Italy: country of saints, poets, navigators of the sea and… vending machine producers! According to Confida, the Italian association of automated retail, 65% of global vending machine production takes place in Italy.
In confirmation of the Latin phrase “nemo propheta in patria” (no man is prophet in his own land), Italy is far from being the main adopter of automated retail technology. The Italian vending machine market, composed by 800 thousand deployed units gaining revenues for a total of €5 billion in 2016, is easily shadowed by countries such as Japan where a population of less than 130 million people (roughly twice the Italian population) has access to 5.6 million vending machines deployed throughout the country. That’s an average of one vending machine for every 23 people.
According to Harrison Jacobs (author of the above linked Business Insider post) the key factors that lead to the success of the automated sales channel in Japan are the following:
• High labour costs
• High population density
• Low criminality rates
• Cash as common payment method
• A sincere passion for automation
That the pro capita distribution of vending machines in Japan has a parallel to the pro capita distribution of pizzerias in Italy is a well-known fact. What people don’t know, is that if current trends won’t change, the new leader in total and pro capita vending machine deployments will be China with 138 million units in operation. One for every ten people. If these were deployed in the US there would be roughly two vending machines for every five Americans.
Until recently, the majority of vending machines were dedicated to the sales of coffee, snacks and soda. With the advent of IoT, the trend is now changing: smart vending machines are now being used as go to market strategy for all kind of products.
It is therefore common to find automated stores containing consumer electronics at airport or fully automated mono branded mini shops in shopping malls.
Traditional retailers and shop owners, are acquiring an increased taste for the potential of the vending machine channel: through this technology a Melbourne based music shop is offering 24/7 supply of guitar strings, plectrums and 9-volt batteries that become precious as gold when urgently needed before a gig. By offering a quality service, the shop owner establishes a stronger bond with local musicians who feel cared after at any time.
Thanks to the growing range of features and the increased connectivity of smart vending machines (we went into further depth in a separate blog post), the quality of the service provided and the purchasing experience are nothing but increasing, bringing benefits that go beyond financials for brands who are adopting this channel.
We will observe an increasing number of smart vending machine deployments in the years to come, even in the most unexpected market segments. A brilliant example of this can be found in Singapore, where a car dealer has created a giant 15 storey tall vending machine that dispenses Ferraris, Lamborghinis and other luxury vehicles.
It’s not by case we have decided to quote two Italian brands that globally stand for brilliancy in Italian engineering: a track of deep footprints towards excellence that we are challenged to follow, although staying within our own sector and play ground.