June 15, 2021
Food industry is developing and with spending strength increasing and growth in the millennial population, consumers are moving towards 6-meals-a-day focusing on nutrition and health.
The smartphone consumer has multiple online options based on their location, basket size, and time of consumption. However, for impulse purchase items, read-to-eat, or quick meals under ₹99 order value, both food delivery and grocery-app are either expensive or time-consuming.
Food delivery takes up to 40 minutes and ₹40 per delivery, while Grocery delivery is free ₹500 basket-size, but delivers the next day. Hence, Vending Machines or Smart Kiosks within 200 meters of a customer becomes an immediate preferred option once made available.
Retail has been an evergreen sector in India since independence. Mom-n-Pop or Kirana stores have seen huge growth but were unable to scale their business beyond a certain geographical area. Further, these stores face challenges in the post covid world with a lack of 24*7, contactless infrastructure.
Smart Vending Machines and Micro-market based solutions are poised to create an efficient distribution channel if scaled with technology-first approach.
Challenges of traditional vending machines and tuck shops
Vending Machines are not new in India, however, cash operated manual machines found mainly at airports, large offices, had only 7Cs (chocolates, chips, cookies, cakes, colas, candies, cuppa) of packaged foods.
Since the evolving customer has higher expectations and wider options to buy from, innovation was required both in the technology and assortment, to capture the consumer mind-space and to grow the sector. Traditional vending machines lack a transactional platform to enable digital payments, user engagement, and remote management.
SWOT of IoT vending machines for packaged food
With social distancing and contactless buying becoming a norm, unmanned kiosks play an important role in achieving these objectives. With the Internet of things and digital payments, smart vending machines are providing more interactive, easy-to-use, and fast shopping experiences.
Due to rapid urbanization, the growth of digital and cashless payments systems and awareness for safe buying options have led to a substantial increase in demand for IoT-enabled vending machines in India.
Strengths: Micro-transactional platform for unmanned kiosks with contactless experience, digital payments, cloud kitchens, D2C brands and tiffin services can sell their products in the most efficient, convenient with instant fulfillment even for under ₹99 items.
Weakness: Vending Machines are designed for small units/ single & standard pack-size products. Though with periodic innovation around form-factor and packaging, brands are working to overcome this.
Opportunities: COVID has moved us towards adopting a healthier and hygiene-driven lifestyle. Unmanned Retail or Vending machines are a great technology to make it possible.
Threat: Food restaurants and tuck shop owners have been affected badly by COVID19. They may be a threat to unmanned options or they may embrace it to start investing in IoT-enabled vending machines in their cities.
The outbreak of COVID-19 has opened the space for smart and contactless unmanned retail-tech innovations. Hence, the significance of technology driven and new age vending machines have increased amid the grim situation owing to the pandemic. Certainly, consumers will continue to upgrade themselves by using new and innovative technologies in their day-to-day lives.