Vending machines make a massive industry, one that generated €14.6 billion in total revenue in Europe during 2015. They’re everywhere, ready to dish out a chocolate bar, whip up a cup of warm coffee, or dispense cold beverage.
The presence of these machines hardly catches our attention, yet people easily notice when their go-to machine is not in its usual spot.
Vending machines may not engage in small talk like living salespeople do, but convenience and fast service are at their core, making them near-indispensable.
On the other hand, these machines wouldn’t have remained relevant if it wasn’t for constantly changing customer-centric technology beneath the housing.
Come with us as we take you all the way back to the first century for a quick tour of vending technology’s history.
Hero was the Thomas Edison of the ancient world. Living in Alexandria, Egypt, and a dedicated pupil of the Greek inventor and mathematician Ctesibius, Hero spent his days building and tinkering machines well ahead of his time.
Hero has a long list of inventions under his name:
A wind-powered organ, a steam-powered device called the aeolipile, the world’s first programmable robot, the Automaton, and many more!
But perhaps his most enduring invention was the first and perhaps only coin-operated holy water dispenser.
The ancient machine used a balance beam and coin slots to deliver spiritual refreshment.
The inserted coin hits one end of the beam, causing the other to lift, draw a plug off of a pipe, and allow water to flow. The plug is slowly put back in place and stops the flow as the beam regains equilibrium.
Hero categorizes his inventions as either practical or fantastic.
He may or may not have thought much of the machine in terms of practicality. But he sure would be proud to see the holy water dispenser become the precursor to modern vending machines.
For thousands of years, Hero’s ancient creation stayed untouched.
No one else bothered with vending devices until the 1800s, when bookseller Robert Carlile installed a book vending machine while Simeon Denham got the British Patent No. 706 for his stamp dispensing machine.
But only a few decades after their introduction to the public, vending machines became a standard fixture wherever people went - from airports, train stations, shopping centres, to universities and many more in between.
The variety of items sold through these electro-mechanical dispensers grew to epic proportions. What started as a stamp and book vending machines soon sold cigarettes, office supplies, and gumballs. Today, softdrinks, coffee, sandwiches, and even healthy snacks are a staple in vending machines.
Turns out just about every component of the vending machine - the contents, packaging of the goods, delivery method, and housing - are easy to customize. All except for the payment system.
The machines have a hard time validating payment and identifying the amount of money put into them, especially cash payments.
The 1990s saw machines use low-resolution digital cameras and mechanised scanners to validate paper money. These options are more reliable than older ways of authentication, but they still can’t verify crumpled bills!
With coins, on the other hand, vending machines can easily identify counterfeits. Coins in different denominations have a set amount of ridges, a feature invented by Isaac Newton to prevent theft and fraud. And most machines can recognize the ridges to determine the amount of money inserted.
The only problem?
The vending industry’s reliance on coins can delay certain government proceedings, in particular, the issuance of new coins.
Back in 2012, Automatic Vending Association campaigned against the introduction of new and thicker 5p’s and 10p’s. Accuracy was the main issue as many of the machines can no longer use weight to help verify the coins.
Fortunately, the number of vending machines that take cashless payments are now growing in numbers.
Machines started accepting card payments in 2006. In the United States, MasterCard spearheaded the big move to cashless vending. In a week, the card company rolled out thousands of machines that can process transactions using credit and debit cards.
Modern vending machines have grown increasingly better during the recent years in the payment processing department. Not only can you pay with coins, paper money, and cards, but you can use your smartphone now, too!
Sandwiches, crisps, sodas, and hot beverages are some of the most popular offerings in today’s vending machines.
But the previous decade saw these automated dispensers cross beyond snacks and into industries that people normally don’t associate with vending.
The UK Government spent £4 million to install methadone vending machines in prisons across the country.
Methadone is a prescription drug used to wean addicted people off of heroin while reducing withdrawal symptoms. To ensure the drug goes to the right person, the vending machine uses a biomarker - either an iris scan or a fingerprint - to deliver a personalized dose.
From the other side of the globe, the Taipei-based software company IDEAS developed a vending machine capable of giving lifestyle and grooming advice to shoppers.
The machine can assess a male’s baldness and facial hair using a built-in camera with facial recognition technology. It then recommends hair tonics and razors based on its findings. Not only that, it also recommends beauty products to women and healthy drinks to the elderly.
Retailers have also turned to vending for securely selling higher ticket items.
Closed, a jeans brand based in Hamburg, installed a designer jeans vending machine in Florence, Italy in 2009. The idea was to install similar machines across airports and train stations, allowing rushing travelers to grab a pair of clean pants minus the waiting.
A year later, an online gold shop based in Germany introduced Gold-To-Go in the United States.
First installed in Abu Dhabi’s Emirates Palace hotel, Gold-To-Go is a vending machine that sells over 300 different gold items, including 10-gram bars and customised coins. And to make sure the sellers turn a profit, the machine adjusts its prices depending on the market value every 10 minutes via the internet.
Theft is a big problem when selling expensive pairs of jeans or gold bullion in a brick-and-mortar shop. But thanks to the robust and theft-proof design of today’s vending machines, getting these high-priced items to customers has become easier and safer.
Food and drinks continue to dominate vending.
However, expect to see more high-priced goods to sell through vending machines as more brands start to realize how they can cater to a business’ security concerns and consumers’ desire for 24/7 convenience.
Coke’s Freestyle vending machines look sleek and sophisticated - but nothing special.
On the surface, the Freestyle has a touchscreen interface, a nozzle for dispensing liquid, 165 different Coca-Cola drinks customised flavors - and that’s it. Looking under the hood, however, you will find a machine powered by the Internet of Things (IoT).
In a nutshell, the IoT is a humongous network of devices connected via the internet. This connection makes exchanging and collecting information between devices a breeze, while allowing for remote access.
Coke’s Freestyle does more than just dispense cold drinks. The network connectivity of the vending machines let Coke identify and keep track of each unit, including the inventory, levels of wear and tear, and the health of the sensors.
Operators can also monitor trends, drinking preferences of customers, perform real-time marketing tests, and adjust the drinks on offer based on the results.
Customers get their fill of Coca-Cola drinks at any time of the day because the operators get the right information for maintenance and supply at the right time.
The advent of the Internet of Things revolutionised many industries including healthcare, transportation, and personal security. And in the vending space, IoT’s impact is game-changing.
Here at CafePoint, our vending machines take full advantage of the IoT to bring a seamless experience both to operators and customers. Our machines let you:
And many more!
Want to learn more about vending machines and their passive income potential? Talk to us! We’d be more than happy to help.