Vending Machines Are The Latest Threat To US Retailers

US retailers just can’t catch a break.

In a bid to undercut US-based brands, “fast fashion” purveyor Uniqlo announced this week that it will begin selling its clothes in vending machines, a common practice in Japan, where Uniqlo’s owner, Fast Retailing Co., is based. All told, the company plans to open 10 machines in and around New York City, Oakland and Houston, according to MarketWatch’s Ali Malito, who reported that brands are increasingly selling consumer goods like clothing out of vending machines as part of a “growing trend” as they “look for new ways to sell their goods" amid a flood of brick-and-mortar bankruptcies.

“There’s no hassle,” consumer shopping expert Andrea Woroch told Malito. “You get what you want.”

However, this latest wave of innovation in the retail space threatens to leave US firms flat-footed if the fail to quickly adapt, just like many now-dead companies who failed to anticipate the rise of Amazon.com and e-commerce more broadly.

In the US, vending machines are a $7 billion-a-year business, although sales have been flat in recent years, according to industry-research group IBISWorld, as consumers increasingly prefer healthier snacks and beverages than the potato chips and soda that consumers typically associate with vending-machine sales. According to Euromonitor data cited by MarketWatch, the US vending-machine market is closer to $5 billion a year in sales, the third-largest behind No. 2 Spain ($8 billion) and No. 1 Japan ($26 billion).

In recent years, vending machines have been popping up in the US that sell a range of nontraditional items, including guitar accessories, bike parts, Lego toys, caviar, pet food, umbrellas, socks, shoes, envelopes, cosmetics, gold and even – in the states where it has been legalized – marijuana, according to MarketWatch.

“Food and beverages still make up most vending machine sales — each accounting for roughly one-third of sales — while movies and games made up 29% of the industry, followed by 6% for other products including electronics, magazines, toys, condoms, first-aid products and cosmetics, IBISWorld found. Still, food vending machines no longer just offer Pringles and pretzels. Sprinkles, a bakery in New York, has a “Cupcake ATM” for passersby in the mood for a treat, and another bakery, in Cedar Creek, Texas, has a vending machine for its full-sized pecan pies.”

A “vending machine” for luxury cars opened earlier this year in Singapore. The “machine” is a revamped office building that allows wealthy collectors to pay in cash and drive off in their new car with minimal hassle. Luxury goods brands appear to be seizing on the vending-machine model more quickly than their downmarket peers, as MarketWatch explains…

“Champagne company Moët and Chandon also has vending machines, which hold 320 mini-bottles of its champagne. The first such machine launched in London last year and they are now available in Las Vegas and New Orleans. Companies even sell cars through vending machines - there’s already one in Singapore automotive division of Alibaba Group-owned shopping site Tmall hopes to bring one to China — not to be confused with vending machines in cars, which Uber has introduced in partnership with tech startup Cargo.”

As a gathering wave of brick-and-mortar closures and bankruptcies force brands to innovate, low-cost vending machines are looking increasingly attractive. However, Uniqlo must still find a way to surmount customer-service obstacles like allowing customers to try on clothes before buying, and enabling them to easily return their purchases.

“Because it’s cheaper for companies to sell from a machine instead of paying for rent and employees, Woroch said the variety of machines will keep growing. But they aren’t always the best option for shopping. Using them takes away most of the customer service element, since there’s no one to ask for help in sizing and product information, and no easy way to try or return the item back to the vending machine, Woroch said. And even with online shopping becoming more of a go-to option for consumers, shoppers still want that extra help, which is why so many more companies have chat boxes, she added.”

As we recently reported, retail bankruptcies surged 110% during the first half of 2017, accounting for some $6 billion in debt, even as the overall high-yield default rate tumbled to 1.9% in the same period from 2.2% at the end of June as $4.7 billion of defaulted debt, mostly in the energy sector, rolled out of the default universe. Overall high-yield default rate tumbled to 1.9% in the same period from 2.2% at the end of June as $4.7 billion of defaulted debt - mostly in the energy sector - rolled out of the default universe.

Comments

CRM114 Fri, 08/04/2017 - 22:00 Permalink

Vending machines are dead. The fact is they are a nightmare if for any reason they don't deliver the goods. "I'm sorry, we can't do refunds. You'll have to write to the address on the machine, in triplicate, in dragon's blood. They'll usually get back to you within a decade, denying everything and blaming you for tilting the machine."Nobody needs the hassle.

Mr 9x19 kieran1968 Sat, 08/05/2017 - 06:51 Permalink

the whole point of machinery and automatisation is : human -> machine          machine -> human for maintenance                   maintenance machine -> human to make maintenance of maintenanceetc it is a no ending,  who build robots... ? human. then ? robots making robots actually. but who made the builder..? humans... you want to get full employment, start by destroy all those fucking robotic craps and let the social relationship come back

In reply to by kieran1968

Mazzy Mr 9x19 Sat, 08/05/2017 - 09:46 Permalink

That's a bunch of LUDITE nonsense.It's like saying if you want a job as a letter writer or a typesetter you should destroy all personal computers.If you want a job you need to survive, adapt, figure it the fuck out, scrimp & save, be responsible, and above all: become a QUALITY human being rather than a degenerate turd.

In reply to by Mr 9x19

SmokeOrMirrors El Oregonian Sat, 08/05/2017 - 10:27 Permalink

With advances in 3d-printing its foreseeable that the machine will be able to manufacture a custom item on the spot while you wait.  Maybe it would even be able to scan your foot and create a shoe your exact size...  or other things... who knows ?  ( in another generation or two of course )  after all to quote one of my favorite radio hosts "  This is America,  where we get what we want,  when we want it,  and lots of it.  "

In reply to by El Oregonian

peddling-fiction armada (not verified) Sat, 08/05/2017 - 09:29 Permalink

Early Christians that were taught by Jesus knew that we reincarnated. That is why cross-racial marriage was not allowed before, because the spirit (soul) leaves the body upon death, and finds a new host to give life to. Thus your spirit upon death would find a suitable father and mother, typically within your own tribe, and stick around. So the original chosen ones were 144,000 spirits that have long since moved along, and are scattered all over the world. Very few chosen spirits are in (((tribe))) members anymore, and they would be despised by the Zionists.Only good message here, is that most of (((them))) are really goyim, meaning not being a chosen one, a foreigner.

In reply to by armada (not verified)

Anon2017 bluskyes Sat, 08/05/2017 - 12:17 Permalink

While HP was raising the price of its cartridges to nose bleed levels, the price of laser printers was coming down. I replaced my HP ink jet printer with a Brother laser printer in late 2010 and I'm very pleased with the results. It prints faster, costs less per page to operate and rarely malfunctions. Another American icon bites the dust. I suggest that users replace their HP ink jet printer with an inexpensive laser printer.

In reply to by bluskyes

HardlyZero Anon2017 Sat, 08/05/2017 - 13:23 Permalink

Ink is difficult to handle reloads (so I end up paying premium),  but laser toner refill is very cheap and can get 2 or 3 'run' from a new HP laser.  Then there are also the page counter chips...on the new models.  The old HP laser models w/o counter chips seem to keep working over 20 years now.  Keeping older models in rotation helps, if you can have a few options and the desk space.

In reply to by Anon2017

NoDebt Fri, 08/04/2017 - 21:59 Permalink

"must still find a way to surmount customer-service obstacles like allowing customers to try on clothes before buying, and enabling them to easily return their purchases."Fuck that shit.  But a goddammed shirt, motherfuckers!  If it doesn't fit, throw it out and buy another.  They only cost like $2 each.  Why you being such a fucking tight-wad?  We need the fucking GDP!  SPEND IT you fucking cheapskate dirt bags!(Damn, I really should stay away from marketing.  My bedside manner leaves a lot to be desired.) 

CRM114 NoDebt Fri, 08/04/2017 - 22:09 Permalink

Anyone who buys an egg salad sandwich from a gas station deserves what they get.I bet they only sell them at the gas stations with the outside washroom, that's 3/4 way round the building in some dark corner.And then the key doesn't fit.At which point the egg salad sandwich wins.

In reply to by NoDebt

NoDebt CRM114 Fri, 08/04/2017 - 22:11 Permalink

Just wait till you buy a shirt from one of my gas station vending machines.  Slightly used, mild pit stains, collar too small, arms too long.  You don't know who to sue when that "egg salad sandwich" makes you violently ill, how you gonna figure out who to sue when my vending machine shirt doesn't fit you right? 

In reply to by CRM114