Automated retail

Automated retail
In-store vending kiosks are becomingas ubiquitous as ATM machines��

By Janet Groeber
March 08, 2010

Courtesy of Rollasole

The U.S. vending landscape is a far cry from Japan, where nearly anything can be purchased from automated machines with the swipe of a card, but that appears to be changing. Everyday sundries—from candy and junk food to condoms, fish bait, Buddhist prayer beads or jeans—are being made available for quick fixes in what some are calling “automated retail.”

Of course, the kiosk concept grabbing the most headlines is Redbox, the Coinstar subsidiary that offers DVD rentals for $1 a night. While they’re not much to look at, discussions surrounding Oakbrook Terrace, Ill.-based Redbox and its machines (now besting the number of Subway sandwich shops), typically include its impact on Netflix and Blockbuster.

Redbox has grown from 125 vending units in 2004 to some 22,210 kiosks today (still dispensing DVDs for a dollar a night), including sites at Kroger, Circle K, Walmart and Walgreens. Having rented more than half a billion films and games—a number that nearly eclipses Netflix to date—Redbox could possibly relegate Blockbuster’s bricks-and-mortar stores to that of historical retail footnote. Then again, Blockbuster is fighting back with its own vending concept: DVD-dispensing machines painted in their signature blue.

Vending kiosks do not stop at DVD rentals, of course. There was Macy’s move to sell iPods and other gadgets in vending machines in 2006, which the retailer continues to do in a select number of its locations. Then there’s Waterloo, Wis.-based Trek Bicycle Corp., which rode the kiosk concept with a prototypical convenience “store” in Madison, Wis., two years ago. The Trek Stop, located outside a local cycle shop, consisted of a vending machine that sold cycling essentials, such as spare tubes, patch kits and water bottles, as well as energy bars and cold drinks.

Best Buy climbed upon the kiosk wagon when it launched vending machines at about a dozen major U.S. airports—a pilot for its Best Buy Express concept. Now numbering more than 50 installations, the machines are stocked with cell phone and computer accessories, flash drives, MP3 players, headphones, gaming devices, travel adapters, gift cards and other items geared toward customers on the go.

Automated retail is the name of the game for U*tique, the San Francisco-based company behind a “luxury vending machine” selling skincare, haircare and makeup. The first one bowed at Fred Segal in Santa Monica, Calif., stocked with 50 “must-haves.” Its sleek and futuristic design compares favorably with the merchandise housed inside. Founder and CEO Mara Segal hopes to place more of these vending machines in boutique hotel lobbies, gym locker rooms, A-list malls, airports and nightclubs.

For women who love the nightlife, two British companies are on a roll selling “rollable” ballet flats from vending machines in nightclubs, for those who need to dump the stilettos after a night of dance fever. Rollasole has installed machines selling ballet-styled slippers in more than 25 nightclubs. For about $10, customers can select from three sizes and four colors—Hi Ho Silver or Gold Digger, along with basic black or pink. Each pair comes in a box that morphs into a handy carry bag for the offending heels. Another company offers Afterheels, which are similarly styled ballet flats with the added status of being recyclable.

About nine months ago, Huntington Beach, Calif.-based Quiksilver teamed up with The Standard Hotel chain to launch a vending machine selling bikinis and boardshorts. Positioned poolside, the simple, red machine offers patterns inspired by the hotel’s four locations (New York, Los Angeles, Miami and Hollywood). The shorts also feature a “Quik Tips City Guide” in the waistband.

Offering up a multitude of products, from beauty to electronics to bathing suits, vending kiosks have taken the retail experience to the ultimate level of convenient, need-based self-service, and hold the potential to expand with their flexible, cost-efficient format.