Brave new world of building brands.
“For you sir, a canned coffee. And, for madam, perhaps a nice cold tea.” This is the brave new world of marketing through vending machines and elsewhere. In Japan, at the Tokyo railway station, machines developed by JR East Water Business Co., a subsidiary of railway firm JR East Co., has begun to deploy vending machines with sensors that allow the machine to determine the characteristics of an approaching customer using facial recognition, and then recommend drinks based on a customer’s age and gender–the machine displays the recommended options on a screen rather than have the products visible through a window as in most vending machines today. In Japan, the machine recommends canned coffee to men, for instance, since men tend to like these more. If you are an older man, however, i.e., above 50, the recommendation shifts to green tea. According to a report by Reuters, sales are three times higher at these new vending machines compared to those from regular vending machines.
This technology appears to be gaining traction. Tesco, the UK’s biggest grocer by sales, is experimenting with the technology. Cameras that scan customers to determine their gender and age as they queue at the till to pay are used to target them with the most appropriate point-of-purchase advertising in Tesco’s 450 petrol stations, according to the FT.
This approach, used properly, can potentially benefit manufacturers, distributors, and consumers.
- From the manufacturer’s perspective, one can customize the messaging to be relevant to a specific target segment and match access to specific brands or brand variants much more precisely to individual consumers, thereby reducing costs and increasing revenues and margins.
- From the distributor’s point of view, the vending machine can effectively serve a broader spectrum of consumers as the machine can carry a significantly broader selection of beverages while at the same time keeping the size of the vending machine manageable by selectively displaying a smaller range to any given customer.
- From the consumer’s point of view, by offering a more targeted selection, the consumer can more efficiently choose, since it is well established that offering too large a choice makes the choice task more challenging from the point of view of the consumer. Such technology could also be used to block underage consumers from accessing products meant for adults as the pudding dispensing machine from Kraft Foods below.
Whether the technology will work and how widely it will be adopted remains to be seen, but chances are, it is coming to street corners and retail outlets near you!