So How Does a Smart Vending Machine Work Anyway?

Placed mindfully in parks, cafes, gyms, schools and housing apartments, there is a high chance, a smart vending machine will turn out to be a delight box for someone. Often stocked with goodies like snacks, refreshments as bizarre as paan, and even t-shirts, cashless vending machines in India are gaining more popularity.

Reports estimate that by 2032, the global retail vending machine market will reach an estimated value of US$ 130 Billion, attracting multiple businesses towards it.

And within this mesh of changes surrounding smart vending solutions, is an unanswered question, “how does a smart vending machine work?”

Let us dive a bit deeper to understand how a smart vending machine works.

Within the mysteries of vending machine operations:

To understand how a vending machine works one has to take into account its type, customised features and the specific technology used while making it. However, on an all-around spectrum, there are two types of vending machines in India:

1. Traditional cash or coin-operated vending machine
2. Smart and cashless vending machines.

This divergence stems from the user perspective or the way the customer interacts with the vending machine to complete a transaction.

How are Smart Vending Machine Operations Different from the Traditional?

In the case of a traditional vending machine, it is all about the spare change. The consumer is required to insert coins as per the product cost, press the right button and collect the product at the end. With little advancement in technology, these machines were soon customised to accept cash payments as well.

Some of the earlier vending machines like tea and coffee vending machines or soda vending machines in the early 90s were coin-operated. These machines mostly had spiral holders that would move in order to dispense the product.

Such vending machines worked unsatisfactorily as the coin often got stuck within the machine and made it a nil transaction. Moreover, it was difficult to refund the amount to the consumer instantly.

Then arrived the smart-cashless vending machines. These technology-driven smart machines permitted cashless transactions via multi-channel payment methods. Currently, digital payment gateways like credit/ debit cards and UPI are available on all smart vending machines in India powered by Vendekin Technologies.

The consumer needs to scan a QR code which will direct them to a web app page, where a catalogue of products appears. After selecting the product/s through the web page, they can simply proceed to pay digitally by scanning a QR code on the vending machine.

Making Life Easier: Smart Vending Machines

This wave of advancement has also allowed the customer to experience a more inclusive retail experience with minimal physical contact and shopping time, giving rise to contactless vending commerce.

Additionally, it allows the consumer to select multiple orders and pay a cumulative sum in the end instead of purchasing one product at a time.

Smart vending machine software like vNetra by Vendekin, also helps businesses track inventory levels, vending machine operating status and collect data on consumer buying patterns and much more. These kinds of benefits have made many big FMCG players like Coca-Cola and Haldiram switch and buy smart vending machines.

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Finding the Right Location to Install Smart, Cashless Vending Machines for Higher Sales

With around 65 lakh potential set-up locations across 500 cities in India, smart and cashless vending solutions are driving the Indian vending market at a Compound Annual Growth Rate (CAGR) of 14.9% (2020-2026). Moreover, as more brands are gearing up for phygital retail markets in India with automated and touchless vending machines, it has become vital to target the right location and spaces for your products to get more profitable returns.

But, what are some good locations for vending machines?

In all honesty, a vending machine can be installed anywhere from offices to subway stations and from departmental stores to housing apartments, depending on your target consumer and business needs. That being said, it is important to consider various factors that make a space more suited to install a smart vending machine with cashless payment solutions.

Location Matters! Here’s why

India hosts 40,000 hospitals, 249,000 factories, 113,000 public places, countless workspaces and residential apartment complexes that can turn into the right opportunity to upscale your retail business with low-risk and cost-effective cashless vending machines. What connects all these varied spaces are factors like comparatively high footfall, power availability, product-specific demand, rent, distance from the warehouse, etc.

1. Daily Footfall

Vending machines and cashless vending solutions are meant to serve people. Hence the most ideal locations to install a vending machine are places with significantly high foot traffic or visitors. With high footfall, the chance of attracting impulse and habitual buyers increases. In either case, your business revenue will increase. Touchless vending machines with digital payment solutions have a higher advantage as the transaction becomes quick and secure in places that host large crowds.

Moreover, by placing strategically branded vending machines, you can really get some brand recall going in places with more eyeballs. Know more about Private labelling services by Vendekin here.

2. Power Availability

All automated and cashless vending systems are electrically operated, hence, to retrieve benefits from your vending business, you must ensure constant availability of electric power or at least a backup generator. Additionally, this is a must for food and beverage businesses planning to go the smart vending machine route since their product will often require an in-built refrigerator or food-heating oven.

3. Demand and behavioural trends

The simple rule of demand and consumer behaviour applies to Instant Commerce as well. This has only been elevated with smart vending machine payment solutions. For instance, at workspaces in India, employees and visitors are accustomed to tea, coffee and light snacks. Hence the demand for a tea/coffee vending machine or a touchless snacks vending machine is high.

Likewise, for a nutrition bar and juice products, gyms and parks are profitable locations.

With the right information and proper understanding of the behavioural patterns of the target audience and the demand trends of the places they visit, placing a smart vending machine is easy.

4. Distance from the warehouse

Smart vending machines too require stock re-filling as and when required. So having a vending machine installed strategically nearby a warehouse or in a well-connected area is a plus for your business. As a result of which the cost of logistics goes down significantly.

Vendekin’s smart and cashless vending solutions come with vNetra, a GDPR-compliant, AI/ML-driven back office vending management software that tracks the inventory level of the vending machines along with other rich data points around sales, discounts, margins and user consumption behaviour.

Can a vending machine be placed anywhere?

A smart vending machine can be placed anywhere, but for the best returns in your buck, strategy around location is key.. Depending on the space available, the location and the kind of product being vended, Vendekin will provide your business with customised vending machine solutions.

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In conversation with Abhinav Soni, Sales Head - Opportunities & Challenges for smart vending machine

Vending may have been in India for almost 40 years now, but as the world rides the new wave of digital retail, our sales lead Abhinav Soni shares his thoughts on the opportunities and challenges presented by smart vending technologies, the solutions provided by Vendekin to brands globally and the challenges his team faces in selling this idea to brands and entrepreneurs. Excerpts from this interesting conversation:

Smart Vending Machines in the Indian market

Abhinav shares that the exponential growth of digitisation in India has resulted in massive traction for the idea of a smart & unmanned retail landscape. Multiple brands are showing interest in building new channels of sales & even beginning to explore automatic vending machine prices in India. While smart vending machines offer end-consumers a touchless and personalised experience, Vendekin Technologies provides smart vending solutions in India and worldwide to brands in the retail and food & beverages (F&B) sector. Vendekin does this by retrofitting their existing vending machines to make them “smart” – cashless and touchless – with the help of a web or app interface.  Vendekin also customises smart vending machines as per a brand’s specific needs and requirements and provides an AI/ML (Artificial Intelligence/Machine Learning) driven back office vending management software to remotely track sales and manage other vending machine operations digitally.

Traditional Stores vs Regular Vending Machines vs Smart Vending

While Abhinav doesn't believe in the idea of pitting the concepts of traditional stores, regular vending machines and smart vending machines against each other, he does elaborate on the benefits that brands experience with smart vending machines. For instance, setting up a traditional brick and mortar store takes a lot more time and money to get up and running. Regular cash-and-coin operated vending machines come with their own set of limitations and still require tactile human interaction and manual intervention in its operations

Smart vending solves both of these challenges. A vending machine can be set up in as less as 1/10th of the cost of a traditional storefront. And in less than 24 hours a business can be set up with smart cashless vending machines in India. Customer transactions on these machines are entirely touchless, managed through smartphones, while all the sales data and interactions can be tracked digitally by the vending machine operator.

Expanding Beyond the Usual Markets

Vending machines are a common sight at airports, railway stations, bus stops, corporate offices and various public spaces. But there's a lot more that can be explored, says Abhinav. Vendekin-powered smart cashless vending machines can be set up in residential complexes, educational institutes, business parks, fitness centres, hospitals, etc. Basically, any place that witnesses high footfall is a potential place of business for smart vending machines.

The team at Vendekin can help businesses identify such high footfall spots across the country and handhold them in setting up smart vending machines at these locations. This is a part of Vendekin’s bouquet of vending solutions in India and across the world.

Scope of the Vending Industry

According to Abhinav, vending has now evolved over the usual packed snacks and beverages. The smart cashless vending machines in India and worldwide can be customised as per the product a brand wants to sell. Natural Ice Cream now vends tubs of its popular ice creams through a customised refrigerated vending machine in Pune, similarly Shaukeen Pan has a unique "Paan Vending Machine" outside its store and Gadre Marine has packaged seafood vending machines installed in a residential complex.

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From T-shirts to Panipuris: The Oddest Vending Machines in India

Over the years Vending machines in India have become commonplace. Especially at airports, railway stations, bus stops and hospitals, vending snackables like chips, chocolates, beverages - perfect for the traveller-on-the-go. Or in offices vending a variety of coffee and tea concoctions. But are these the only things vending machines can dispense? While the digital vending machines in India are not dispensing puppies or lingerie just yet (they do in Japan!) things have gotten pretty interesting here too!

The team at Vendekin Technologies has travelled far and wide for research and to install our smart, cashless and touchless vending machines in India and globally. Here’s a compilation of some of the oddest and most interesting vending machines we have come across in India:

Panipuri Vending Machine

A Delhi man has made a touchless golgappa vending machine that dispenses these scrumptious water balls, also known as panipuri, completely sans human contact or touch. From golgappa or product selection to cashless payment to the final dispensation of golgappas — the entire vending machine operation is touchless, says Govind, who has custom designed and developed this contactless vending machine in India.

All you have to do is scan the QR code and make the payment. Once the payment is done, the machine will dispense a sealed pack of golgappas. The pack contains a glass for keeping the mouth-watering flavoured water from four available options — sweet, spicy, hing and mix.

Similarly, a person from Banaskantha district of Gujarat invented a contactless panipuri vending machine. The machine dispenses a panipuri once the user selects the price of their panipuri treat, and inserts the respective cash into the machine. A few seconds later, the vending machine opens a flap underneath the keyboard and out comes a mouthwatering panipuri onto the conveyor belt.

T-Shirt Vending Machine

Vending machines in India only dispense quick food items right? But this Vendekin-powered smart vending machine in Pune sells t-shirts! Installed at Westend Mall in Pune by Universal Classic Tshirts Co., this customised, unmanned "t-shirt shop" has turned many heads, generating organic interest in the brand.

Apart from being an unmanned store, what makes this vending machine even more attractive is the price range and variation of the products. With prices starting at Rs. 399 and an option to choose from 8 different types of t-shirts, this vending machine has become quite the crowd-puller in this Pune mall.  And like all the Vendekin-powered custom touchless vending machines in India, it accepts digital payments, supporting all major payment platforms and e-wallets.

Paan Vending Machine

Pune-based Shaukeen Paan sells their wide range of paans through Vendekin-powered smart vending machines. They were inspired and impressed by the fully contactless vending machine at Chitale Bandhu, also powered by Vendekin. Vendekin Technologies’ team guided them through vending operations and even suggestions about the ideal packaging of their product for the machine. This is perhaps the first contactless vending machine in India selling paan. During the several lockdowns, even as a majority of shops and businesses were shut, this Shaukeen Paan digital vending machine in India would stay operational 24X7, ensuring no stoppage in the sales. Curious as to what mechanism this custom touchless vending machine in India uses to dispense paan? Read our earlier blog detailing the entire journey of how this digital paan vending machine came to be!

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Stories from Vendekin's Second Outing At the Retail Leadership Summit (RLS) In Mumbai

Vendekin Technologies participated in the Retail Leadership Summit (RLS) 2022, organised by the Retailers Association of India. This was the second instance where Vendekin participated in the RLS, the first time in 2020. The vending machine industry is one of the most crucial segments of the retail industry, also known as the unattended or unmanned retail. Vendekin Technologies took part in this prestigious event with two goals in mind.

1. To study and understand the winds of change in the retail industry post opening up of markets after removal of Covid-19 lockdown restrictions.
2. To showcase the vision that the future of retail is Instant Commerce and how we’re pioneering it with the best vending machine management software in India and globally.

The Future is Instant Commerce

Our founder Mr. Aroon Khatter presented Vendekin’s POV of the future of retail in India and globally and everything about Instant Commerce (Vcommerce) on the second day of the summit held at the Westin Mumbai Powai Lake.

Instant Commerce is the natural extension of QCommerce or Quick Commerce (Swiggy Instamart, BlinkIt, Dunzo), which has grown from Ecommerce. The internet gave us all the gift of convenience, where one could be sitting in the safe and comfortable confines of their homes and ordering what they desire through online shops. While Ecommerce ensures our products are delivered to our doorstep within a couple of days or purchase, Qcommerce bridges that gap by establishing a robust local ecosystem of vendors that can fulfil the needs of the end consumer within a few hours. Instant Commerce, or we love to call it, Vcommerce (Vending Commerce), is the future, which brings the store to the customer with smart cashless vending machines solutions in India powered with the smart tech of online payments, touchless user interface, and a digitally managed inventory for the retailers and vending machine operators.

Giving RLS an experience of VCommerce

Our marketing and customer success team too participated in this summit. Vendekin Technologies booth had its latest smart vending machines on display, which gave the visitors a first-hand experience of Instant Commerce. We noticed that this year’s summit had a lot of first time attendees, and the ones who interacted with our teams were delighted by the power of Vcommerce, smart cashless vending machines solutions in India, the platforms we provide, like vNetra for retailers to manage their vending machine operations effectively, digitally and the scalability it provides to their businesses on how to go from 10 to 2000 machines spread all over the country.

We also attended some interesting talks and panel discussions at the event, which gave us an interesting POV, since there were several shifts in perspective in the retail industry that were clearly evident right from the opening keynotes to the offerings of the several exhibitors at the event.

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In conversation with Mr Ajit Nair, VP Product at Vendekin Technologies

Continuing with our In conversation… series, this time we decided to sit down with someone we all know as an ocean of knowledge when it comes to the product development of smart vending machines at Vendekin Technologies.

We got talking to the Vice President of Product, Mr. Ajit Nair, an expert in product management and network security, about his vision of making the retail vending experience a truly touchless and cashless experience that works seamlessly across a user’s multiple devices. We also spoke about his philosophy of innovation, product development and the future of vending and Vendekin!

How did it all start for you?

As a child, I was interested in building and repairing things at home. That's where the builder mindset kicked in for me. Over the years that builder mindset shifted to building products for

1. Telecommunication grade Signalling stacks to Billing and Charging stacks, handling millions of calls and billing data daily
2. Network Security stacks
3. Telecom Virtualization products and finally
4. Consumer Applications and SaaS Enterprise software

Subconsciously this builder mindset then shifted to a common thread, i.e every piece of work that was done did make a difference to those around me.

The difference could be in the form of helping people connect with their loved ones, creating systems where people could share their private information to access services without worrying about their data’s security, or even ensuring that a late hunger or craving could be fulfilled late in the night without having to rummage for cash through cashless and touchless smart vending machines.

The shift in mindset has also made me realise how to strategize about a product for the future and make decisions according to what a consumer would look for as a natural progression for the service. This forward-looking mindset has helped my love for building products grow alongside the intention of building a sustainable business. With Vendekin Technologies, the learning has not just been quick but also helped me grow as an individual. To be agile and resist making decisions based on gut, instead relying more on data received from the product and its users.

What technologies do you work with and what products have you developed so far?

I have worked with technologies like microservices architecture, cloud, networks, React JS, JavaScript, Typescript, scalable systems and even old school tech programming languages C, C++. Right from writing code for low footprint systems to large scale systems. Bottom line, I enjoy writing code and building systems that put a smile on the face of the consumer.

The products I have developed so far include SS7 stacks (Signalling System for PSTN), telecommunications mediation product for billing and charging, network security stacks like SSL, IPSEC, EAP, IKE, PKI - Certificate Management, securing a popular gaming console, secure policy management (MAM, MDM) for mobile phones and consumer mobile applications and SaaS Enterprise software for unmanned retail.

What is your philosophy of innovation in product? Enhancing user experience or making operators' lives easier?

As a smart vending machine company in India, end-users and their aspirations are the central theme at Vendekin Technologies when it comes to creating products. This is a philosophy that emanates from Aroon Khatter (Founder and CEO), right down to the teams like product, marketing and sales.

To explain this philosophy further, let me give an example. We have around 30 million cabs in the world today providing services of moving people to move from one location to another. There are at least 10 major platforms bridging the gap between these commuters and cab service providers, such as OLA, UBER, GRAB, LYFT etc. Now imagine, there are around 100 million unattended retail kiosks but no one platform to connect consumers to these machines. That is the problem that the Vendekin’s product team is focused on solving. That of creating smart vending machines. The opportunity is immense with layers of complexity in solving it.

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