Top 5 Vending Machine Trends Every Retailer Should Know About

It was in the early 1880s when the first retail coin-operated modernised vending machine was set up to dispense postcards. This efficient mode of retail gradually made it into the 21st century while undergoing countless changes and through multiple vending machine trends.

The findings from PepsiCo Foodservice’s consumer study on unattended retail show that consumer spending rose from 20% to 40% with unattended vending machines highlighting how post-pandemic, consumers are preferring unattended retail, digital transactions and hassle-free shopping experience. Hence, it is only right to say that the market size of vending machines and their acceptability will only expand in the coming years. And with this expansion will come countless upgrades, some of which are already shaping the upcoming trends for vending machine businesses. Let’s take a look at them in detail.

Top vending machine trends you must not miss

The thriving vending industry will experience a positive push for the following vending machine trends:

• Cashless payments
• Sustainability in vending
• Interactive and immersive experience
• Multi-function operations
• More product variation

These are described in detail below.

Cashless Payment: Providing convenience and security 

Right off the bat, the biggest shift in vending machine trends is the increase in the usage of digital payment gateways. With 48 billion digital payment tractions in the previous years, India topped the list with the most real-time transactions. This, in 2021 resulted in a cost saving of $12.6 billion for businesses.

The growing number of cashless and smart vending machines has led to increased consumer satisfaction with improved hygiene, and seamless, quicker, efficient and more secure transactions.

Additionally, this vending machine trend will efficiently ease the refund process for businesses and consumers likewise. Ensuring that cashless and automatic vending machines stay in the retail industry for the long run.

Support Sustainability: Making automatic vending eco-friendly

The next vital vending machine trend is the rise of eco-friendly and more sustainable ways to vend. The solution to it comes with the best vending machine software and hardware technologies that can provide sustainable solutions in the future.

Under this, the rise of upcycling old vending machines with smarter vending machine software will gain great attention. Vendekin’s RetroBox is one such sustainable solution. This plug-and-play device can be installed and ready to use in under 2 minutes.

It converts a regular vending machine into an automated vending machine by enabling touchless and easy mobile payments. Furthermore, it allows the consumer to purchase multiple products in one transaction, meaning they do not have to pay individually for each item.

Additionally, businesses would focus on advanced vending machine software that provides a deeper analytical insight into restocking and product status. Sensors that aid perfect temperature for products are in for a win among all vending machine trends as they reduce the risk of product spoilage.

Interactive and Immersive: Personalised experience with smart vending machines

“Consumers prefer unattended retail more than ever because they want to shop at their own pace. Consumers want control over their transactions, something that unattended retail gives them without the hassle of feeling pressured by an outside party”, shared Greg Herman from PepsiCo Foodservice in an interview.

Their experiment showcased how consumers now demand unattended and cashless retail experiences where they can physically feel the product and enjoy instant gratification with the least interactions.

This vending machine trend has already begun to shape consumer behaviour with vending machine software driven by algorithms that curate more personalised experiences.

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How Vending Machines are Reshaping Retail & F&B

1st century A.D., Roman Egypt.

People eagerly wait with a token in hand to experience an engineering marvel called the vending machine.

It might seem unlikely but with a massive history of over centuries, vending machines have been a part and parcel of human civilization. From the holy water vending machine in ancient Egypt to the smart snack vending machine in India, it has left a great impact on the global consumer, particularly in the retail sector.

So much so that the market size of global retail vending machines was estimated at USD 51.91 billion in 2021. Moreover, the beverage retail segment contributed 43% of the global revenue with smart coffee vending machines and energy drinks in the lead.

Another modern impact of the vending machine is seen in the way it continues to reshape the retail and F&B sector, especially through new-age smart vending machines. Retailers and FMCG brands are keen to understand how vending machine companies in India are moulding the retail sector by tapping into contemporary consumer behaviour, which expects immediate solutions and instant gratification.

Understanding the role smart vending machines play in retail and F&B, therefore, starts with understanding consumer purchasing trends and behaviour.

What Is Consumer Buying Behavior in FMCG?

The vending market is expected to grow at a  CAGR of 8.7%  between 2020-2026 in India, anchoring the vending machine strongly in the Indian retail market. This massive growth results from the unique consumer purchasing behaviour in the F&B sector. The traditional neighbourhood kirana stores, malls and hypermarkets are now facing a push from the upcoming micro markets of smart vending machines in India.

Earlier the consumer would wait in line, and go through the bothersome process of finding spare change. Then a shift in consumer behaviour was seen with liberalisation and digitalisation, but the biggest wave of change came forth with the pandemic.

Post 2019 the same consumer is conscious about:

• making physical contact
• traditional payment methods
• the time consumed
• finding the exact product all the time, everywhere.

In other words, the buyer is more aware of the consumer experience. Today consumers demand a personalised experience with minimum human interaction. Thus making the Indian retail segment all about convenience. This micro-market has evolved to be interactive, immediate and immersive. 

And at the centre of this touchless, cashless and convenient experience is the smart vending machine.

Smart Vending Machine: The heart of retail and F&B sector.

As per the India Digital Payment Report for the third quarter of 2022, there were over  19.65 billion UPI transactions made, accounting for a sum of Rs 32.5 trillion. This, along with the growth rate of 71.7% for digital payment (by 2025) makes for a massive shift towards a cashless retail experience. In addition to this, the consumer demands for unmanned yet inclusive retail experience.

Adhering to the shifts in consumer behaviour, the retail market has turned towards micro markets of unmanned and cashless vending machines solving the following concerns:

Less physical contact

The consumer wants to have an inclusive and immersive shopping experience while maintaining minimum physical contact. A position that is rare to achieve in a traditional retail setup, especially in F&B retail as the consumer shops around various products to compare the prices and specifications.

Smart vending solutions address this concern in just one tap. By scanning a customised QR code, the consumers now can check out all the products on their devices and proceed to pay. This in turn is building a repetitive habit of lesser and lesser contact while shopping.

Vendekin, one of the top vending machine companies in India, provides an intelligent machine controller framework, including hardware and both a mobile app and web interface, that can help minimise physical contact by up to 95 per cent.

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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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Smart Vending For A Sustainable Planet - Can Vending Machines Help Reduce Carbon Footprint?

Global decarbonisation is an uphill battle, a fact that was underlined and discussed by major economies from around the world as they made commitments during the UN Climate Change Conference in Glasgow (COP26) in 2021. And industries, including retail, will have to play an important role in building a lasting solution for a sustainable planet.

Smart Vending Technology can be one the harbingers of this change in the retail industry, with smart unmanned retail helping the FMCG sector reduce their carbon footprint while becoming more accessible to end users.

Read on to learn how.

Reduce food wastage with vNetra

Studies have shown that if food waste was a country, it would be the third-highest emitter of greenhouse gases on the list of countries with high carbon footprints. With smart solutions for vending products, especially food items, businesses can play a crucial role in sustainability.

vNetra, Vendekin's Google Cloud powered, GDPR compliant, AI/ML driven back office vending management software, is a step forward in smart vending technology by digitising the supply chain or backend vending operations. Through the vNetra software, inventory of all active machines can be tracked on a single platform. This means knowing in advance, which machines have perishable goods close to their sell-by date. Knowing in advance can help plan the sales of these items with a shorter shelf-life. At the same time, on restocking rounds only items with a sell-by date need to be refilled. This helps reduce product wastage.

Reduce fuel emissions with digital inventory management

Having a centralised system to track the inventory of all vending machines, retailers or vending machine operators can be aware of their exact inventory at all times. No matter where the vending machines are or where the vending operators are.

Machines have to be restocked based on product inventory and expiration date. The frequency of refilling vending machines depends on the frequency of consumption by consumers and the perishable nature of the products. If certain machines require frequent refilling trips, restocking them can be optimised by planning more refills in a single restocking trip, to ensure less fuel is burned and fewer emissions released into the environment.

vNetra provides a centralised inventory management feature to operators and businesses, which helps them effectively save time and money by taking appropriate decisions in regards to restocking.

Saving on energy usage

Departmental stores, supermarkets, showrooms and restaurants require a lot of energy, in the form of air conditioning, refrigeration, lighting, maintenance etc, to run their operations. Each of these devices could be run for an upward of 10 hours each day on average.

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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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Retrobox - The booster shot of smart tech for traditional vending machines

Traditional Vending Machines - Just a simple box with snacks

So what comes to mind when someone says vending machine? A large glass and metal box placed conveniently in a corner, with some brightly packaged snacks, plastic beverage bottles. Or maybe the vending machines that you are thinking of are those table top machines, commonly found dispensing tea or coffee in office pantries. Or perhaps you are thinking of the ticket dispensing machines at metro stations. While the products being dispensed may vary, all the vending machines above usually accept currency notes, coins and cards and allow for punching in the product code through some buttons or a keypad.

All in all, a vending machine would seem to be a simple mechanical box with limited payment options to make a purchase using cash or sometimes a debit or credit card. These machines also have a high chance of a lost sale if the customer walks away if he/she doesn't have the exact amount of cash on them, or if their card fails to swipe or be detected for some reason or if they do not wish to swipe/tap their card multiple times to get multiple products.

With the Retrobox, Vendekin Technologies is bringing transformation into the vending machine business, making these older, simpler and clunkier vending machines smarter with a touchless, ‘shopping cart’, mobile purchase experience with multiple digital payment options.

So what is Retrobox?

Retrobox is a palm-sized plug-and-play device created for vending machines by Vendekin Technologies, used by smart vending machines suppliers in India, US, Europe, UAE and other countries. It is compatible with all Multi Drop Bus (MDB) versions and can be set up in less than 10 minutes. The Retrobox acts as an interactive controller device, managing the execution activities through customers’ mobile phones. It can be placed inside the old machines by simply connecting the MDB, DEX and Keypad cables of the machine, without having to make any cosmetic changes on the exterior. The machine looks the same but operates more smartly and efficiently.

What made managing the older vending machines cumbersome?

Missing Innovation

• Older machines need a GSM telemetry device to transfer data. With the 3G sun setting upon 2022, these devices have to be upgraded to run on 4G and 5G networks.
• There are usually only two payment options available in older vending machines, either cash and card.

Poor Consumer Experience

• These machines dispensed only one product at a time.
• Older machines require currency change management to accept physical currency
• Contactless cards have limitations in terms of number of swipes/taps in a day

Operational Inefficiency

• Running and maintaining cash equipment comes at a high cost.
• Card readers, cash acceptors and telemeters are expensive to set up and maintain.
• Existing back office operation management softwares do not provide in-depth data analysis for the entire operation.

Today, if vending machines and kiosks do not support all forms of mobile cashless payments, the operators could be missing out on an extra 20% in sales. That’s where Vendekin’s Retrobox provides the booster shot of smart tech, providing a one stop solution to the operators.

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