The concept of the vending machine has a surprisingly long history. The earliest known vending machine dates back to the first century AD in Roman Egypt. This device had a simple mechanism for dispensing holy water after inserting a coin. Then, in the 17th century, portable vending machines for selling tobacco appeared in English inns. In the 19th century, vending machines were used to distribute ‘banned literature’, and the first fully automatic machine came on the market for selling postage stamps. Over the course of the 20th and into the 21st century, the use of vending machines has experienced significant growth. They are used to sell a multitude of items, such as cigarettes, snacks, sweets and chilled drinks, as well as books and newspapers, contraceptives and even cars.
The basic mechanism of the vending machine has remained more or less unchanged for many years. It is a coin-operated device that is periodically refilled manually. In recent decades, significant progress has been made in the development of the technology behind the vending machine. Driven by digitalisation, the rise of smart technology and developments like the Internet of Things (IoT) and Artificial Intelligence (AI), vending machines have been transformed into smart devices that offer users a much more personalised and sophisticated experience.
A number of social developments have contributed to the rapid technological development of the vending machine. We have become accustomed to a 24-hour economy where we can buy food, drinks and other items at any time of the day or night. In addition, the modern lifestyle puts much more emphasis on individuality, autonomy and convenience: we want to be able to buy anything, wherever and whenever it suits us, without anyone else's intervention. Furthermore, practical issues around staff play an essential role; entrepreneurs in all industries have difficulty finding and retaining staff. All these trends are driving the development of vending machines.
The rise of contactless payment means that vending machines now facilitate a wide range of payment options, including debit cards, credit cards and loyalty cards, as well as mobile wallets such as Apple Pay and Google Pay and, in some cases, even crypto-currencies. This allows customers to choose their payment method and makes them less dependent on whatever cash they happen to be carrying.
Modern touchscreens enable a more engaging and interactive experience that is not purely transactional but also provides the opportunity to browse through different products, view nutritional information, view relevant promotions and get recommendations based on selected products or previous purchases. This personalised interaction is activated via the payment method offered, a loyalty card or, for example, voice or facial recognition.
AI makes it even easier for customers. AI-powered cameras and weight sensors simplify customer interaction and improve the user experience. Using a debit card, credit card, or mobile wallet, the customer can open the vending machine door and take out the desired products without further interaction. The cameras, sensors, and AI software record which products are taken out, and once the customer closes the door, the amount due is paid fully automatically. This also makes it possible to offer a greater variety of products, as the machine range is not limited by mechatronic systems such as spiral dispensers.
By integrating with a mobile app, a vending machine can recognise a customer from some distance away and make choice suggestions in the app based on previous purchases or current promotional offers. Those suggestions can be made extra attractive by directly applying discounts based on accumulated credit. This level of personalisation creates an extra engaging customer experience, encouraging repeat purchases and building customer loyalty.
From the entrepreneur's point of view, modern vending machines offer great opportunities for profitable operation in a variety of sectors: Retail, hospitality, sports, education, healthcare, offices, leisure etc. Connectivity, smart technology and AI not only give more insight into customer behaviour but also make it possible to get a much better grip on inventory and assortment management, safety and operational reliability. With a modern vending machine, you can offer customers optimal service 24 hours a day, even in locations where staff are not always present. This results in higher sales in a modest floor space; entrepreneurs have achieved sales growth of as much as 180% over traditional machines.
One of the main challenges when operating vending machines is the logistics around inventory management and restocking. AI algorithms can play an important role in optimising replenishment routes by analysing sales data. AI can also be applied to determine the most optimal product mix per location and even per machine. This boosts sales and minimises wastage due to unsold items.
AI technology and over-the-air updates (OTA) enable dynamic pricing, where prices can be set flexibly depending on factors like location, demand, time of day, stock expiry date, or even the weather. Discounting a chilled drink during a hot summer day boosts sales and provides a positive customer experience. At the same time, this strategy allows an entrepreneur to maximise profits by charging higher prices during peaks in demand.
Many vending machines are in locations with limited surveillance or even in unstaffed locations. AI-controlled security cameras can be deployed to detect suspicious behaviour and immediately alert (security) staff. Committing to cashless payments reduces the risk of theft and eliminates costs associated with cash handling and logistics. Moreover, cashless machines can be simpler in their construction. With digital locks, access to vending machines can be regulated and monitored. Only authorised personnel can open the vending machine, minimising the risk of internal theft. For the sale of age-restricted items such as alcohol, tobacco and other 18+ items, vending machines can be equipped with automatic ID verification or facial recognition (in markets where this is legally allowed).
The connectivity of smart vending machines makes it possible to install software updates remotely, ensuring that the machines are always up-to-date. The machine's operational status and built-in hardware, such as displays, payment terminals and receipt printers, can be monitored remotely. This enables simple malfunctions to be resolved without the intervention of staff or a technician. The absence of complex and sensitive dispensing systems also makes modern vending machines mechanically less prone to malfunctions and, thus, easier and cheaper to maintain.
Smart vending technology offers business owners many opportunities. AI tools can significantly increase the operational efficiency of vending machines, improve profitability and reduce costs. This does require substantial investments in upgrading AI-powered machines and associated software and integrating cashless payment technology and tools for preventive maintenance and monitoring. In addition, the connectivity of smart vending machines, the processing of digital payment data and the collection and processing of detailed customer data require high levels of data security and strict compliance with privacy rules. The use of advanced technology also means a shift in the composition of the workforce, with more focus on digital skills, and training programmes to maximise the capabilities of the new systems. In the long run, all these investments pay off in higher revenues, lower costs and more efficient inventory management.
Smart technology and AI developments are moving fast and driving innovations in vending solutions. Nobody can predict the future exactly, but some trends are already visible. We are only at the beginning of robotisation, which enables vending machines to perform increasingly complex tasks. A good example is GoodBytz's robotic kitchen, which can independently prepare various meals. It is controlled by a self-order terminal that allows customers to put together the meal of their choice. Freshly prepared drinks and meals can be tailored extensively to consumer preferences, such as fresh coffee, pizza, salads, sushi and vitamin waters. Augmented Reality (AR) and Virtual Reality (VR) techniques, combined with smartphone integration, make interacting with a vending machine an engaging and more immersive experience. These techniques can bring products to life in a virtual environment so they can be viewed in 3D. In-app gaming can add another dimension, such as playing a game on your smartphone to earn extra discounts. There is growing environmental awareness and focus on sustainability among consumers, and government policies are also pushing for more sustainable technology. In the future, vending machines may operate entirely on solar energy; there will be an increasing focus on zero-waste packaging and the use of fully recyclable materials in machine production.
Vending machines have a long history, but recent social developments and the rapid rise of smart technology have accelerated the development of vending machines. Connectivity, touchscreens, cashless and contactless payments, enhanced by the application of AI, make things much easier for customers while giving entrepreneurs access to a wealth of customer data that can be used to optimise assortment composition, stock management and the logistics around it. Modern vending machines thus provide entrepreneurs with opportunities to offer customers a better buying experience and build streamlined operations, cope with staff shortages and achieve higher sales with lower operational costs. Investment in technology, data clearance and qualified staff is a prerequisite for success, and it is also crucial to being at the forefront of future developments around robotisation, augmented reality, virtual reality and gaming.
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