unattended retail

78 Pages·2017·5.81 MB·English

UNATTENDED RETAIL
TRACKER™
OCTOBER 2017
UNATTENDED RETAIL LESSONS FROM
Caviar Dreams
Beverly Hills Caviar on the highs and lows Carvana opens eight-story See who’s on top
of selling high-end luxury items through car vending machine in the latest
unattended vending machines in Jacksonville, Florida provider rankings
– p. 6 (Feature Story) – p. 11 (News and Trends) – p. 20 (Scorecard)
Unattended Retail TrackerTM
Table of Contents
03
What’s Inside
How unattended retail solutions are being introduced at restaurant and food
services markets, healthcare businesses and university campuses.
06 Feature Story
Five years ago, several Los Angeles-area malls introduced vending machines that
dispensed caviar and other high-end products. Kelly Knight, owner of Beverly Hills
Caviar and designer of the vending machines, speaks with PYMNTS about the
lessons she’s learned dispensing luxury products through unattended retail systems.
11
News and Trends
The latest headlines from around the unattended retail scene.
17
Methodology | Top 20 Rankings
Best of the bunch
Who’s on top and how they got there.
19
Watch List
The newest additions to the Tracker’s Scorecard provider directory
20
Scorecard
The results are in
See this month’s top providers and a directory featuring more than 100
major players in unattended retail.
77
About
Information on PYMNTS.com.
© 2017 PYMNTS.com all rights reserved 2
What’s Inside
Is it time for the fast food market to take cash off In addition to new unattended innovations in the
the menu at unattended service stations? That restaurant and food services industry, the past month
depends on which establishment you ask. saw companies introduce several interesting systems
that could invite big changes to the healthcare,
Restaurant chains around the globe have invested in
automotive and public transportation sectors.
payment systems to make it easier for customers to
go cashless. In the U.S., for instance, Shake Shack is Here are some notable recent developments from
experimenting with a cashless kiosk at a New York the world of unattended retail:
City location that allows consumers to place orders Based on recent developments, it appears the
from either the kiosk or a mobile device. Meanwhile, automotive industry is particularly revved up about
in China, KFC introduced a new feature that is bound adopting unattended solutions for vehicle sales.
to put a smile on customer’s faces — if they want to
In the U.S., online marketplace Carvana installed a
pay for their orders, that is. The “smile to pay” feature,
new, eight-story unattended car vending machine in
developed by Alibaba’s parent company Ant Financial,
Jacksonville, Florida, allowing customers to pick up
uses a 3D camera to scan a customer’s face to verify
their vehicles from the vending machine using an
his or her identity for a purchase.
oversized coin.
But, not all companies are ready to throw in the towel
And Florida isn’t the only market getting into
on cash payments. Noting that cash is still widely
unattended automotive sales. In China, business-
used at quick service restaurants (QSRs), some
to-consumer (B2C) shopping site Tmall announced
food service companies will continue to allow cash
plans to launch its own vehicle vending machine that
usage to avoid alienating customers who prefer
would enable customers to complete the vehicle
the payment method. In fact, at the Foodservice
purchase process from their smartphones and pick
Technology Conference (FSTECH) trade show last
those vehicles up at the kiosk.
month, cash technology solutions provider Glory and
digital kiosk manufacturer Acrelec showcased their
In the U.K., the student union at Reading University
self-ordering kiosk — a solution that accepts both
was recently fitted with a self-serve, 16-tap beer
cash and card payments — to help restaurateurs keep
wall allowing students to select beverages and pay
their cash registers.
for them using payment cards or mobile wallets.
© 2017 PYMNTS.com all rights reserved 3
What’s Inside
Technology manufacturer Drink Command said the October Unattended Retail Tracker updates
service offers students the ability to pour and pay The PYMNTS.com Unattended Retail Tracker™
for their own drinks, freeing up space and improving serves as a bimonthly framework for the unattended
services in nearby pubs and taverns. retail space, offering coverage of the most recent
news and trends. It also contains a provider
Drug store chain CVS Pharmacy recently launched its
directory highlighting the players contributing to the
own automated retail solution in the Northeast U.S.
innovations taking place in the expansive unattended
The company plans to install 25 unattended kiosks
retail ecosystem.
selling more than 70 products — ranging from aspirin,
health and beauty items to battery chargers — in The October edition of the Tracker includes nine new
high-traffic locations across New England. These additions to the provider directory: Box Technologies,
locations, the company says, will include airports, Cammax, CSA, Drink Command, Meridian, Mr Lee’s
college campuses, public transportation stations and Noodles Company, Olea Kiosks, Sir Steward and
office parks. Swyft.
Unattended retail solutions for the well-to-do The included companies are thoroughly evaluated
Can unattended retail give younger consumers and assigned scores based on markets served,
a taste of luxury living? Since 2012, a handful of technology solutions offered, acceptance of various
shopping malls in the Los Angeles area have offered payment methods and security standards achieved.
vending machines that dispense high-end culinary
We hope you enjoy this Tracker, and we welcome your
items like caviar, truffles and gourmet salts. PYMNTS
feedback. Please keep us informed of what you like,
recently interviewed Beverly Hills Caviar’s owner, Kelly
which providers we may be missing and how we can
Knight — who designed the machine specifically to
make this bimonthly report better by emailing us at
hold and dispense its featured offering of caviar —
[email protected].
about her experience providing luxury items through
unattended retail solutions.
© 2017 PYMNTS.com all rights reserved 4
What’s Inside
4.06% Percentage of the anticipated CAGR of the global
passenger ticket vending machine market from
2017 to 2021.
2
Projected number of active ATMs
mILLION in the Asia-Pacific region by 2022.
5
Five

66% Percentage of survey respondents who
Fast
described self-service checkout systems as
“easy to use.”
Facts
400,000 Projected number of self-checkout units
expected to be in use globally by 2022,
a 53 percent increase from current levels.
52% Percentage of U.S. adults who prefer to use
payment cards for lower-cost items sold at
vending machines if there is no charge.
© 2017 PYMNTS.com all rights reserved 5
Unattended Retail Lessons
From Caviar Dreams
© 2017 PYMNTS.com all rights reserved 6
“I never wanted to specialize in mechanical
Feature
engineering or robotics, but I ended up learning it.”
Story
Kelly Knight,
owner of Beverly Hills Caviar and designer of the vending machines
Travelers who visit many airports, college opulent delicacies including various caviar options,
campuses or shopping malls are bound to escargot, Italian truffles and gourmet salts, as well
find vending machines dispensing the usual as accoutrements like mother of pearl plates and
fare, such as sodas, snacks and candy. Those who spoons. And, yes, the machine also dispenses caviar
travel to some of the wealthier parts of the world, for pets — of course.
however, will discover the well-to-do have much more
In addition to its vending machines, Beverly Hills
expensive unattended retail tastes.
Caviar also sells caviar online. The caviar comes
In fact, in various global markets, high-end luxury from several global markets, including Belgium,
items can be purchased from both ATMs and Canada, China, France, Germany, Italy, Peru, South
unattended machines. Consumers can find a vending Korea, Spain and the U.S.
machine dispensing gold bars and coins at a five-star
PYMNTS recently spoke with the company’s
UAE hotel. Meanwhile, a 15-story structure packed
owner, Kelly Knight, about her efforts to develop
with exotic cars such as Ferraris, Porsches and
the vending machine technology, her experience
Bentleys — all for sale in an unattended luxury car
offering caviar through unattended retail solutions
vending machine — opened in Singapore earlier this
and issues around accepting payments for high-end
year.
transactions.
A few years ago, U.S. shoppers got their own
Hatching a new idea to dispense fish eggs
taste of unattended luxury retail when vending
Knight’s family has been in the caviar industry
machines dispensing caviar were installed in
for several generations, dating as far back as the
several Los Angeles-area malls. The machines,
formation of the Soviet Union. When she took over
developed by Beverly Hills Caviar, a California-based
her family’s company, she decided to modernize
international supplier of high-end fish eggs, offer
© 2017 PYMNTS.com all rights reserved 7
Feature Story
the business by selling caviar online in 2001. While “I never wanted to specialize in mechanical
Knight wanted to maintain a physical location, engineering or robotics, but I ended up learning it,”
she determined that maintaining the company’s she said. “I already spent the money making it, so I
existing brick-and-mortar store was no longer cost- had to keep it going.”
effective as someone would have to be on-site to
sell products. As such, Beverly Hills Caviar closed its
physical location.
Knight saw vending machine technology as a way
to both shake up the caviar market through newer
technology and reduce the overhead costs of a
physical retail location. Existing vending machine
technology would not support the temperature
requirements to store caviar and ensure it was kept
fresh, however.
“You can put caviar into a vending machine but, the
question is, how do you guarantee the caviar will be
good when people are purchasing it?” Knight asked.
“Caviar is a high-end and expensive item, and our
customers expect good products.”
Serving up a new spin on caviar
In 2012, the company’s caviar vending machines
To address this problem, Knight, who has a
made their debut in three Los Angeles-area malls:
background in computer science and business,
Westfield Century City, Westfield Topanga and
designed a caviar-specific vending machine herself.
Burbank Town Center. Prices range from 10 dollars
Working with a team of builders, she created a
per ounce for the company’s Wasabi Tobiko Caviar to
machine that both dispenses caviar and refrigerates
as high as 500 dollars per ounce for Beluga Caviar.
it properly. It is also equipped with sensors to provide
Knight declined to disclose a specific amount, but
real-time temperature monitoring and trigger alerts
said the machines have helped Beverly Hills Caviar
to the company if levels rise above or drop below
take in “a few hundred thousand” dollars in the five
prescribed ranges.
years they have been operational.
Due to customer expectations and the specific
The machines, Knight said, made quite a splash with
requirements involved in storing caviar, Knight said
shoppers upon in-malls arrivals. In some cases, the
she was determined to oversee the construction
machines even introduced caviar to shoppers for the
of her vending machine to make sure it was done
first time, she said.
correctly. She also ensured she knew how to make
repairs to the caviar dispensing machine in case it
“Even though [some] people didn’t know what caviar
needed maintenance.
was, they clicked on the machine because they
© 2017 PYMNTS.com all rights reserved 8
Feature Story
were interested to see what it was selling,” Knight [customer] got their merchandise.”
explained. “People who [had] never had caviar in their
On top of that, these chargebacks also come with
life [before] ended up buying it from the machine,
fees that add to the toll of lost inventory and lost
filming it and sharing it on social media.”
sales.
Those social media likes and retweets helped raise
To avoid losing merchandise and chargebacks,
the vending machine’s profile and, in turn, boosted
Knight said the company decided to limit its accepted
interest in Beverly Hills Caviar’s eCommerce
payment methods to cash only. While the move
business. It also helped the company attract the
helped protect the company’s assets and revenues,
attention and interest of younger consumers, who
she noted the decision also prevented it from
might not have considered purchasing caviar before
achieving further growth.
encountering a caviar vending machine. For the
company, consumer interaction with the machine
By moving to a cash-only payment option, Beverly
highlighted generational differences in how older and
Hills Caviar was only able to sell its products to
younger consumers react to purchasing unattended
caviar.
“We saw the majority of our shoppers were younger,”
Knight reflected. “Older people, I would say over 50 or Because it’s
60, would not consider going to a vending machine
an unattended
and buying [caviar].”
retail location,
The machines also created buzz for the company,
helped in part by making a cameo appearance on
the credit card
Bravo’s reality show “Shahs of Sunset.”
companies will
Trouble with chargebacks
But, Knight has also learned that not all payment not stand behind
methods work well for high-end products dispensed
the payment.
from unattended retail systems. In particular, she
found accepting credit and debit cards as payment
methods became costly for the company because
some consumers would dispute the charge and
Knight would end up paying a hefty price.
customers who were carrying large quantities of cash
“Because it’s an unattended retail location, the credit
— and who were willing to part with it. While the move
card companies will not stand behind the payment,”
helped the company avoid chargebacks, it also added
Knight said. “When you have a caviar chargeback for
a level of inconvenience by requiring consumers to
$1,000, because it’s an unattended retail location, you
stand by the machine inserting bill after bill, as one of
will have to give all that money back even though the
© 2017 PYMNTS.com all rights reserved 9
Feature Story
the “Shahs of Sunset” stars did, to make their caviar to wealthy clients. On one occasion, she brought
purchases. the machine to a billionaire’s yacht and on another
it was rented for an Oscar party aboard an airplane.
“The main reason that our machine didn’t grow
According to Knight, the purchase function can be
exponentially is because we only accepted cash,”
switched off during private rentals if the client wishes
Knight admitted.
to do so.
While mobile payment solutions such as Apple Pay
require customers to use biometrics like fingerprints
to authorize payments, Knight said she believes
these solutions will not make enough of a difference
for her unattended business because consumers
can still fight charges. Instead, she said, credit
card companies need to adjust their policies to
accommodate high-end merchandise, like caviar,
being sold at unattended venues.
“I am looking forward to [when] credit companies
such as Visa, Mastercard, American Express and
Discover change their ‘unattended retail’ policies so
that expensive items can be safely sold in vending
machines, without chargebacks,” she said.
A rent dispute and resolution Knight told PYMNTS she had since resolved her
Recently, Beverly Hills Caviar machine customers dispute with mall operators and agreed to let the
were met with disappointment when they visited caviar vending machines return to the Los Angeles
the mall with intentions of ponying up big bucks for malls for a limited time. Under new terms with the
Beluga caviar. In September, the company decided to malls, Knight has agreed to pay rent for November
pull the vending machines from the malls where they and December — the company’s busiest time of the
had been deployed, and all due to a dispute with mall year. She is happy with the arrangement because she
operators over whether it should be paying rent. does not have to sign a long-term contract and will be
able to place the machines in public spaces during
Knight argued the machines had become tourist the holiday shopping season.
attractions because they generated publicity and
were thus attracting shoppers and business to the For those who have dreams of living the high life
malls. As such, she saw no reason why Beverly Hills but have yet to strike it rich, the machines, which
Caviar should pay rent to occupy mall space. will soon be back in the L.A. area malls, can offer an
unattended taste of how the other side lives.
During the dispute with the malls, Knight said she
still made use of the machines by renting them out
© 2017 PYMNTS.com all rights reserved 10