Over the past 18 months, there has been a surge in interest by the vending machine industry to adopt new technologies. With over 18 million vending machines installed worldwide, what changes are in store for the market over the next five years? To understand this better, Intel asked Frost & Sullivan* to research the future requirements and trends, and they found the vending market is undergoing significant change that will transform the industry. To address changing market dynamics, up-sell opportunities and increasing government regulation, vending machine manufacturers are turning to computing technology, which is revolutionizing the industry. They are integrating a range of technologies, foremost LCD/touch-screen displays, cashless payment and telemetry. Provided below are insights into the many conclusions from the Frost & Sullivan report, including an intelligent vending machine market forecast, key drivers, restraints and challenges, geography-focused insights, and an overview of the Intel technologies that are expected to play a major role in this industry transformation.
Key Market Trends
- Global shipments of intelligent vending machines are forecast to grow at a 49% CAGR from 2010 to 2016, reaching around 2 million units with both the new and retrofit markets combined.
- Top food and beverage companies are taking the lead, currently testing advanced technologies, such as mobile payments, card readers, digital signage and user interactivity. Increased regulation is a key driver, including government mandated nutrition labeling (North America) and improved energy efficiency (APAC), which is being addressed by the adoption of LCD displays and telemetry, respectively.
- Cashless payment via mobile phones with near-field communication is expected to increase sales per transaction, especially for high-end products, like smartphones and portable media players.
- To be viable in the marketplace, vending operators need to increase efficiencies by implementing better route management and operational procedures, using human resources more cost-effectively, and improving machine maintenance procedures.
Figure 1. Total Vending Machine Market: Product Market Share by Units, 2010
Note: This analysis defines an intelligent vending machine as one with an LCD/touch screen.
What is an Intelligent Vending Machine?
The vending machine market comprises many players consisting of thousands of small operators and relatively few large or major ones. As of 2010, the total vending machine installed base was estimated to be 18.7 million units, represented by machines that have sufficient space to accommodate LCD screens. This includes large table top office vending service machines that have enough surface area to potentially support 6 to 14 inch LCD screens.
The installed base is segmented in Figure 1, where an intelligent vending machine is one that has an LCD screen for interaction. While an LCD screen may seem like a low bar to qualify as an intelligent vending machine, it’s typically the first priority of operators who expect to incorporate other technologies, listed in Figure 2, over the next 3-5 years
Priorities for Intelligent Vending Machine Enhancements:
- LCD: Touchscreen & interactive displays, ranging between 6″ & 42″.
- Cashless Systems: Payment via mobile phones & credit/debit cards.
- Telemetry Systems: Fixed or wireless connection for communicating machine health (i.e., sensor), inventory levels, etc.
- Voice Recognition: Another way for customers to interact with the machine.
- Digital Signage: High definition content medium: product info, graphical and video ads. Rich interactive content: when used in conjunction with a touchscreen.
- ERP: Vending machines communicating with corporate systems: finance, planning, dispatch, maintenance.
Figure 2. The Top Priorities of Operators World-Wide for Intelligent Vending Machines
Full-Featured Intelligent Vending Machines
The Fresh Healthy Vending Touch is revolutionizing vending everyday from its development offices in the United States. The company provides software, hardware and consumer interface solutions that can be applied together or individually to suit specific vending challenges. By offering scalable solutions, The Fresh Healthy Vending Touch is able to tailor solutions for vending operators’ specific needs and budgetary restraints. The Fresh Healthy Vending Touch vending machines are based on Intel® processors, allowing them to deliver a wide range of advanced features, including:
- Anti-theft/Anti-vandal cameras
- Anonymous facial recognition using Intel® Audience Impression Metrics Suite (Intel® AIM Suite)
- Product recognition allowing operators to control and monitor vending transactions and interactions
- Cashless payment using near-field communications
- Full vending machine controller functionality where an Intel processor replaces previously-used microcontrollers
Machine operators are supported by a comprehensive suite of software tools for the above functions, as well as for digital signage content management, telemetry, remote management and communications, and the overall operation of the system. The Fresh Healthy Vending Touch also implements the interactive vending machine interface called MIND (Make Informed Nutritional Decisions), which allows consumers to make informed decisions, and operators to comply with new legislation in the United States and Europe mandating the display of nutritional information. The Fresh Healthy Vending Touch integrates MIND technology with a content-managed screen that allows the user to explore product information and promotions, as well as execute payment and product selection on an interactive touchpad rather than a button keypad. The optional upper screen features promotional content and advertising, while the lower touch screen displays product information and facilitates the transaction.
Figure 3. Intelligent Vending Machine Market: Annual Global Shipment 2008-2016
The Fresh Healthy Vending Touch gives the consumer an interactive experience and provides the vending operator and product companies with opportunities for promotions.
Annual intelligent vending machine shipments are forecast to exceed 2 million by 2016, after growing at a CAGR of 49% beginning in 2010 (Figure 3). Worldwide, over half of the intelligent vending machine shipments will be retrofits, primarily adding a small LCD display and/or a card reader. Typically, system integrators retrofit the machine by installing pre-qualified kits from vendors specializing in this field.
Key Market Drivers, Restraints and Challenges
Based on their vending machine market analysis, Frost & Sullivan identified key market drivers, restraints and challenges that are expected to have significant impact on the industry over the coming years.
- Opportunities enabled by mobile phones
- Accept payments and transfer coupons with the swipe of a phone using near-field communication technology.
- Government mandates
- Display product nutrition information and product warnings (i.e., tobacco).
- Increased user interactivity
Interact with both the customer and the customer’s smart phone, add intelligence to detect and respond to individual viewers, and provide a dynamically visual experience with high-definition displays running rich graphics and interactive promotions.