Intelligent vending machines would eventually replace the traditional methods of transactions. Vending machine industry has always been a customer oriented industry, which offered variety of food & beverage options at economic prices. Technology used in the industry has evolved significantly over the years, from coin-operated vending machine i.e. dumb terminals to cashless vending machines, fingerprint scanners, touch screens, iris scanners etc. Smart and connected devices have led the industry to grow at a rapid pace.
This digital technology has ability to access customer information generated by all connected devices, in real-time. This has led the market players to strategically design their revenue model and earn profits out of it. The machine to machine (M2M) connectivity would enable market players to offer differentiated products and services to their customers. Therefore, intelligent vending machines are a classic example of the impact of "Internet of Things" (IoT) on companies’ revenue streams and business models. A study by Intel Corporation on Intelligent vending machines market in April 2016, projected the global intelligent vending machines installation base to reach nearly 3 million units by 2020. Presently, the United States and United Kingdom have deployed more than 2000 freestyle machines and the number is anticipated to increase in the near future. Globally, The United States of America (U.S.) leads in the number of intelligent vending machine deployment units owing to availability of secure and user friendly cashless payment system options across the retail and other domains.
Intelligent vending machines: Recent Developments
In a recent new article, it was stated that Technology giants such as Intel Corporation and SAP are developing a new range of platforms for wireless and wired machines. SAP’s Smart Vending solution - based on SAP HANA real-time data platform – has been designed to provide opportunity to engage their customers by accessing real-time management dashboards and visualization tools. This also displays timely sales details and maintenance information across the entire network at each point of sale (PoS).
Intel’s new design for intelligent vending machine has provided an easiest way to retrofit traditional vending machines to Internet-connected machines. Various market players can take advantage of the new business opportunities, cloud services, and data analytics platform through a suite of related products and applications for product differentiation in the market. Various examples through which connected devices would enhance the economic returns with improved profitability and increased revenue streams are listed below
- Digital Content Delivery
- Smart payments
- Social Commerce
- Inventory management
- Maintenance and Energy Savings
Intelligent vending machines: Driving Customers Towards Better Choices
Further, healthy choices by consumers, cashless vending machines, placements of micro markets, and machine upgrades are the major trends witnessed among the consumers. Consumers today have realized the importance of good food and healthy eating habits in their daily lives. “Eat Healthy and Stay fit” mantra motivates consumers to take fresh and healthy diet. The demand has enabled the suppliers to innovate and fulfill consumer needs. Today, machines not only dispense cookies, candies, sugary beverages and packed food items, but also provide variety of healthy food options such as fresh fruits, vegetables, juices and lot more. The Hartman Group, a global research company in food and beverage industry, recently published a snacking report, which stated 57% of Americans rated having healthy snack options as important or very important. Also, a research report by Symphony IRI Group in 2015 highlights 87% of consumers are trying to eat healthier.
USA Technologies Inc. (USAT) a renowned cashless and mobile payments technology provider conducted a study for almost six months, testing the targeted PoS advertising of Apple Pay, across more than 35 vending machines located in Louisiana and New York. The results show a steady growth in the usage of mobile payments. USAT concluded stating, smartphone users are shown digital advertising at PoS through ePort Interactive platforms. Study results highlighted 44.6% increase in total mobile transactions, 36.5% of increase in overall sales, 135.2% increase in overall mobile payment usage and 55.5% increase in revenue through contactless purchases.
Additionally, youngsters today are not very fond of cash transactions, instead prefer digital transactions wherever possible. Anant Agrawal, a co-founder and chief marketing officer of Cantaloupe Systems stated that “Cashless payments must become the norm for vending moving forward”. With the increased pricing & changing demographics, vendors in the market are expected to understand the market need and launch required products in the market. These are some of the driving factors for the intelligent vending machine industry. Governments across various countries have banned these vending machines in public areas such as schools, colleges, and public transport stations due to availability of packed foods, which is not good for health, and it is positioned as a huge challenge for the market players. Detailed list of drivers and challenges in the industry are highlighted below.
Figure: Market Driving factors and Challenges
Though the industry has various challenges ahead, it is expected to grow at a rapid pace. Scott Guardino, vice president and general manager of Paramount Companies, a coffee service provider, stated in an interview that they have anticipated the industry to grow 25% in the near future. This would also provide opportunities for market players to expand their businesses across various geographies and come with new product offerings to the customers.
Intelligent vending machines: US The Leading Region
Geographically, The United States leads in installed base of intelligent vending machines. These machines would be convenient, economic and would be available 24*7 for the customers’ use. Forecasts also state that Asia Pacific is the most lucrative region in the years ahead, owing to increased disposable income, and rapid rise in the number of middle class population.
Figure: Breakdown of Middle Class Population
Intelligent vending machines: The Market Forecast
The technology enhancements in the industry exhibits enormous growth of Intelligent Vending machines across all the geographies. “The Research Report” have deeply studied all the parameters in the industry and forecast the market to reach $15.4 billion by 2023.
Reports of Intelligent Vending Machine Market: