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Wider Horizons For Self-Service Retailing

Posted On: 9/27/2013

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TAGS: Vending Times, Vending Times editorial, vending industry, coin-op, vending machine, coin machine business, office coffee service, Alicia Lavay, micro market, retail trends, virtual mall

Alicia Lavay

We have always published Vending Times with the goal of encouraging an exchange of ideas among the diverse segments of the industry. Operators always are on the lookout for opportunities, and the mix of services provided by many operating companies today is different from the menu they offered a few years ago. While a few manufacturers and suppliers have told me that they'd prefer a magazine focused on one segment only -- coffee or food or games -- the reality is that an operator who is not offering one of these services today may well offer it tomorrow (and vice versa). And few operators of automated points of sale (or points of play) provide only one kind. Locations ask for this and that, new concepts come along, and operators add and subtract in order to address shifts in consumer preference and changes in the market.

I've just received an inquiry from a supplier of stickers and temporary tattoos for flat vending. He had read an article in the August issue of VT about micromarkets, and wondered whether there might be an opportunity for flat (and bulk) merchandise in this new retailing medium.

For the past several years, there has been a lot of buzz about micromarkets, and a growing appreciation of the implications the micromarket concept has for retailing. Anything that can be identified by a machine -- barcoded, for example -- can be sold through a micromarket. At present, though, in the United States at least, they seem pretty much to be confined to workplaces, which are not prime locations for selling toys and novelty items.

I think micromarkets have a real role to play in the hospitality industry too. For example, a well-maintained micromarket situ­ated next to the front desk in a motel would be a lot more appealing than a depressing minimart alcove selling cornflakes in single-serving disposable bowls. And it certainly could offer toys to young guests. I was reminded by a colleague of mine that the old U.S. Drugette sundry machines that he encountered in motel lobbies all over the South, four decades ago, sold water pistols and yo-yos along with toothpaste, towels and sunglasses.

For a long time now -- at least since the 1920s -- the retailing industry has explored vending (or unattended points of sale) tentatively, as a possibly efficient method for handling transactions that do not require the services of a clerk. For example, if you are running a department store, you would prefer that someone who simply wants six pairs of black socks be able to find and purchase them without tying up a valuable salesperson who should be discussing the availability of sweaters in different colors and sizes.

Until recently, these explorations did not catch on because the technology for offering sufficient capacity, selectivity and pricing flexibility just didn't exist. But now it does. And here, again, the micromarket as an unattended point of sale offers an alternative to vending, trading some security for greater accessibility and flexibility.

And there is a huge opportunity for a much wider range of automated retailing through vending machines. Installing a vender in a retail environment gives store owners convenience plus control. Shannon Illingworth, founder and chairman of AVT (Corona, CA) has been successful at implementing this concept. For the last five years, AVT has been a leader in developing automated retailing systems, customized kiosks and coffee "microstores." There have been thought-provoking pilot projects in other countries, too.

According to Joanne Bethlahmy, director of Cisco Consulting Services' Internet Business Solutions Group (retail and consumer packaged goods), the integration of appropriate micromarket, vending and "virtual store" systems into a satisfying and engaging experience provides benefits to everyone. She discussed the concept at the National Automatic Merchandising Association's OneShow (see VT, August).

Bethlahmy imagined a resort hotel equipped with a virtual store that would offer guests a "remote concierge" information kiosk, a "digital mall" equipped with terminals displaying merchandise for immediate ordering and later delivery from a central warehouse, self-service games, beverage vending machines and a micromarket-style food court. It is not difficult to see toy and novelty merchandise finding a place in a retail environment like this.

It also isn't hard to envision a role for vending operators in assembling these systems and running them on the familiar concession basis, to meet the needs of locations that recognize the inefficiencies of trying to do it themselves. You can read more about how this technology is changing our industry on page 20.