January 24, 2008

Luxury Vending Machines Cropping Up

Good overview on BusinessWeek on the "Va Va Voom" of the new Vending Machines. Nowadays you can buy perfume or iPod, or in 3rd world country maybe you buy electricity...Slideshow of units from around the world recommended...

The Va Va Vooming of Vending Machines

slide show

The Va Va Vooming of Vending Machines
Aimed at young shoppers and wealthy frequent fliers, luxury vending machines are cropping up with more than Sprite and Skittles. Perfume or an iPod anyone?

by Aili McConnon

Cheetos, M&Ms, pretzels…iPods? Forget the dusty, poorly lit vending machines selling stale peanuts and Rice Krispies squares pumped up with preservatives. The vending machine is going glam. Consumers are using their plastic instead of their spare change to snap up luxury items such as digital cameras, cologne, and even software from automated machines in airports, malls, supermarkets, and other high-traffic areas.

ATMs, flight check-in kiosks, and subway ticket machines have made consumers much more comfortable with using their credits cards at self-serve machines. And, of course, the growth of online retail has resulted in many people shelling out hundreds, if not thousands, of dollars without first touching their purchases or dealing with a live salesperson.

Some shoppers even prefer no-touch to high-touch customer service, which is often a euphemism for pushy sales clerks. "When I go to buy perfume at a department store, I come out of there smelling like everything under the sun," says Madeline Wallace of Long Island City, N.Y. Instead, she prefers the new Coty vending machine that sells Jennifer Lopez and David Beckham fragrances in New York's Queens Center .

Automated shopping takes no-touch service to the next level. "The appeal is similar to an online purchase but with immediate gratification," says Gower Smith, CEO of ZoomSystems, which created the software and machines to sell Apple (AAPL) iPods in airports and Macy's (M) stores. Macy's had such a strong response from flush female shoppers since the company started testing the concept in 2005 that it's now rolling out automated machines in 400 stores.

This past fall, Elizabeth Arden (RDEN), Coty, and Rosetta Stone, a language-learning software maker, signed on with ZoomSystems as well. The machines let these companies hawk their wares in places where they wouldn't set up standalone stores or where existing stores have been shuttered.
A Self-Service Upgrade

Self-serve machines cut labor costs and often remain open long after traditional stores close. That was the appeal of the early 20th century coin-operated "automat" (BusinessWeek.com, 1/17/08). The glass-and-chrome curiosity sold stewed lamb and chicken pot pies to hungry Philadelphians and New Yorkers, including artist Edward Hopper, who in 1927 created his famous Automat painting. In the 1990s, vending machines sprouted up throughout Japan, fueled by rising wages and spiraling real estate costs. The majority sold food and beverages, but some also offered business shirts, umbrellas, flowers,& and pornography.

The new luxury machines in the U.S. use a robotic arm to retrieve the products and are much more slick, high-tech, and interactive than the machines peddling soda and snacks. The gold-and-silver Coty machine in Queens Center, for example, has larger-than-life pictures of J.Lo and Becks plastered all over it. Instead of pushing buttons, shoppers use touchscreens to make their selections and get instructions on how to return purchases. A flat-panel TV continually plays a demonstration video with music.

Certain machines have additional high-tech bells and whistles such as a "virtual beauty consultant" at the Elizabeth Arden kiosk, which suggests the best product for a given skin type. The Coty machine lets customers sample the perfumes by pushing a button that releases a scented puff of air through a quarter-sized hole below a picture of the fragrance.

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Posted by staff at January 24, 2008 09:48 AM