. The company’s technology was recently deployed at the University of San Francisco (USF), and Blendid Co-Founder Vipin Jain sees it coming to food service environments like company and college cafeterias in addition to airports, supermarkets and health clubs — in essence, public places where people go and expect food. The company offers blends such as Tropical Twist (mango, banana, coconut water) and the Green Warrior (kale, banana, blueberry, apple juice, kefir, chia).

Europe’s 2017 share of the coin-operated vending machine production market is 30.3 percent. And, in the U.S., innovators have a new take on “coins” when it comes to vending machines. With Carvana’s vending machines, shoppers who make a purchase online arrive at the company’s car lot. They then receive a three-inch branded coin from a staff member and put it into the company’s car vending machine. They then see their car slowly lowered and released to them. A quick response (QR) code might do the trick just as well as a coin, but Carvana Co-Founder and Chief Brand Officer Ryan Keeton explained in a 2017 PYMNTS interview that he sticks by the metal disc for its tactility and the visceral, evocative quality of traditional vending machines.

From Carvana to Farmer’s Fridge, eCommerce companies are making it easier for consumers complete vending machine purchases — and building loyalty at the same time. All the while, new technologies provide the promise of remote sales and inventory tracking to help mitigate some of the security challenges of unattended retail that come with opportunity in the space.

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Featured PYMNTS Study:

More than 63 percent of merchant service providers (MSPs) want to overhaul their core payment processing systems so they can up their value-added services (VAS) game. It’s tough, though, since many of these systems date back to the pre-digital era. In the January 2020 Optimizing Merchant Services Playbook, PYMNTS unpacks what 200 MSPs say is key to delivering the VAS agenda that is critical to their success.

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