Digital signage leads the way for ‘intelligent’ vending machines

Photo courtesy Intel

Photo courtesy Intel

Shipments of ‘intelligent’ vending machines incorporating touch-sensitive screens, cashless payments and/or telemetry systems are forecast to increase by a compound annual growth rate (CAGR) of 49 per cent, according to a new study by Frost & Sullivan.

The business consulting firm’s report, commissioned by chip manufacturer Intel, says manufacturers of vending machines have turned to digital technology to address market changes, pursue upselling opportunities and meet increasing government restrictions around the world. In the U.S., for example, they are being mandated to display nutritional information, while in Japan, they must meet increasingly stringent energy efficiency guidelines.

In 2010, the total installed base of vending machines with sufficient space to accommodate liquid crystal displays (LCDs)—anywhere from 152 mm to 1 m (6 to 42 in.) in size—was estimated at 18.7 million units, but only about 190,000 of these had been modified thusly. While the mere presence of an LCD may seem like a low bar for qualification as ‘intelligent,’ it is typically the first priority for vending machine manufacturers as they anticipate incorporating further technologies, such as mobile payment systems based on near-field communications (NFC), telemetry sensors that report inventory levels and other machine metrics and voice recognition software.

Growing at the estimated CAGR of 49 per cent since 2010, annual shipments of intelligent vending machines are forecast to exceed two million by 2016. Over half of these worldwide will involve retrofits, such as adding a small LCD and/or card reader to an existing machine.

Among various motivating factors behind this trend, the Frost & Sullivan report cites the ability of interactive digital signage content to promote sales and to command a higher price for goods by positioning them as higher-quality than those in other machines. Meanwhile, remote management capabilities—much like those seen elsewhere in the digital signage sector—are enabling the machines to send real-time notifications to their operators, which can help prevent expensive maintenance, automate restocking and, thus, ensure the machines’ continual availability.

“The vending machine has become a symbol of the world’s quest for convenience, operating 24 hours around the clock, seven days a week,” says the report.

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