Unattended Retail

Retailers Think Outside the (Jewelry) Box

Who said vending machines were good for just low-dollar candy and pop? Consumers think nothing of purchasing $1,600 luxury designer jewelry — from a vending machine in a park. In the August Unattended Retail Tracker, jewelry designer Marla Aaron explains what it takes to sell high-end jewelry through vending kiosks, and how it helps her skip sky-high NYC storefront rent prices and move her merchandise. Plus, the Tracker explores how vending machines around the world are shaking free of cash, and accepting mobile wallets and cryptocurrency to grow their reach.

An office worker likely finds it easy to rationalize putting $1.50 in coins into a vending machine in exchange for a Hershey’s candy bar. While that price pales compared to those of high-end jewelry items typically sold in New York City, a vending machine has become a key part of one jewelry seller’s strategy.

Marla Aaron, a jewelry designer with a company of the same name, has been selling her high-end products in a vending machine for nearly a year. Currently housed in a New York City park, it offers customers a range of items priced from $160 to $1,600.

The machine’s value goes beyond merely dispensing products. It’s not just a new way to make Aaron’s jewelry available, but also a way to provide a more exciting purchasing experience.

“I look at the vending machine as principally an exceptional vehicle for branding and storytelling,” she said. “[It’s] maybe the best thing we’ve ever done.”

Aaron launched her venture in 2017 in the Brooklyn Museum, before moving the machine to a park outside the William Vale Hotel in Williamsburg this year. In a recent interview with PYMNTS, she explained what it takes to sell high-end jewelry in an unattended retail manner — and who’s buying it.

The jewelry box experience

Inspired by a trip to Japan and the plethora of unattended retail examples on its streets, Aaron sought to bring the same experience to New York with her own vending machine. Doing so meant she’d be able to introduce a physical retail presence in the city, while providing an advantage over the prohibitively expensive rent prices that had previously kept her from opening a staffed storefront.

The Marla Aaron vending machine became the first, and thus far only, physical retail location under Aaron’s control, with the rest of her sales made online or wholesale; she sells wholesale to approximately 40 brick-and-mortar shops worldwide.

Crafting the right experience was a critical element in launching her new venture. She wanted to use the unusual purchasing process to infuse a spirit of fun while also retaining a sense of luxury. As such, the machine dispenses each item in way that creates an elegant feel: in a specially designed suede pouch inside a linen-cardboard box, topped with a ribbon. There is also a touchscreen display with a video to help guide customers through the purchasing process.

While some newcomers do stumble across the machine and discover the brand that way, most purchases aren’t made by someone randomly strolling in the park. For the most part, Aaron said, vending customers are often well aware of the Marla Aaron brand from her Instagram or online store and are searching out the new experience.

“These are our customers who are seeking out the vending machine, and then posting pictures of themselves buying things from our vending machine on Instagram,” she said. “What I’m seeing right now is it’s a fun way for existing customers to engage … in a physical way.”

The current selection of items ranges from a $165 necklace featuring a sterling silver Babylock — a small version of Aaron’s distinctive carabineer-style pendants — hung on a silver chain, to a $1,588 piece that includes a 14-karat gold lock with twisted rope texture, strung on a silver chain. The $165 accessory was the hottest item when the vending machine was housed in the museum, but Aaron has since noticed an uptick in average sales on her online store. She  responded by stocking additional higher-priced items when she moved the vending machine to its current location, and the $644 golden Babylock on gold chains have taken the title of top seller.

Payments and security

Of course, $644 can’t be paid with pocket change, and the machines currently only accept credit card payment, though Aaron and her team are exploring Apple Pay acceptance in the future.

While credit cards do introduce the risk of getting hit by a high-value chargeback, such an issue has not yet occurred. Thus far, there have been no attempts to break into the machine, she added, and no issues with criminals camping out to rob customers of their luxury purchases. There are integrated security measures, though — a camera staff can view remotely from their smartphones, as well as the park’s own cameras — and Aaron has acknowledged that the venture requires relying on a certain level of faith.

“Of course, there are some bad actors, but they’re extremely few and far between,” she said. “You don’t want to ruin a good idea — like a vending machine of fine jewelry out in public — because of the potential for bad actors, when the majority, in my belief, are good actors.”

The business does support refunds, returns and exchanges if a person is not satisfied with his or her vended item — the customer must simply email the company and mail the item back.

Location, location, location

The vending machine has received regular traffic in its current location, but getting it set up was a struggle. Aaron envisioned it as an attraction that would be in demand, but quickly found that others did not share the perspective. Instead, they viewed her proposal with the same lens as an operation seeking to rent retail space in an airport.

“It was actually very difficult for New York real estate people to wrap their minds around how to charge someone for a vending machine,” she said. “Instead of looking at it like an amenity, people were looking  at it like, ‘How can I charge you?’”

The museum, the machine’s first location, considered it an exciting holiday attraction. The kiosk has since settled at the park, but that may not be the end of the road. Aaron plans to add additional machines in more locations, hinting that big changes are coming to both the offerings and approach, although she couldn’t reveal the full picture.

“This is really taking the form of an incubator for some fun ideas we have that we’d like to implement,”she said.

While candy may still be the vending machine king, luxury goods have begun joining the ranks and appear to be settling in to stay — and Aaron’s efforts will continue to see if unattended retail can give jewelry products a new way to shine.

 

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