Vending machines are an especially hot commodity right now in the United States. There are an estimated 5 million vending machines currently in operation across the country and this number is expected to grow by 10 percent each year until 2028. Dan Doromal, co-owner and vice president of operations for Everest Ice and Water Systems offers some insight…
A couple of decades ago, no one would have predicted the evolution and popularity of this market. However, technological advancements combined with an unmatched convenience factor and a massive shift in consumer habits have propelled vending machines into the modern age. This is beneficial to shoppers, convenience store managers, and, increasingly, vending machine owners.
Machines running on technology such as artificial intelligence and IoT sensors have unlocked more product offerings, such as food, clothing, books, and personal care items. For instance, you can now get hot vending machine pizza or even freshly shaken cocktails because the internal vending systems are tailored toward more personalized experiences. Combine this with 24/7 service, no extra employee requirements, and the knowledge that these machines can be placed almost anywhere, and we have ourselves a winning formula.
As we come across more vending machines in our everyday lives, this contributes to better awareness and increased investment. For instance, at Everest, we’re seeing more and more people discover the benefits of a passive income after buying a vending machine. Inspired by stories such as that of Stephen Slagle, who made $30,000 in the first year of owning a vending machine, this trend is catching on fast. What’s exciting, then, about the new boom is the promise of what could come next.
Consumer habits fuel market success
The pandemic was the catalyst for many factors that are now fuelling the vending machine market. The biggest factor was the rise in hands-off, contactless transactions across all aspects of daily life. While this was initially a safety precaution, many customers have discovered this way of shopping is also easier and more convenient. Although the worst of Covid-19 is over, the shift in consumer habits has stuck around.
Clearly, vending machines were well-equipped by design to benefit from this trend. Removing the salesperson from the retail transaction meant fewer hands handling the products, shorter waits at checkout, and a faster flow from distributor to consumer. Some 73 percent of shoppers say they prefer self-service over a checkout, so this is also something that retailers should pay attention to. The percentage is even higher for Gen Z shoppers, 85 percent of whom prefer self-service. So, we will likely see even more vending machines appear in line with a demographic shift.
From a retailer’s point of view, such a large demand for more self-service options has been impossible to ignore. Obviously, many retailers have worked hard to coax shoppers back into physical stores following the pandemic. Implementing vending machines has given them a competitive edge.
Vending machines and innovation
Technology has also certainly helped to transform and boost the vending machine market. Smart vending machines are armed with advanced tools that rely on artificial intelligence (AI) and machine learning (ML) to deliver a more personalized user experience. What makes these machines smart is their ability to provide advanced services such as predictive maintenance and inventory tracking.
For example, smart vending machines can use cameras and sensors to assess how long customers spend at the vending machine, or identify what products are most popular at certain times of the day. All of this makes the machine more user friendly, which translates to more returning customers and more business.
A great example is the ongoing success of Coca-Cola Freestyle. These high-tech drink vending devices allow customers to mix and match elements to create 100+ different drink flavors through an interactive touch screen. Shoppers can even select their drink preferences through an app on their mobile devices. This personalized service is now found in 50,000+ locations around the U.S. including stores, amusement parks and movie theaters.
However, it’s not just the consumers that benefit. All the consumer data collected through the machines is sent to Coca-Cola executives who can see how popular certain flavor combinations are, which can then influence future business decisions. The success of Freestyle has fueled even wider adoption as businesses realize the power and knowledge that comes from smart machines. Heinz recently announced a similar vending machine called “Remix” that dispenses personalized sauces and condiments.
Technology has also unlocked more product offerings. There are even machines that stock healthy produce while using AI to regulate optimal freshness. We’re not even limited to food products anymore, as smart vending machines can be adapted to stock everything from clothes to books to electronics. Again, this is a plus for retailers as well as consumers. The containment of vending machines means retailers can offer and highlight products that wouldn’t typically fit in their store, driving more sales while minimizing costs.
The future of vending
As more information is gathered from more interactive machines, I believe this will lead to further market expansion, but also greater environmental consciousness. Vending machines already have a smaller footprint than a brick-and-mortar building full of staff. However, I think the vending machine market should lean even further into this in order to sustain the growth trajectory.
One of the big things that we’re now focusing on at Everest is developing vending machines that can help drive our carbon footprint down even further. We achieve this by promoting less use of water, less packaging, and less power in ice and water vending. We know from research that consumers are gravitating toward our products because of our decreased environmental impact.
My prediction is that low-energy vending machines that dispense products without wasteful packaging, and reverse-vending machines that support recycling and sustainable waste management, are the next big thing for the vending market. Technology such as AI will help make this a reality as smart sensors can monitor the conditions and ensure energy-usage is as optimized as possible. It’s a win for consumers, for retailers and the planet.