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Self-Service Vending Technology in the ‘Phygital Era”

Vending machines are one of the earliest and most common forms of tech in buildings because self-service machines are some of the first pieces of technology ever created. In 30 A.D., the famed engineer Hero of Alexandria designed a device that automatically dispensed holy water when a coin was inserted. Nearly two millennia later, self-service machines come in all shapes and sizes, selling just about anything that will fit into them; candy, iPods, even cars. Now, vending machines are being used to dispense COVID-19 tests. 

Advances in technology are bringing new capabilities to vending machines, changing what consumers expect from self-service machines and buildings that house them. Smart vending machines were slow to take off since designs with large touch displays, internet connectivity, cameras, and various sensors weren’t as cost-effective as simpler ones. More cost-effective improvements, remote management, and back-end analytics have made smart machines more popular and enabled micro-markets, unmanned retail spaces that can process transactions. That’s only the beginning of where the physical and digital world (now called ’phygital’) converges in buildings. 

“The opportunities (are) to bring the phygital to create a better consumer experience, easier shopping for every person of every age, but not getting rid of your brick and mortar,” Rebecca Faulconer, president of Retail Automation Consultants, said at the recent Self-Service Innovation Summit reported on by Vending Times. “I think it’s a very exciting time to be in this industry.”

Changing shopping habits are impacting every form of real estate. The retail experience is the most obvious as the industry races to incorporate e-commerce and self-checkout, but these shifts also impact other property types. More deliveries and online shopping mean more visitors and packages to office buildings and multifamily communities. Self-service machines and micro-markets powered by ‘phygital’ technology are already core parts of hospitality, transit hubs, and institutional properties. There’s hardly a place you can go to that doesn’t have some type of vending machine. There are roughly 7 million vending machines in the United States, with each American spending $62 on vending purchases annually, according to the National Automatic Merchandising Association (NAMA). With a smartphone, there’s nowhere consumers can’t shop. Digital wallets make purchases seamless no matter where or how you make them. Those factors blend, creating new shopping habits, and businesses use the data from those new habits to better understand their consumer base. 

“From a data perspective, we’re trying to grab more of the 250 people (at a customer location),” Canteen chief strategy and innovation officer Mike Coffey said at the conference. “Data is really driving you to engage more consumers in the smallest population. Data is everywhere; it’s so critical to what we do in our business; it’s a huge driver operationally and on the consumer side.”

Self-service machines collect all the same data as other forms of proptech but on a smaller scale. Snacks and drinks for occupants and visitors were only the beginning. Vending machines today can mix a custom salad, blend up a fresh-squeezed juice and even cook a pizza. Other self-service machines sell the latest in technology or fashion. The software can track purchases in real-time to determine what’s a hot seller, collect customer demographic information and use location intelligence with GIS mapping to help to find ideal locations for new machines. Sensors and foot-traffic trackers can help operators better place machines within offices to make sure they’re visible and accessible to as many potential customers as possible. That all means that self-service and vending machines are evolving their place within spaces, using the latest technology to offer a greater variety of goods and services to occupants in various property settings. 

Though fine-tuning contact-less commerce was happening before the pandemic, the pandemic has fueled the popularity of vending and self-service machines of all types. The latest technology developments in the industry allow purchases to make selections just by hovering their finger or hand over their choice to make it truly contact-less. Japan rolled out an army of 4.1 million vending machines to help fight the pandemic, offering test kits and meal essentials. The Japanese government uses its vending machine initiative to prevent public crowds at health care and other essential facilities. Over the next four years, the global vending machine market is expected to grow by more than $10 billion. 

The ‘phygital’ era is fundamentally changing how we interact with and move through buildings. Self-service machines, vending machines, digital wallets, micro-markets, unattended retail, and food delivery lockers are being added to nooks and crannies of every property type. As technology and machines evolve, so too must real estate’s understanding of how best to leverage them. Once resigned to basements and back hallways, advanced vending machines with sleek aesthetics are placed front and center as an indicator of a property’s convenience and service.

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