Predicting the future of intelligent vending kiosks with digital signage, Pt. I

July 26, 2012 | by Christopher Hall

There's a growing trend in combining vending machines and interactive kiosks — and then integrating those vending kiosks with newer technologies such as digital signage and mobile payments.

The next generation of intelligent vending kiosks could use digital signage to attract more buyers to purchase the products within the machines, but also bring in added revenue through third-party advertising — with the connected technology then also enabling secure credit and mobile payments, remote inventory management, demographically targeted advertising and dynamic pricing.

If you look back at the history of vending technology, the last big technological advance was when bill acceptors/changers were introduced to the machines, according to Raj Maini, Intel Corp.'s marketing director for digital signage worldwide, and that happened quite a while ago.

"We expect now that, with the advent of digital signage and the screen becoming the central focus of interactivity, the vending channel now gives the opportunity for the vending operators, the brands, to attract these consumers more as they make the vending kiosks not only a device that dispenses something but also an interface that allows the consumer to interact with it," Maini said. "And at the same time, on the back side of it, the vending operator is able to do a better job of managing the machine and a better job of understanding what is being bought."

There's a tremendous opportunity in the future of intelligent vending for both brands and consumers, said Ross Elkin, vice president of sales and marketing for kiosk provider Vigix Inc.

"I firmly believe that convenience is one of the fundamental trends that's driven the consumer marketplace across a number of categories over the past 20 years or more," he said. "In a lot of ways I think that a vending kiosk, a kiosk that has the ability to deliver physical products, in combination with all of the digital capabilities, is the next step in the evolution of convenience."

And the next step is coming for a myriad of reasons, Elkin said.

The consumer population is increasingly sophisticated and demanding in terms of what they want, when they want it, how much information they want, and the degree of control they want over an interaction, he said.

Consumers want to be able to exert control over their transactions and interactions. They want to be able to move at their own pace; they want brands to give them all the information that that they need; and they want to be able to opt-in to interactions. And the machines also allow for far more interactions and data collection with consumers, providing brands or retailers with invaluable information.

"In a lot of ways we view a kiosk as ideal for both the consumer and the operator or the brand," Elkin said. "I think it serves both sides, the consumer and the seller, extremely well; it combines in one place a lot of the things that we as consumers want and that we as business people or brands want to deliver."

Planning for the future now

With a huge installed base of vending machines worldwide, with Maini citing some estimates of 15-20 million deployed globally, it's time now to figure out what the next generation of intelligent Intel/Kraft Diji-Taste kioskvending kiosks will look like.

That's shaping up to be vending machines with elements of touchscreen digital signage interfaces, security for not only cash or coins but credit or mobile payments and software flexibility that allows deployers to dynamically update screen content or product pricing.

Many of the vending machines out there are not connected, so operators don't know at any given moment if the machines are working properly or if they have the correct inventory, Maini said.

"So the whole idea of being able to get to these remotely and manage those is a very big challenge," he said.

And the same kind of software and computing technologies that allow vending kiosks to utilize digital signage would allow operators remote access to more information about the machines.

Deployers can use the touchscreen interface to give consumers information on the products, for instance, displaying the nutritional value of food items, Maini said. And the same processing power that allows for doing remote management of the screens also allows for securing cashless transactions, and dynamically updating advertising — and then gets to the next business model where deployers can use anonymous video analytics to better understand the demographics of buyers and target advertising for better sales lift.

Elkin said, however, that the next generation of vending kiosks will also be able to connect to other places, whether it's a brand's website, a social media site or a retailer's loyalty program. If the consumer can't find what they want in the kiosk, they could connect to an e-commerce site to buy the product they want and have it delivered, for example. Or a customer could take a photo with the kiosk and post it to the brand's Facebook page to then have the kiosk print out a coupon for their next purchase.

"And then there's the whole interaction with mobile payments, whether it's scanning Google Wallet or text-to-pay, it all fits together so from the consumer standpoint it makes for a great experience," Elkin said.

Bringing in more information; sending out targeted advertising

From the brand's perspective, a digital signage vending kiosk can become "in a lot of ways the ultimate opt-in interactive branding experience," Elkin said.

Contrast the ability to have a two-way communication with consumers through a touchscreen interface with the old days of one-way communication via newspaper or television ads.

"We've evolved now to a point where we recognize that opt-in interactions, or interactions that go beyond just seeing a message, are more valuable," Elkin said.

If consumers can have a back and forth with brands via an interactive digital signage system, asking questions about products or finding reviews of products, the vending kiosk experience becomes more like the e-commerce experience and allows the consumer to opt-in to more interactions.

And concurrent technologies, like Intel's AIM Suite for anonymous viewer analytics or Vigix's ability to track the activity on the kiosk's user interface, allows operators to see who is interacting with the kiosk and the brand and how they're doing so.

"All of that information from the brand standpoint is tremendously valuable," Elkin said.

Collecting that kind of data also allows vending kiosk and digital signage operators to better target the advertising on a specific kiosk, either to the person standing in front of it at the moment or to the demographic information of the majority of its customers.

Using anonymous video analytics, also sometimes called anonymous viewer analytics, also can allow for some fairly novel deployments, Maini said.

Intel recently worked with Kraft Foods to deploy the Jell-O Diji-Taste kiosk, a digital signage-equipped kiosk that also used Intel AIM Suite technology to dispense samples of a new Jell-O product aimed at adults only to adults and not to children.

Similarly, Maini said operators could also use that kind of demographic information, male or female, adult or child or senior citizen, to show on the kiosk digital signage the right kind of products that the deployer wants to target to that demographic.

"If you look at the whole business model where you want to not only have people buy what you have but you also want to influence them to buy what they need to have, advertising becomes a very good channel for that," Maini said. "And given the amount of traffic that passes by these machines it becomes even more important."

Check back next week for Pt. II of our look at the future of intelligent vending kiosks.

Read more about digital signage advertising.

Topics: Advertising , Assisted Selling , Audience Measurement , Content Management , Digital Merchandising , DOOH Advertising , Interactive / Touchscreen , Retail

Christopher Hall / Christopher is the editor of A longtime freelance writer and reporter, he's bringing a fresh perspective and critical take on the industry.
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