REFINED ENERGY CORP. (Editor's note: an earlier version of this article ran on Vending
If you've ever heard the expression "don't judge a book by its cover," it was likely in a pure literary sense.
But now it's also apropos for vending machines lining the walkways in airports, housed in hotel lobbies, dispensing drinks at your favorite lunch spot, as emerging technologies are taking root inside machines and driving innovation on everything from operational efficiency to customer engagement.
In plain talk, today's self-service machine is not your father's self-service machine.
One big reason why is the increasing use of artificial intelligence which taps computer systems to perform tasks typically once requiring human intelligence — from visual perception to speech recognition to decision-making. It's defined by Merriam-Webster as the "capability of a machine to imitate intelligent human behavior."
How and why AI technology is advancing in unattended retail was the focus of a panel talk during the recent Self-Service Innovation Summit, a virtual conference presented by
The panel featured
Where, why AI is taking root
At One Source Office Refreshments AI is helping the company make educated decisions as it's allowing the company to harness data from all lines of the business and put the data in one central location accessible to business divisions.
It's helping to run the business more efficiently as the company is making more educated decisions with regard to equipment in the field, said Detwiler, who's been with the company for 14 years. One Source provides vending machines, micro markets and office coffee service in the
"We have a good handle on technology," he said, adding that the most important benefit has been sales analysis using AI.
"It opened our eyes about what we were doing, and AI is used in a multitude of ways such as forecasting sales if changes are implemented," he added. The technology is allowing the company to do "what if" scenarios, he explained.
"What if we did this, what would happen? It's letting us know before implementations and allows us to make merchandising changes in the field."
At
For more than two decades BTS has operated at
"The shortfall is the machine doesn't have a salesperson aspect so we're looking at how do we convince the traveler to spend for the product though they have no one to talk to or ask questions and how do we best reach the customer," Swift said, adding that the ongoing pandemic has made things "highly sensitive to conditions," such as people being concerned about touching a product that maybe someone else touched. "In a dispensed approach no one except the vendor has touched that product," he said.
Automated retail and AI are critical to the business at
"It's the front row and consumers moving toward proximity. They go to Best Buy to try things out and then they go home to shop. Automated retailing brings all that into a box and gives consumers the experience," said Rosenberg, a 27-year veteran of the CPG industry.
"We can control our brand with automation and ensure we give consumer frictionless experience," he said, adding the company's machines give consumers the option to browse and interact with products.
"We try to use tech and turn down the noise and move the consumer closer to product to what they want. Automated retail is important to making it happen," he said.
"We went out with a philosophy regarding equipment in market and consumer interaction and putting them in control of the transaction, a secure transaction and frictionless experience. It's the forefront of what we do."
AI benefits abound at Coca-Cola
At
"We use it in a number of ways," she said describing an AI dashboard that provides insight on the volume left in a dispensing machine. The company is using an AI algorithm prediction tool for determining when a beverage cartridge would run out. Another tool, called the mobile pour, was developed in 2019 as a prototype in a week and tested for six weeks, then rolled out in
The innovation, she said, was all tied to AI-related data.
"Sometimes the most simple data is what's needed and allows you to move really fast," said Teoh.
She also shared an anecdote of how AI data moved a consumer favorite, a Sprite-Cherry drink combination, into the official beverage dispensing product line.
"The data [on what consumers were creating at the vending machines] showed it was a big consumer flavor and so popular and the data told us we needed to bottle and sell it," she said, "This past year we see lightning fast innovation in all industries and (it's) exciting to see how it's all going to change in next year."
Coca-Cola is also using AI to learn what consumers are using mobile and where they are, and early data reveals mobile device use for vending beverages is much higher at cinemas, universities and hospitals, but much less in environments such as quick service restaurants. That's helping the company determine placement and technology access.
"We see 45% use at hospitals use yet in some locations no one is using it, but where they are using we see significant sales lift at machines," said Teoh.
Coca-Cola recently acquired a coffee service company,
Teoh said the company is still determining where the Briggo machine fits into the company's business.
Improvements are 'astronomical'
In response to that insight, Rosenberg shared that he is familiar with the Briggo machine and considers it a great innovation.
"We could order a coffee while waiting online at
Such innovation, according to Detwiler, is just the very beginning of AI's promise for the vending and self-service environment.
"The improvements and efficiencies that can be gained are astronomical," he said. "We haven't even flipped the switch."
While the ongoing COVID-19 pandemic has presented challenges and hurdles, it's also been a proving ground for AI and emerging technologies, said Rosenberg, as the pandemic is creating new consumer habits and giving consumers a choice when it comes to customization.
"You need a balance of right product and right technology and that is ac challenge we all face — to connect the right technology to the right products and meet customer expectations," Rosenberg said.
Manufacturers must listen to service providers
Achieving this balance will require more communication between equipment suppliers and the people who service the machines, noted Swift, who challenged equipment manufacturers to develop machines that are more reliable as they become more sophisticated.
"If we're down in a period of time, we've lost that sale…We have missed that customer," said Swift, who operates an AI powered CBD machine at the
"The equipment is coming up with something that has all these elaborate components to it, but at the same time it's subject to breaking down." His field team, which is highly experienced, has encountered difficulty servicing some of this equipment. If the machine is out of service for a few hours, 10,000 sales can be lost.
"What we're asking for is for manufacturers to work with us to come up with some equipment that is not as complex on the delivery," he said. "Take advantage of the AI side in terms of software, but the equipment needs to be less problematic, and some level of consistency to work effectively all the time. We're in the business of selling product, not in the business of managing a machine," he said.
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