The Rise Of The Connected Vending Machine

The most exciting promise of the Internet of Things is the fundamental shift in how organizations generate revenues and how they operate. Smart vending machines are a great example of this new business paradigm, with increased revenues, improved profitability and a better user experience.

Not surprisingly, the vending machine industry is now part of the growing Internet of Things phenomenon. With more than 17 million vending machines worldwide, vending operators have either installed or are now considering adding Internet connectivity. Hence, tech giants such as SAP or Intel are racing to develop a range of platforms for intelligent vending machines.

According to the latest market study by Berg Insight, the global installed base of connected vending machines grew by 18.4 percent to 1.16 million units in 2014. Berg Insight also forecasts that the number of connected vending machines worldwide will grow at a CAGR of 18.5 percent to reach 2.7 million units by 2019.

The main market driver is currently cashless payments. Users can now pay for items using near field communication (NFC) payments, a credit/debit card or other mobile wallet apps. Coke has even developed its own cashless gateway to lower transaction costs and increase control over payments. The soda giant’s North American vending fleet – which dispenses an average of 15 beverages per second – currently includes 40,000 Apple Pay-enabled machines, and Coke plans to grow that to 100,000 this year. That, according to Tom Daly, Coke’s global group director for mobile, makes Coca-Cola one of the largest retail acceptors of Apple Pay. Smart payments provides not only new sources of revenues for the payment platforms but also better user experience, which translates in increase usage and customer loyalty.

Beyond cashless payments, opportunities abound for maximizing productivity and profitability by using a network of connected devices. Vending machines can now act as billboards, providing custom content, generating new sources of advertising revenues. Smartphone and social interaction also allow users to check in, interact and even send gift to their friends. For example, Coke is affixing QR codes to its vending machine to encourage users to create avatars and receive virtual gifts. The availability of machine data in real-time makes it possible for vending operators to reach entirely new levels of operational efficiency. Today, machines using built-in intelligence and sensor-data can make the right inventory decisions and monitor consumption patterns. Last but not least, intelligent vending machines allow vendors to remotely identify, diagnose, and repair machines.

As the Internet of Things gains momentum both with consumers and industries, we can expect even more transformational effect on the vending industry in the coming years.

Sebastien Chalmeton is the founder and CEO of Mighty Things, a global strategy and innovation company that helps organizations adapt faster to the realities of the connected world. Our projects focus on mobility, connected consumer devices, wearable technology and the Industrial Internet of Things.

Follow me on twitter @seb66 and @MightyThingsCo