Attending To Unattended Retail

Vending machines. They’ve come a quantum leap from the days when you’d plunk some change into the slot, watch the candy bar — or whatever you were hoping to buy to satisfy that impulse purchase itch — get stuck between the dispenser and the glass, shake the machine, risk death by flattening and eventually claim your slightly stale prize.

In an interview with PYMNTS’ Karen Webster, Mike Lawlor, chief services officer of USA Technologies, dove into the innovations that have marked the unattended retail space. Things have changed quite a bit, said Lawlor, with one major shift coming as the umbrella of products being offered has widened far beyond the scope of snacks and beverages.

More Than Just Cokes And Chips

Payment methods have also evolved and embraced new technology. The era of having “to rummage around for coins and dollar bills to make a purchase is long gone. Many of these machines are outfitted with electronic payments and not only the traditional debit and credit cards” but also alternative forms of payments, from Apple Pay to Samsung Pay, said Lawlor.

And unattended retail firms, said the executive, are also embracing the Internet of Things (commonly known as IoT) to connect wirelessly to central networks “to run their businesses more effectively,” he said, “to capture sales data, to manage inventory … and now, there are interactive point-of-sale displays, where consumers can walk up” and get information about everything from caloric content to ongoing promotions. Thus, there is the trend of “convergence between traditional retail and these new types of technology that is built around making the consumer experience a whole lot better … [The unattended retail experience] is changing and will continue to change.”

In one noticeable move, Webster noted that there have always been branded kiosks for vending machines (with Coca-Cola a flagship example of that). But now, there are branded kiosks that dispense consumer products beyond food and beverages — think of the Best Buy machines that you’ve seen in airports — and Webster noted that these retailing brands are “using this opportunity to have a self-serve environment anywhere there’s a lot of foot traffic and potentially consumers with an interest in buying what they have to sell.”

“Companies like Coke and Pepsi have recognized this for years,” added Lawlor. They want to make sure that their products are “at the fingertips” of consumers who are at work and conducting other activities for as many as 14, 15 or 16 hours a day. The same principle applies to the other retailers who want to broaden their presence to consumers, physically, to be where those people “work, play and transit.”

The entertainment industry also can get a boost from the convergence of technology and cashless payments, added Lawlor. The amusement industry, said Lawlor, has those same consumers who have been exposed to cashless vending, he said, and those firms in gaming have seen their sales go up by as much as 25–30 percent when cashless payments are employed beyond cash and coins.

Tackling a larger subject, the economics are attractive enough so that vending operators may be moved to do more with technology, with Lawlor concurring that there is a divide between the unattended retail operators that are embracing technology and those that are not. In addition to the 25 percent-plus increases to the top line that are seen with cashless initiatives, operating costs have come down significantly as well, by a roughly commensurate amount, he said.

Crossing The Tech Rubicon

The companies that have yet to embrace cashless payments may have a relatively simple process in terms of crossing that technological Rubicon for better consumer engagement and inventory management. Lawlor stated that his own firm, USA Technologies, provides wireless POS terminals, with the ability to retrofit to a vending machine or kiosk in a matter of minutes and with wireless networks helping to settle payments directly into bank accounts. Thus, there’s the doing away of the archaic process of lugging coins away from vending machines to be counted by the firm and eventually deposited into coffers.

None of this change in payments, away from coins and crumpled dollar bills, takes place without an attendant mind-shift change, stated Webster. The vending machine companies trace their genesis back across decades after all, and now, the era is one of slick-looking machines and cashless transactions, with levels of sophistication that would have been unimaginable way back when.

Lawlor stated that, as recently as seven or eight years ago, vending firms may have balked at card acceptance, but seeing more recently how consumers have adapted to and adopted cashless payments has led to more open consideration of both a greater array of payments options and products that are offered for sale. “Once the vending companies get by the initial change,” said Lawlor, “they embrace it because they see that’s the future, and if they don’t embrace it, then the downside is pretty significant.”

Looking out over the next five years, Lawlor posited that there are “certain trends that are taking place in that consumer ramp-up.” Mobile purchases is one on the consumer side, he said, and mobile marketing is among the “next big thing[s]” on the corporate side. Those two trends are in the process of layering on top of cashless unattended retail that will take the experience to the next level, said Lawlor. Another trend he offered: the “store-within-a-store” concept, wherein, at a big-box retailer, there is the ability to shop onsite at additional points of contact, without the checkout line (and in the case of, say, Redbox kiosks, even the ability to shop at multiple vendors in one location).

“We always keep an eye on the consumer,” said Lawlor. “Because the consumer will drive this. What we have to do is look at the consumer in terms of payments and their experience. But then, we have to make it easy” to implement technology across the vending operators and the kiosk operators and make the process intuitive enough so that it becomes part of daily business practice.