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Issue Date: Vol. 52, No. 12, December 2012, Posted On: 1/2/2013


Interactivity Strengthens Engagement: Intel Sees Bright Future For PC-Controlled Vending


by Emily Jed and Tim Sanford
TAGS: Intel, Raj Maini, Intel-powered vending, vending machine,vending technology, cloud-based Active Management Technology, intelligent vending machine, David Perlmutter, photo booth, touchscreen vending machine, microprocessor-controlled vending machine, automated retailing, cashless vending, photo booth, Kraft Digitouch, Pepsi vending machine, Coke vending machine


From one perspective, the history of vending technology tracks the evolution of the vending machine's "intelligence." The control logic of the simplest vending machines was mechanical, distributed throughout the machine, and designed to recognize the presence of a coin and respond by freeing an escapement to enable the customer to pull a knob or turn a crank that would release the product.

As technology grew more sophisticated, it became possible to design mechanical coin discriminators that could recognize several denominations of coin and total their value, and then electrical ones, also able to do all that and dispense change, too. Operators wanted these things done so they would not lose sales: allowing patrons to make a 25¢ purchase with five nickels, or two dimes and a nickel, made the machine accessible to someone whose pocket change did not include a quarter.

The intelligence continued to grow, and remained concentrated in the payment system. The last generation of electromechanical venders could accommodate a multiprice system able to support a bill validator and a change dispenser. The vending machine itself needed only to respond to an electrical output from the payment apparatus when enough money had been inserted. Pricing-and-credit systems like that could be (and were) equipped to capture a subset of DEX transaction data, while the machines remained dumb.

Kraft Digitouch


Photo | GET SMART: Kraft Foods and Intel collaborated for two years to develop the Diji-Taste vending machine, which began as a high-tech approach to product sampling. It engages consumers with full-length LCD touchscreens on three sides of the machine. Facial recognition technology and social networking functions center the experience around the consumer.


That changed with the advent of microcontrollers, simplified microprocessors programmable to perform a defined range of functions. These moved the intelligence back into the machine, making the payment system a peripheral that sent information to the vender's control board and received information in return. Data capture and retrieval capability moved onto the control board too, allowing the vender to track sales by column or spiral, as well as recording payments.

Now Intel, which developed the first general-purpose microprocessor in 1974, is seeking to take this evolution to another level by equipping vending machines with controller boards based on powerful microprocessors designed for personal computers, able to run applications that can do much more than determine the value of money inserted and detect the customer's product selection. Computers assembled into wide-area networks and controlled through the Internet "cloud" can interact with the public in a number of ways, attracting interest, engaging customers with an array of video graphics and features that enable personalized service, and easily accommodating the ever-growing spectrum of payment options. Intel conducted a seminar at this year's National Automatic Merchandising Association OneShow to provide an overview of this "intelligent vending" concept.

Intel, Raj-Maini VT recently spoke with Raj Maini, Intel's worldwide director of visual retailing and digital signage, about intelligent vending and its role in furthering the movement of vending into the retailing mainstream. Intel is powering several of vending's high-tech machine innovations, and Maini emphasized that the company plans to be a driving force in accelerating the widespread adoption of "intelligent" machines to help operators, equipment manufacturers and product suppliers tap the full potential of today's robotic retailers.

The chipmaker believes that its open-architecture, platform-level solution will help impel the shift, already well under way, from vending machines as dedicated product delivery devices to intelligent, stand-alone systems that will ultimately attract more customers, sell more product and generate a new revenue stream from advertising.

Maini described "intelligent vending machines" as those with dynamic digital displays and interactive touchscreen controls. "The touch-based interface lets consumers select merchandise easily," he told VT. "They can interact with the machine directly or through their smartphones for wide-ranging applications, like getting a mobile coupon that they can use to make a purchase now or later."

Intelligent venders also leverage gesture and facial-recognition technology to detect and respond to individual customers, thus creating a fuller, more engaging shopping experience, Maini continued. They are wirelessly connected for seamless remote management and inventory control.

"The operator can remotely change pricing in real time based on what's selling, and get anonymous data on who's in front of the machine," Maini explained; "and the remote machine management capability for all these functions is built in."

Enabling and simplifying this remote machine management is vPro technology, built into the latest third-generation Intel microprocessors. VPro processors include Intel's embedded, cloud-based Active Management Technology, which establishes a secure connection and facilitates comprehensive remote control. This enables operators to read machine inventory, gauge consumer demand and diagnose machine malfunctions.

"All the capabilities and data from these technologies give the vending operator greater operational efficiency by better managing the machine and better understanding what is being bought," said Maini. "It also gives brand marketers the opportunity to conduct targeted, personalized campaigns, which gives the operator a new revenue source."

The intelligent vender is an excellent advertising medium, the Intel executive pointed out. Vending machines are attractions, by their nature, and they tend to be located where people congregate. They are designed with large display areas that can accommodate large flatscreen monitors; and intelligent vending machines are online, so new advertisements can be initiated remotely. This decreases deployment time substantially.

All of these capabilities, from touchscreen displays to remote machine monitoring, are available to the industry from numerous suppliers, and a growing number of operators are using them. What's unique about Intel's vision is that it wants to take the lead in moving from machines with a variety of peripherals, arranged around a dedicated industrial controller but incorporating their own electronic logic, to a cost-effective, all-in-one microcomputer that drives not only the product -dispensing function but also the payment system, signage, temperature control (if present), adjacent satellite dispensers and so on, as well as the communication functions.

Intel's third-generation Core processors with enhanced media-processing capability represent a powerful and flexible control module which increases flexibility in pricing, display, communication with customers and advertising.

"We suggest one microcomputer to do it all with built-in technologies," said Maini. "Processor-based chipsets can make it cost-effective, with the highest power."

Intel, David Perlmutter An example of this technology applied to automatic retailing is Coca-Cola's Intelligent Vending Machine, which is powered by a second-generation Intel Core processor. Its dynamic touchscreen display makes purchasing a bottle of Coca-Cola a fun, interactive activity by incorporating games and applications, including social media integration. It also "knows" the gender and approximate age of each customer, through its facial recognition system, and it predicts the type of drink that patron is likely to prefer.

Also powered by Intel is PepsiCo's Interactive Vending Machine, which the beverage giant is piloting in five malls. It allows patrons to purchase a drink or gift one to a friend by entering their name and email, along with a personalized message. Consumers can also play an onscreen game for a chance to win a free beverage that can be redeemed immediately or at a later date from any Pepsi interactive vender. The machines display nutritional information, TV commercials and other content.


Photo | INSIDE THE BOX: Intel chief product officer David Perlmutter demonstrates how Coke’s intelligent vender creates a powerful platform for interactive marketing at a recent developer forum in San Francisco. The next-generation Coca-Cola vender represents new style of intelligent machines. Equipped with an Intel Core i7 processor, the machine has a 46" interactive touchscreen, a QR code reader and WiFi capabilities. It also has an onboard camera. After purchasin a Coca-Cola drink of choice, a patron can pose for a picture and email it.


ATTENTION-GRABBER
Maini said touchscreens plus facial recognition and gestural controls transform a vending machine with a static front from a passive product-delivery device into an interactive consumer interface that also provides a platform for third-party advertising. In addition to attracting and engaging more patrons, vending operators and product suppliers can leverage facial and gesture recognition technologies to gain real-time insight into what is being bought and by whom, allowing operators to tailor machine menus and marketing messages to each patron.

Pepsi Vending Machine "Consumers are used to interacting with screens; they don't want to stare at static information," said Maini. "The change from a 'dumb' machine to an intelligent one is just around the corner as we bring the digital signage world to the vending endpoint.


Photo | SEEING IS BELIEVING: Intel technology drives Pepsi’s interactive vending machine with full-motion 1080-pixel display.


"There's a fairly large installed base of 15 to 20 million vending machines worldwide, but existing vending machines are not intelligent enough," the Intel executive continued. "If a machine has a touchscreen interface that also displays advertising and collects data, it just makes sense that everything be integrated into one system that does it all; one function alone is not enough in today's world."

He emphasized that brands increasingly seek to improve their penetration of the consumer space, to win or strengthen customer loyalty and drive purchases. And they're taking a new look at vending for its ability to accommodate digital signage, allowing them to dynamically advertise product at the point of sale and benefit from real-time information about purchase behavior. Ads on vending machines also can help to build a platform for multichannel advertising impact extending from home to workplace and the point of sale.

"If you can make a vending machine intelligent, you not only display real-time brand messages, but you gather market intelligence through interactions by detecting demographics, which contributes to a more effective campaign," Maini pointed out. "And you facilitate a way for the consumer to make the next purchase with coupons and promotions.

"Vending machines are real estate that operators already own, and they can easily benefit from third-party advertising capability," he observed. "If you advertise and share some revenue, you also get to use the vending machine to increase 'share of wallet' through digital signage that's on the screen when no one is interacting."

Intel has built several technologies into its microprocessors that enable vending machines to play an active role in promoting products to prospective customers at the point of sale. The chipmaker's Audience Impression Metric (AIM) Suite works in conjunction with digital displays to sense viewer responsiveness and anonymously determine gender and age group, then change the graphic display to target the message to the perceived patron demographic.

The recognition technology can determine whether the consumer is male or female and adult or child, using a technology called Anonymous Viewer Analytics (AVA). Small optical sensors connected to the digital sign relay a video stream to the Intel processor. Intel's AIM Suite software extracts information from the video images and employs face-detection algorithms to aggregate data on how many people looked at the signage, how long they watched, and their demographic characteristics.

Detailed sales analytics help the operator gauge interest level, compare message selection to sales performance, and dynamically change the advertising mix according to the audience demographics.

Vending machines can dispense coupons tailored to each purchaser. Machines also can scan QR codes displayed on the patron's phone to issue a reward or provide a discount.

Intel's AIM Suite also is employed in Kraft Foods' high-tech touchscreen Jell-O Diji-Taste vending machine, currently deployed in select markets in New York and Chicago. It uses facial-recognition technology to dispense samples of Temptations by Jell-O to adults, the targeted demographic for the indulgent dessert.

"Intel's computing power runs real-time analytic capability," Maini explained. "Now you not only know that a person approached a machine, but you have a time stamp of a particular person in terms of age and gender. If they make a credit card transaction, it has the same time stamp, so you know they made the purchase; and if they use their smartphones, you know that they clicked. It completes the loop so you know how many people came to the machine, how many completed the transaction and how many walked away."

CRASH-FREE AND SECURE
The reliance on a disk operating system presents a risk of onsite crashes, but the chipmaker's third-generation microprocessors enable remote diagnostic and restart capabilities. Its Active Management Technology also makes it possible to query, restore, upgrade and protect devices remotely, even when they are not functioning, powered off or experiencing software failures.

The Intel executive explained that the AMT system instantaneously detects when a computer crashes, with an alarm sent by the computer to its control center. "It knows what went wrong, finds the problem and reboots almost automatically," he told VT. "A predefined response system is built in. It enables the same capabilities of rebooting remotely, without the need to touch the vending machine."

Intel has also addressed the security challenges that wireless applications present in vending by partnering with McAfee, whose robust security solution is built into its third-generation microcomputers.

"Security is paramount in vending; it's like a point-of-sale terminal with payment and advertising," said Maini. "If anything is compromised, from payment information to advertising content, the operator is vulnerable. The system is secured from end to end; all data sent through the cloud is encrypted and secured throughout the transaction."

SKY'S THE LIMIT
Maini predicted that future applications and enhancements to Intel's vision of "intelligent vending" are virtually limitless, thanks to the flexibility and capability of PC-based technology. "It's the same microcomputer; it just has to be programmed to do what's needed to make the service better," he said.

Among the new applications that Intel has in the works are pattern-recognition technologies and scanners that can read a barcode or imprintable RFID transponder affixed to product packages that could allow a machine to inventory itself, ensuring that the right items are stocked in the right slots and actually dispensed to the patron. "If the wrong product is in a spiral, it can be identified and send a real-time alert so the driver can correct the machine inventory," Maini explained. "Intel's solution would provide the flexibility, through the sensors and the computing elements, to work with any model, whether it's UPC or RFID."

He reported that manufacturers have been pushing to implement RFID technology to track products across the supply chain at retail. "Early pilot work is happening," Maini explained. "If it takes hold at retail, the move into vending will happen, and vending will not have to reinvent the wheel. Economy of scale will help the industry adopt it. It's not a technology question for us; we have a robust, cost-effective way to implement technology like RFID scanners in vending."

Despite the many new applications and advances that lie ahead, one thing Maini said he does not foresee is that vender intelligence will move into the cloud, rather than continuing to reside in each machine.

"The machine needs to be intelligent, with a local telemeter, to interact with the consumer and do things like dispensing coupons to the right target and providing dynamic messaging or advertising," he explained. "The vending machine will continue to collect, store and periodically send data into the cloud for the operator to access, whether it's once a week or once a day. We need to make venders more intelligent so we can customize them, machine by machine, which can't happen if the vender becomes dumb again and all the intelligence is in the cloud."


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