Okay, so this only relates to online marketing in a distant way, but I think it is so cool that you can get an iPod out of a vending machine...it's similar to online marketing in the sense that there is no face-to-face customer service. Wonder how conversion compares to buying an iPod at the Apple store?

The key points in vending machine history, at the very end of the article is also neat

***

What'll they think of next?

By Mary Ellen Podmolik
Special to the Tribune
Published October 18, 2006

When Marshall Field's became Macy's, it brought numerous changes to the department store, and one was the arrival of vending machines.

Yes, vending machines.

But not the generic machines that dispense soft drinks and candy bars, the type that everyone has beat on once in a while, trying to get that Snickers bar to drop.

The new units sell small electronics such as iPod music players and related products. Touch screens will guide shoppers through product information and purchase, a robotic arm will retrieve the merchandise and optical sensors will ensure that the product is dispensed before a credit or debit card is charged. The units, from San Francisco-based Zoom Systems, will be in 189 Macy's stores in 32 cities this fall.

Their arrival offers a glimpse into the vending industry of the future, a world where new products would be available with a few button touches and card swipes. The United States has lagged behind Europe and Japan when it comes to automated merchandising. But vending-industry aficionados say American consumers are just about ready to accept the notion of using credit and debit cards for vending and buying much more than a soft drink and bag of chips.

After all, the industry reasons, look at what consumers already do for themselves: bank at the ATM, purchase products online, check themselves in at the airport and check themselves out at the grocery store.

Cashless vending "opens a whole new marketplace," said Michael Kasavana, a professor of hospitality business at Michigan State University. "What is the world's largest vending machine? The Internet. You can't touch the product, you see it like in a vending machine. The industry has moved away from traditional snacks, hot and cold beverages."

Since early April, customers in a Walgreens in Hilton Head, S.C., can buy freshly popped from a vending machine, and watch it pop, for just under $2 a bag.

<adding comment: BRILLIANT! I am a fiend.>



Across the board

At the State University of New York at Morrisville, students can buy 200 products ranging from batteries to eggs to iPod download cards from an outdoor automated convenience store dubbed Shop24. MooBella has introduced a vending machine that can make -- to order --nearly 100 varieties of ice cream. And customers at selected McDonald's restaurants can rent a DVD from an automated kiosk to bring home with their Big Mac.

What's ahead? In Belgium, All Seasons Services Inc. of Canton, Mass., is testing a machine that sells beer and wine. Customers show their identification to the machine, which snaps their picture and verifies the customer's identity before dispensing the product. And in Paris, Coca-Cola recently demonstrated a vending machine that along with soft drinks sells downloadable ring tones and games and takes digital photos of customers.

The transition -- from vending machines to what the industry likes to call robotic stores -- comes more than a century after Tutti-Frutti gum machines were installed on the platforms of New York elevated trains in 1888. But some old perceptions linger.

In a survey of 1,000 people, 7 percent said they use a vending machine daily and 11 percent buy products from them at least a few times a week. Yet 39 percent of those that participated in the survey by Chicago-based research firm Mintel International Group said they agreed with the statement "It is typical that vending machine food is old and stale."

New technologies that make it easier for operators to determine food freshness are likely to help ease those concerns as the product assortment grows.

Michigan State's Kasavana thinks build-to-order products are the next frontier, for everything from sandwiches to ion eyeglasses. He also predicts the industry is not too far away from offering specials, such as a reduced price on chips if you buy a soft drink first.

"Those things are easily within the grasp of the current technology," Kasavana said.

There have been some moves in the build-to-suit direction. A Cafe Diem machine from Automated Products International Ltd., St. Paul, Minn., turns the single-cup coffee machine, first introduced in 1960, into a robotic barista. Customers select their hot beverage formulation and program a number into the machine. In future purchases, they only have to punch in their number to have their personal concoction dispensed.



`On an expense account'

What about machines in business centers that would sell premium chocolates and coffee as well as office products and cell phone chargers to business travelers, wondered Erin Fowler, a Mintel analyst. "They'd be on an expense account so no one would know," she said.

Zoom, the company working with Macy's, also has automated kiosks that sell Sony digital cameras and DVDs and Proactiv skin-care products. Gower Smith, Zoom's CEO and co-founder, sees future applications for health care and wellness products, jewelry and other small, high-value products.

"It's very much in line with the busy lifestyles we're living today," Smith said. "There's a lot of consumers that prefer this type of consumer experience. This is not vending."

Industry consultant John Barsanti agrees that robotic stores have much potential but believes their success will depend on consumer comfort.

"Nintey-nine point nine percent of the time you're going to get what you want, buy you still have jokes about not getting what you want," said Barsanti, a partner at Torridon Cos., Syracuse, N.Y. "People need to be comfortable that if you put your credit card in and want a $50 item, you're going to get that $50 item."

----------

Great moments in vending machine history

215 B.C. Greek mathematician Hero reportedly invents a coin-operated machine to vend sacred water in Egyptian temples. A.D. 1076 Chinese produce coin-operated vendors. 1700s Coin-operated tobacco boxes appear in English taverns. 1886 U.S. grants several patents for coin-operated dispensers. 1888 Thomas Adams company installs Tutti-Frutti gum machines on New York elevated train platforms. 1901 Just-add-hot-water "instant" coffee was invented by Satori Kato of Chicago. 1902 Horn and Hardart Baking Co. opens Automat restaurant in Philadelphia. 1905 U.S. Post Office begins to use stamp vendors. 1926 First commercial cigarette vending machines. 1930s Bottled soft drink machines cooled with ice appear on the market. 1946 Invention of the first coffee vendors leads to use of vending machines for coffee break. 1950 First machines to offer refrigerated sandwiches, expanding lunch menu. 1960 Dollar bill changers arrive, frustrating millions; single-cup coffee vending machines introduced. 1961 Canned soft drink vendors offer customers a new beverage option. 1963 Vending companies begin furnishing microwave ovens to heat refrigerated foods. 1970 Glass-front snack machine introduced by Polyvend. 1978 Water vending machines introduced. 1985 Credit card/debit card devices for vending machines introduced.1988 First bean-grinders introduced in coffee machines. 1992 Bag-in-box syrup containers installed in cold beverage machines. 2005 Shop24 (below) introduces a vending machine that sells more than 200 products, from batteries to eggs. 2006 MooBella introduces a vending machine that can make 96 varieties of ice cream -- to order; In Belgium, a vending machine is tested that would sell beer and wine -- and check your ID.

Sources: National Automatic Merchandising Association, About.com, Informationweek.com, "A History of Science."


Copyright 2006, Chicago Tribune