How high-tech vending machines are poised to take on retail
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Toronto’s vending machine landscape may be on the brink of a major upheaval — with dozens of high-tech automated kiosks appearing in some of the busiest spots in the city.
Deluxe vending machines stocked with cufflinks, health and beauty products and electronics are already selling their wares, and may soon be joined by other, more extravagant examples in subway stations, downtown streets and shopping malls.
“Sexy” kiosks selling little black dresses, erotic novels, contraceptives and beauty products may soon find a home in a downtown hotel lobby. Bay Street could be the location of a refrigerated automatic machine touting organic meats and steaks for business workers to collect on the way home.
A key player in the automated retail world is Toronto-based Signifi, which has four international offices and machines operating in 10 different countries, including Dubai, Russia and the Czech Republic.
Shamira Jaffer, Signifi’s founder and president, said Torontonians should look for at least 40 new automated kiosks launching within a year.
“Next spring, it’s going to be a whole new world,” said Jaffer.
Automated retail kiosks are bigger, brighter, smarter and more sophisticated than traditional soda and snack vending machines. Some have velvet lining, robotic arms and lights that change colour — even playing movies and music to tempt passersby.
They have touchscreen computers to provide additional information on products and to grow the brand’s social media footprint by encouraging consumers to tweet out the company name in exchange for a discount.
The kiosks cost from $20,000 to $80,000, depending on software developments and size, and they can make upwards of $50,000 a month, according to Jaffer.
Signifi first started selling the kiosks last year and said the majority of their business is currently overseas. This month, the company installed a kiosk in a casino in Macau crammed full of luxury products for big gamblers such as Apple electronics, Rolex watches and perfume.
The machines allow retailers to extend their reach significantly by offering product 24 hours a day in various locations. They also provide immediacy and convenience to consumers, Signifi marketing manager Linda Martin said.
Items on sale in the kiosks are generally the same as retail price or cheaper because of the reduced labour and rent costs for retailers, she said.
“Buying in a store has lost its lustre. People don’t like the experience of walking into a store, being asked if they need any help and then standing in a line to buy a product — it’s too slow in today’s environment,” Martin said.
“This is how people are going to want to shop in the future.”
Signifi calls its kiosks “stores of the future,” claiming they may help retailers survive growing market pressures and revenue losses with the birth of online shopping.
Wendy Evans, president of Evans & Company Consultants Inc., said the automated kiosks were “an excellent innovation.”
“It’s great for dispensing things that don’t necessarily need to be tried on,” she said. “I can see this going big.”
Signifi has grown significantly over the past four years, doubling its revenue this year compared to last.
“We expect to double it again next year,” said Jaffer
“We’re growing like a hockey stick — it started off slow, but recently it’s just taken off,” she said. “We have huge orders coming up.”
Evans said the current success of Signifi’s kiosks was likely fuelled by the rise of online shopping and the consumer’s desire for immediacy in today’s fast-paced world.
“Customers are enticed by newness and the ability to buy wherever they want and however they want,” Evans said.
A number of different businesses have contacted Signifi to investigate the possibility of selling their products in kiosks, including LEGO, Staples, Mercedes-Benz, Nike, Lindt chocolates and Beats headphones.
But retail analyst Alex Arifuzzaman, partner at InterStratics Consultants, sounded a cautionary note. The kiosks would likely be successful with respected brands such as Apple or Nike, said Arifuzzaman, but their weakness is that they could only carry a limited supply of inventory.
“In certain specific niches I think this may work, but as far as replacing retail, I don’t see that happening,” he said.
Even though Signifi is based in Toronto, the Canadian retail sector has been one of the hardest to break into, Jaffer said.
There are only three companies currently selling from Signifi kiosks in Toronto — TheSource in airports, a cufflink vendor called Cuffwear at Bay Station and MINI Cooper in a shopping mall in Brampton.
“Canadian companies are slow. The challenge here is trying to convince the retailer,” said Jaffer. “We are really putting the gasoline on Canadian companies at the moment.”
Coming to kiosks:
Downtown condos could start to see kiosks holding cereal, laundry detergent, cheese, soup and other day-to-day items.
Hospitals could soon hold automated retail machines selling flowers in gift boxes and medical scrubs.
High quality sunglasses could soon be for sale in a kiosk with a computerized system that can show you an image of what the glasses would look like on your face.
- Grocery stores might start selling hot chicken, meatballs, sandwiches and salads in machines so customers wanting to grab-and-go lunch or dinner can avoid lining up at the deli and again at the checkout.
- Health clubs might soon start carrying squash balls, tennis balls, deodorant, ear buds and other fitness gear in kiosks.
- Gift cards for an array of different stores at big malls around Toronto might be dispensed from automated machines so customers can avoid long lines in festive seasons.
- Car rental companies may soon start to use automated kiosks to allow customers to collect and drop off car keys 24 hours a day.
Wild world of vending machines:
In Japan, vending machines are on almost every street corner selling everything from underwear to bread in a can, umbrellas, fishing bait and pornography.
- In China, vending machines are stocked with live crabs.
- Fresh baguettes are on sale from machines in France.
- In other parts of the world you can purchase cooked pizza, burgers, cupcakes, fresh lettuce, mashed potatoes, caviar and even bananas in a bag from vending machines.
- Running shoes and flip-flops are up for grabs in vending machines in Australia and Europe.
- In Toronto, you can buy original mini art pieces, poetry verses, cufflinks, old school baseball cards and hot tea in vending machines.