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Will Vending Machines be the 'new normal' way of buying post-Covid19?

Updated: Dec 30, 2020

We have still not conquered Covid19 though I sincerely hope and believe that we will soon. However, there will be a ‘new normal’ set across the world in almost all the impacted industries. And Retail will and is one such industry. Immediate new reality.

Impact on Consumer Behaviour

The Coronavirus pandemic and the subsequent lockdown has brought a huge change in our daily lives and behavior. In a few months from now, when the world goes back to travelling, shopping, dining out, working out of offices; will we be doing things the same way we did pre-Covid-19? Few would argue that we will now live in a new reality post Covid. Consumers are likely to cut back on discretionary spending and spend more on essentials like food, grocery and medical. The food industry can see a big change as consumers will be tilted toward home-cooked meals rather than cafes and restaurants.

Impact on Retail

Retail is a vital part of India’s economy. Retail industry contributed ~40% of India’s consumption in 2019 and provided employment to more than 50million people. 50% of the retail in India is accounted for by food and other essentials. The pandemic has put an adverse effect on the retail industry. The monthly business has already declined by 50% in the lockdown period. The cost of business is also likely to increase further by 20–30%. Overall the Indian retail industry can take up to a year to recover from the aftermath of the coronavirus pandemic.

Due to the pandemic‘s impact on consumer behavior and need for minimum contact, e-commerce is expected to witness a significant growth. The online platforms are expected to become indispensable for offline stores, and online–offline service integration is expected to increase. This can also give rise to a new kind of ‘Unmanned’ retail channel which can provide easy and uninterrupted availability of essential food and grocery.

Several self-service technologies have been adopted over the past three months in China to help to fight the virus, according to a press release.

What is Unmanned Retail?

Unmanned Stores/ Automated Convenience Store: Non-existent in India as of now. An unmanned store is a retail concept in which there are no service personnel and no cashiers in the store. The transactions are handled through a mobile application or self-serve cashier. The most popular such stores are known as ‘Smart Vending Machines’.

In India, the concept of vending machines is relatively new; most vending machines operating in the country are being used for institutional sales. Majority of the Vending machines in India are occupied by food and beverages. However, it can create a new distribution channel for many other categories especially in the wake of covid due to the advantage of no human contact while purchasing a product. It also takes limited space and saves the astronomical cost of renting shop space.

Some examples and pics of use-case introduced post covid —

  • Hygiene products (Gloves, sanitiser, masks) in Taiwan, Hongkong, China and Korea

  • Pizza robot-vending machine in US

  • Rice vending machine in Vietnam

  • Fresh farm vending machine in China

  • Touch Free Sanitizer Vending Machine by start-up in India

Local Stores and Covid-19

The importance of local stores is significant in India due to discreet purchase, instant gratification and trust. However, shopping at local retail shops will not be the same. The biggest fear obviously will be of the social distancing as many customers move across the shop. There will be several other questions in the mind like how clean the store or store operator is, or will there be a cashless payment option or not. There will be a significant impact on the supply chain and workforce availability to manage manned stores due to the mass exodus of migrant workers amid the pandemic.

Most people are working from home during the lockdown period and digital connectivity is taking a bigger hold on everyday habits including their biological clock. Consumers will have greater motivations and fewer perceived barriers to actively seek technology-enabled alternatives to assist in everyday tasks like shopping.

Are there enough reasons to think for — Vending Machine may give a new shape to our ‘Local Stores’?

The new normal may push ‘Local Stores’ towards emergence of new-age ‘Unmanned’ retail extensions of their existing stores to adjust to the evolved customer.

  • Social Distancing — Social distancing accelerates digital lifestyles, and human touch is decreasing. Consumers will prefer alternatives which will avoid close contact with other people while shopping. Customers will prioritize retail channels that provide minimal touchpoints hence stores augmented with Vending Machines may be preferred.

  • Focus on Hygiene — While the current level of extreme hygiene levels will not last, most agree there will be permanent changes in personal and public hygiene. Consumers will be seeking greater assurance that the products they buy are free of risk and of the highest quality.

  • Physical + Digital Experience — While we will see huge growth in the online purchase, many consumers would still love the physical experience for the security of knowing what you see is what you get. However, they would like to have this experience keeping social distancing in mind. Consumers will prefer self-checkout rather than assistance from cashiers and buy at their preferred time-zone with readjusted bio-clocks.

Hence Local stores will continue to be playing a vital role, but may upgrade to a new normal.

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