Last-Mile Delivery Firm Tortoise Turns to Mobile Vending Machines

With the quick rise in self-service adoption seen in the past couple of years, consumers increasingly seek out purchasing options that put them in the driver’s seat. Concurrently, with today’s labor challenges, restaurants and grocers are struggling to staff their stores and as such are eager to adopt solutions that reduce their labor needs.

Against this backdrop, Tortoise, a company that has historically focused on providing robotic solutions for last-mile delivery for grocery and general retail, is turning its focus to providing automated mobile shops that function somewhat like roving vending machines. On Friday (March 4), the company officially announced the launch of its Mobile Smart Stores.

“We kept seeing this funny thing happen in all of our deployments, which was, when a robot was parked at a store or on a corner waiting across the road, people would walk up to them and start talking to the robot and expect to be able to interact with it,” Tortoise CEO Dmitry Shevelenko told PYMNTS in an interview. “When we surveyed them afterwards, what those people all said was, ‘Oh, we thought we could buy something from the robot,’ and as is often the case, your customers are a lot wiser than you are.”

He explained that, in response to these expectations, Tortoise began testing the model. The company installed NFC readers in the top of locked containers, allowing consumers to tap to pay. Doing so unsealed the container, letting the customer take their item. The whole process was overseen by a remote monitor.

The launch comes with 18 food and convenience retail customers already signed on, including virtual kitchen companies Reef and Nextbite and United Kingdom’s ultrafast grocer Jiffy. In the months ahead, these Smart Stores will launch in a wide range of areas: New York City, Los Angeles, Chicago, Denver, Dallas, San Diego and London, among others.

Invisible Checkout

Shevelenko argued that part of the appeal for consumers is the “kind of magical checkout experience,” whereby consumers pay for their items “without a screen, an app, a website, a QR code needed.”

Each container holds one SKU with the price listed on the outside, such that consumers may purchase from one that advertises “2 cookies for $7” or “Turkey Sandwich w/ Homemade Chips $10.” So far, early trials have focused on relatively unknown brands, and even without this name recognition, Shevelenko said, consumer interest has been promising.

“The wild thing is, it only takes 15 seconds, and people are buying $35+ items from a robot,” he said.

Contactless payment options are a huge draw for today’s consumers. Contactless payments now account for half of all in-person transactions globally, an increase from the previous ratio of one in three transactions, according to Mastercard.

Read more: Mastercard: Contactless Payments Now 50% of Global in-Person Transactions

Additionally, consumers are accustomed to using these payment methods for food and essentials purchases. According to data from a survey highlighted in PYMNTS’ “The Anatomy Of A Consumer Payment” playbook, created in collaboration with FIS, contactless payments now account for approximately 80% of in-person grocery and pharmacy transactions.

See also: Anatomy Of A Consumer Payment: David’s Bridal Marries Security And Omnichannel Payments To Build Consumer Trust

Breaking It Down

In a move to lower the barrier of entry for merchant adoption, the company is not charging upfront. Instead, it is taking a 10% cut of gross sales, with Tortoise providing the technology and the remote oversight. In initial tests, these stores have brought in $80-$100 per hour, which, Tortoise said, is 25 times higher than the average hourly earnings of a traditional vending machine.

“Unlike what we were doing in delivery, here we’re focused on growing the top line rather than trying to make a case around the cost savings,” Shevelenko said.

These stores are not the first mobile, robotic shops. Santa Monica, California-based “store-hailing service” Robomart, for one, has been making the rounds of West Hollywood and Central Hollywood, with consumers requesting the mobile snack shop as they would an Uber or a Lyft.

Related news: Robomart Combats Basket Fatigue by Bringing the Convenience Store to Consumer’s Door

However, Shevelenko argues that Tortoise’s Smart Stores are nonetheless the first of their kind, given that the merchant, rather than the consumer, decides where the mobile unit goes.

“Robomart is really still a delivery solution. … You request it, and it comes to you,” he said. “[But] if you go to the end of Google, and you can’t find something that exists that’s a mobile vending machine.”

One and Done

The value for merchants is clear: it enables them to sell more items in new geographic areas at times when the store is closed, all without deploying additional human labor.

For consumers, Shevelenko believes that the main value of the model lies in the ease of purchase.

“The history of commerce is making payments more and more frictionless. We’ve taken a big evolutionary step here by having …a dedicated mapping of one NFC reader to one product SKU,” Shevelenko contended. “When you have it set up that way, you enable this completely frictionless checkout.”