Self-Service, Digital Transformation, and Vending Machines
Coin to Code: The Unsung Heroes of Self-Service Retail
Today, a self-checkout kiosk has a digital screen and almost limitless capabilities, but let’s not forget how this all started. If you’re sitting in an office or commercial building right now take a look in the hallway. Chances are there are one or two large, buzzing machines containing delicious treats or frosty cold sodas.
A History of Convenience
The first known commercial use of vending machines was in 1888. A vending box was used to distribute tobacco in England and later in American colonies. It was a simple design that required a coin to open the lid.
In the early 19th century this design was modified to sell chewing gum on New York trains and modified again to sell soft drinks in 1937. Changing this self-service machine to a soft drink vending machine required refrigeration, and thus the technological advancements of self-service began.
Now let’s consider how vending machines pioneered the way for modern self-checkout kiosks.
Automated Transactions:
Vending machines set a precedent that transactions could be 100% automated. Other than the service and upkeep of the machine, these transactions can be done without seller involvement. This is good for the seller since it reduces the labor cost involved significantly. Additionally, automated transactions don’t require hiring and training, so it eliminates the heavy reliance on a positive labor market to staff locations.
Consumer expectations:
The idea of selecting your product, paying for it, and being on your way without having to interact with anyone is no longer an exception, it’s the norm for consumers. For example, it’s not uncommon to walk into a grocery store and see a longer line at the self-checkout stations than at the cashier. This phenomenon is not only seen in the rise of self-checkout stations for groceries, but also in online shopping, self-service markets, restaurant ordering, and more.
Digitization
As our money changed, so did vending machines. Consumers needed the option to pay with a credit card or cash. Now with tap cards, Apple Pay, various payment apps, and contactless markets, the idea of inserting your money into a machine is being evolved altogether.
Add Some AI
This is where the machine portion ends and the intelligence part begins. There are several ways artificial intelligence has evolved self-checkout beyond the vending machine.
Machine Vision:
A typical self-checkout machine will require a customer to select items that don’t have a barcode from a menu. Machine vision evolves this in two ways: security and object identification. If a customer selects an orange from the menu when checking out a nectarine, the attendant may not notice. They are a similar shape and color. However, machine eyes do notice. The cost difference may only be a few cents but a few cents per customer, per store, per day can really add up fast. The use of machine vision to identify these objects can save stores millions of dollars each year.
Deep Learning and Advertising:
Retargeting and loyalty programs are just the beginning. Intelligent suggestions can be catered on checkout based on the items being purchased. Tying a customer’s behavior to a phone number assumes one household doesn’t all use the same number for loyalty points. Why wouldn’t they, that’s how you get the most points? By analyzing the items in cart a neural network can use this to offer coupons and discounts or serve advertisements based on the expectation of the customer’s needs, brand preference, etc.
Conclusion
More can be done with less when you remove humans from the equation. What began as a simple idea and a locked brass box has transformed into a self-service idea with limitless potential and applications both online and in-person.