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Big-ticket vending: Two success stories
Traditionally,
the vending business model works by generating a small amount of profit
on a large volume of items. You don’t make much money on a single candy
bar or package of crackers, but the economy of scale kicks in when you
move thousands of units.
But there is no reason why unattended
selling devices like vending machines cannot be used to move bigger,
higher-margin items. Two companies, San Francisco-based Zoom Systems
and Sacramento-based WebRaiser Technologies Inc., have demonstrated the
potential in increasing the amount of sale while maintaining the
tried-and-true delivery methods.
Case 1: Zoom Robotic Stores
Sometimes,
the solution to an existing problem opens up entirely new vistas of
opportunity. Such was the case with Zoom Systems, the Australian firm
founded in 1998 to distribute ink and toner cartridges to large
corporations and government agencies. Gower Smith, chief executive
officer for Zoom, found himself staring down a major logistical
problem: how to properly route and distribute the myriad brands and
sizes of cartridges to the many different offices in a given facility.
He
went to the drawing board and came back with plans for an automated
supply cabinet that allowed users to select what they needed, when they
needed it. He later patented the design, hooked up with Hewlett-Packard
and in 2000 brought the technology to the United States.
Gower Smith (right) discusses the Zoom Shop with attendees at the 2005 Self-Service & Kiosk Show
But
why stop at ink cartridges? In 2004, the company began development of
the Zoom Robotic Store, the first of which was installed and “opened”
in March 2005.
The product selection in any given Zoom Store will
vary depending on where you see it – consumer electronics, music, gift
and novelty items, or virtually any other product that isn’t
prohibitively large. “We have to be able to deliver an iPod or a candle
or a CD,” Smith said. “All very different shapes.”
Watching a Zoom
Store in action is unquestionably impressive. Consumers browse through
a Web-like storefront via a touchscreen, complete with recommendations
for related products and detailed product information. Upon checkout, a
robotic arm swings into action, fetches the products, and delivers them
to the consumer.
“Zoom Robotic Shops are highly complex machines
with many different integrated components,” Smith added. “That always
presents itself as a challenge. We carefully design and manufacture
them, but then they’re left alone, unattended in airports, shopping
malls and hotels. Ensuring reliability was difficult but critical
before we sent any to market. Successfully achieving consistently
excellent service has been vital to our continued progress.”
And
that progress is moving quickly – Smith said the company will have
installed 100 of the shops by the end of 2005, and he projects a base
of 3,000 by 2007.
“I’m not kidding that people tend to gush when
talking about them, and since many of our customers are business people
in airports, they are enthralled by the idea,” Smith said. “More than
25 percent of customers return to purchase from a Zoom Store again.”
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