A Vending Machine for iPods?

(AP Photo)

As U.S. Consumers Get Comfortable Paying With Plastic, Automated Sale Terminals Are Selling Much More Than Soda

By CHRISTIAN LUPSA

Jan. 21, 2007 — Old-school vending machines, bulky bastions of high-calorie snacks and sodas, meet your new-school challenger: chic, upscale gadgets stocked with consumer electronics and pricey cosmetics.

As more of these machines pop up in high-traffic areas such as airports, the old quarter-chuggers may someday find themselves outvended.

The new vending machines sell iPods, cell phones, USB drives, headphones, DVDs, and a host of other gadgets.

This latest development in the $30 billion-a-year vending industry — a figure that only includes food and beverage sales — is a natural outgrowth of consumer clamor for control and round-the-clock convenience, say industry observers.

Pushing this trend are the computerization and networking of machines, as well as growing consumer confidence in cash alternatives. To put it another way, the more Americans are willing to swipe their transactions, the better vending does.

"Automated retail is in the midst of an explosion," says Michael Kasavana, a professor specializing in vending commerce at Michigan State University. "Self-service applications have become prevalent in all aspects of business, especially where labor costs have become excessive."

As the executive vice president for Zoom Systems, a vending machine seller in San Francisco, Mark Mullins loves automated retail.

Self-checkout aisles at grocery stores, ticket kiosks, vending machines — you name it — if Mullins can control it, he'll fiddle with it in no time.

"Anything that's automated, I say 'Let's give it a try,'" he says.

American society has given birth to "Generation P" (for plastic), says Kasavana, and paying with plastic is good business for Mullins. A Zoom machine in the Atlanta airport recently sold in the neighborhood of $50,000 in merchandise, Mullins says, without revealing the actual figure.

Before vending machines could expand into high-tech products, they had to overcome three roadblocks:

Gravity: Most machines drop sodas and snack foods several feet before a consumer can access them. But who wants to watch a $350 music player go through the same experience? Today's machines are equipped with robotic arms, conveyor belts and baskets. No more drops.

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