Introduced almost a century ago, vending machines have been transformed by the technological capabilities of the Internet of Things. As mentioned by Rickard Andersson, Berg Insight senior analyst, “vending telemetry continues to improve in line with technology advancements, and decreasing costs of both equipment and connectivity services,”. These technological advancements now offer traditional vending suppliers an opportunity to reinvent themselves, changing both the way they operate and the way in which they generate revenue.
These developments have come at a good time—retailers have been struggling with keeping their physical brick-and-mortar stores competitive in a market increasingly dominated by online retail giants like Amazon, eBay, Google and Alibaba just to name a few. As companies now take advantage of new technology to go beyond the traditional retail offerings, vending machines are now moving on from the dated payment option of coins, establishing an entirely new way of supplying and buying Mars bars.
So what capabilities of IoT have changed traditional vending?
Powerful and reliable connectivity now not only allow companies to offer customers a product or utility as a service, but with applications for user customisation, improved security, smart payments, and continuous monitoring, the opportunities for vending using a network of connected devices are limitless.
- Cashless payments: Connectivity has been a big driver in applying mobile wallet services to the vending world, paving the way for cashless payments.
- Remote management: Gone are the days engineers are sent to monitor and check if the vending machine is operating well. IoT has enabled remote monitoring of the vending machine’s status and stock inventory, whilst digital signage can be updated remotely.
- Alerting: Alerts can now be set to schedule maintenance before the machines break down, therefore reducing unnecessary down time and the subsequent revenue loss. Notifications can be sent in real-time, alerting owners to any technical problems, or when the machine needs to be restocked.
Coca-Cola is a great example of how IoT is changing their retail offering. Not only did they introduce one of the first smart vending machines in the 1980’s (a machine developed by students that used microswitches to report on inventory levels and temperature) but to date they keep impressing with their advancements in the vending world. Their strategy is comprised of three key elements: a smart connected fleet, an empowering digital path to purchase, and seamless payment and loyalty.
Coca-Cola has now connected a third of its vending machines to the Internet so it can tell which machines are busiest and which varieties of the drink are selling the most. Many machines are also now using facial recognition accompanied with contactless payments options.
Further afield, SAP have developed Smart Vending solutions that offer customers access to real-time management dashboards and visualisation tools, showing timely sales and maintenance information throughout the entire network and at each individual point of sale. Meanwhile The International Vending Alliance, in partnership with Intel, have developed a ‘smart black box’ solution for vending machines that introduces cashless payments, touchscreens, and access to information that enables vendors to respond more rapidly to consumer tastes.
What does this mean for the retailer?
Retailers can now gain insights and predict trends based on customer behaviour. Actionable analytics can pinpoint high selling products and services, as well as which time periods have the highest sales volumes. Furthermore, retailers can accurately establish whether digital signage is influencing sales. The use of IoT in vending opens more opportunities for retailers to capitalise on data driven insights, helping to shape a more efficient supply chain and driving higher revenue streams.
Looking to take your first steps in smart vending? Contact us here and we’ll get you set up with the right connectivity and devices to get you started – all supported by our intuitive management platform.