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Issue Date: Vol. 53, No. 5, May 2013, Posted On: 6/4/2013


Dispensing The Sizzle: Custom-Built Vending Machines Become Marketing Stars


Emily Jed
Emily@vendingtimes.net
TAGS: vending, vending machine, marketing, national brands, automatic retailing, Innovative Vending Solutions, social media vending, Patrick McDonald, Jeff Thibodeau, robotic retail, eye-catching kiosk, Luna nutrition bars, Luna Vending Machine, digital signage, twitter vending machine, facial recognition, touchscreen vending machine, Conan O'Brien vending machine, Google Wallet, Engadget, vending Samsung smartphones, Bare Essentials


Marketers of big national brands are turning to automatic retailing as an eye-catching, engaging new vehicle to sell their sizzle. Innovative Vending Solutions of Dayton, OH, has positioned itself as a go-to resource for high-impact machines that draw consumers, give away samples and even take the buzz around their brands "viral" through social media.

"What we do is all about customer interaction to build a brand and an image, not just placing machines and selling product," said IVS founder Patrick McDonald. "We create machines that jump up and down and attract customers to use them. Our solutions help our clients build brand awareness and expand into untapped markets, with minimal investment and low cost of entry, by using automatic retailing's full capabilities in different ways for different applications."


Innovative Vending Solutions

LEADING THE CHARGE: Innovative Vending Solutions founders Patrick McDonald (left), president and Jeff Thibodeau, vice-president, ready their latest robotic retailer for deployment. It's an eye-catching kiosk that can vend small necessities such as batteries.


Beginning this month, for example, the makers of Luna nutrition bars are making a splash in some of the nation's biggest cities with high-impact, branded venders developed by IVS that tie in with an interactive Facebook contest called "Feed Your Strength...at Work!" It kicked off on May 1 and runs through June 30; it's designed to inspire its target female audience to eat Luna bars as a healthy snack alternative in the workplace.

As part of the two-month campaign, the Luna machines are touring the country, hitting high-traffic events in New York City, Chicago, San Francisco, Los Angeles, San Diego and Austin, TX.

Luna Vending Machine, digital signage To enter the contest, machine visitors are prompted by the touchscreen interface to post photos and descriptions to the contest's Facebook page, showcasing the healthy changes they are making in their workplaces. The two winners will get to host a vending machine at their workplace, filled with complimentary Luna bars. Its digital display will feature nutrition tips and guidance on "snacking positively" throughout the work day.

Over the five years since its launch, IVS has benefited from the technological strides the full-line vending industry has made, including practical networked machines, interactive displays, state-of-the-art payment systems and facial-recognition technology. These and other high-tech software and hardware advancements have laid the foundation for dynamic new ways that operators and their supplier partners are using to market at the point of sale, influencing purchase choices and building loyalty.

IVS's expertise is in mixing and matching the shiny new contents of this expanded technical toolbox to custom design, build, configure and brand automated retail systems that serve as interactive "billboards." Many of the company's solutions are designed for limited-time engagements at the center of high-profile promotions in the busy public places where consumers congregate; in others, they sell nontraditional merchandise in nontraditional sites. The company's clients range from television networks and sports franchises to restaurant chains and clothing brands.


PURPOSE-BUILT

"Our customized vending solutions are perfect for brands wanting to extend their creative marketing arm," commented IVS cofounder and vice-president of operations Jeff Thibodeau. "We configure our machines to meet the specific needs of each of our clients, whether it's a giveaway, a social media campaign or a merchandising solution. There's no limit to the machines we can produce, and we're extending our reach with manufacturers, distributors, retailers and marketing companies."

Whenever practical, IVS adapts off-the-shelf snack and beverage machines to its clients' specifications to keep costs down while creating a proof of concept that can be tweaked easily for the final look and functionality. IVS is also capable of custom-building equipment from top to bottom, such as an Android phone-shaped vender that Google has used on the trade show circuit to demonstrate its new mobile wallet.

"Some of our technology is proprietary, but most is through partnerships, which helps us provide the best solutions and get machines out quicker," McDonald told VT. "There are competing companies doing what we do that try to develop everything from scratch, which just takes too much time. In this business, you have to execute at just the right time or you miss the opportunity."

One vital IVS partner is a software development company that's been in the kiosk industry for 15 years. "Jeff and I just have five years' experience, so we benefit from their expertise, and they give better service to our customers once the system is built," said McDonald.

Many of the dozens of machines IVS has engineered have made nationwide headlines, helping put the company on the map in the marketing world. One was at the center a high-profile publicity event by Jell-O Canada in the heart of Toronto's busy Yonge & Dundas Square. The refrigerated vender was equipped with a 15" interactive touchscreen, a 32" LCD screen on top and a webcam that captured consumers' "Jell-Oh Faces." Their pictures then appeared on the largest digital billboard in Yonge & Dundas Square for 15 seconds. Participants also received souvenir photos of their "Jell-Oh Face" and a coupon for Jell-O from a color laser printer attached to the machine, and also were prompted to pick their flavor for a free sample.

"The real key ingredient to this project was the 15 seconds of fame," said Thibodeau. "It really drew in the consumer and created a unique user experience."

The company has also incorporated facial recognition technology that enables its clients to measure machine traffic and "dwell times," and to tailor messaging to specific demographics. "Back-end management lets us see how many come to a machine, what's hot and what's not," he said. "Some customers pay us for back-end management services to monitor their machines and provide reports.

"Facial recognition can trigger certain commercials based on demographics," Thibodeau added. "Marketing companies want to know where money goes, and how long each customer stopped by to see a commercial."

IVS was also the vending mastermind during a week of live shows in Chicago, when late-night comedian Conan O'Brien and his marketing team engaged with viewers by distributing free limited-edition T-shirts from 10 venders scattered throughout downtown Chicago. Each night on the show, O'Brien would reveal a "secret code" for the chance to win a T-shirt. The next day, Chicago viewers lined up to enter that code at one of the machines, which unlocked the screen to allow them to select a free T-shirt of their choice. This marketing tactic created substantial buzz on Twitter, Foursquare and Facebook, and caused lines of people to form in the streets of the Windy City.

In addition to building solutions specific to the unique needs of each client, IVS takes on the task of handling the logistics of transporting and supporting the resulting equipment in every capacity needed, from delivery through setup to onsite service and pickup. "We deliver a turnkey solution, a one-stop shop," McDonald told VT. "We secure the product, if needed, and drop-ship it. If it's T-shirts, we'll fold, bag and ship them."

IVS also can provide local representatives to support machines onsite at publicity events, at the request of its clients, to make sure that things go off without a hitch. "It often helps to have someone onsite just to educate people," said McDonald. "There's a lot more technology on our machines than on the snack venders most people are used to."

The company can also dispatch local service technicians to any of its machines through partnerships with its hardware and software suppliers, as well as a nationwide support network that it has built with full-line vending operators. "We can call any of the vending operators we work with and train them remotely to handle a specific machine, or we can hire someone locally and set them up at an event," explained Thibodeau. "There are companies that can't support what they sell. The longer a machine is down, the more exposure and/or money the sponsor loses. We support what we sell."

Several of IVS's projects have put the company on the cutting edge of some pioneering vending payment applications. Most noteworthy was a Twitter-activated vender -- the first in the U. S., according to McDonald -- that it designed to dispense free T-shirts for the popular online magazine/technology blog Engadget at a trade show last spring. Showgoers tweeted a unique hashtag displayed on its touchscreen; a shirt was dispensed; and the screen displayed a new, unique hashtag for the next user, preventing anyone from using the same hashtag twice.

The company has since deployed several more tweet-activated machines, which have proven to be a big draw among brand marketers seeking to capture the attention of today's mobile-minded consumers. In fact, Twitter itself commissioned IVS to design a vending machine equipped with a 15" interactive touchscreen and tweet-activated dispensing at its recent 2013 Twitter4Brands event in London.

Bare Minerals, a high-end cosmetics brand, is currently on the road with a Twitter-activated vending machine created by IVS, alongside a pop-up boutique and traveling team of makeup experts, as part of its nationwide "Go Bare" tour. The vender is doing its part to garner publicity by unlocking surprise gifts for users who tweet their "secret indulgences."

Another novel payment application that helped IVS create a buzz for its client was an SMS text-message-driven Kia-branded T-shirt dispensing unit installed at the 2010 MTV movie awards. Guests at the after-party who texted their favorite color of the "Kia Soul" in front of the machine received a free T-shirt.

For Ikea Canada, IVS created a one-of-a-kind payment system for a vending machine that promoted the opening of the international furniture chain in Winnipeg. Its 15" interactive touchscreen prompted customers to insert a custom-built Allen key, provided by a store associate, into a bolt that replaced the payment mechanism and turn it 360°. When the bolt was turned, the machine randomly dispensed Ikea candy or a store gift card.

McDonald and Thibodeau report that the company is seeing an upswing in demand not only for novel vending-centered marketing promotions, but also for automated delivery systems for nontraditional products in high-traffic locations like airports, universities and malls.

ROBOTIC RETAILERS

A sports apparel vending machine that IVS developed for NFL's Minnesota Vikings is a fixture in Minnesota's popular Mall of America (Bloomington), where wristbands, shirts, hats, footballs, trading cards and bobbleheads vend for $5 to $25. The vending machine made headlines in USA Today, and has sparked several companies' interest in entering the automated retail market, according to Thibodeau.

Yale Bulldog-branded venders designed by IVS deliver collegiate apparel to coeds on the Ivy League campus, and machines on the University of Central Florida campus dispense earbuds, batteries and school supplies.

IVS is hoping that a solution it engineered for North Carolina's Charlotte Douglas International airport a year ago will prove to be the "newsstand of the future" and present an opportunity in other airports. The company built two automated stores into the front of newsstands at the airport to provide round-the-clock access to basic sundries when the stores are closed.

Similarly, California's Sonoma County airport, which is too small to support a gift shop, has deployed a standalone IVS-designed machine stocked with travel necessities and impulse items. "Vending is the perfect solution when it's not feasible to have a brick-and-mortar store or for someone to be there 24/7," said Thibodeau.

IVS's beginnings trace back to an online T-shirt store that McDonald's wife opened to provide a job opportunity for their disabled son Nick, who could run it from home. After his death in 2007, she expanded the Nick's Novel-Tees business, and began looking for ways to diversify it.

"It was 2:30 a.m. and I couldn't sleep; the wheels in my head kept spinning," recalled McDonald. "I thought, something mobile that could move from location to location, and wherever it worked it worked, and if it didn't, we'd move it -- vending! We could put it in remote areas and expand without opening a brick-and-mortar store."

McDonald's Internet search for "T-shirt vending machines" yielded few results. Having recently finished 14 years of service with the U.S. Army and ready to take on a new challenge, he decided to build his own solution and pursue the opportunity on a larger scale. He shared his vision with Thibodeau, one of his wife's customers who had recently graduated from college with a degree in marketing and advertising, and they agreed to partner in the venture.

The duo modified a basic cold beverage vender and piloted their first T-shirt vending machine in the movie theater of a local mall. "We got interest from big companies, and found that there was demand," he recalled. "We changed our business model to pursue the nontraditional vending route. The only company leading the charge with automated retail, which was still in its infancy, was Zoom Systems. Our model used a base machine to which we added a touchscreen display and other features to suit the specific application. We broadened our market and extended our reach farther than Zoom Systems, since not everyone wants to put high-end products costing $20 or more in a machine."

Business has been on a steady upswing as IVS's machines continue to get noticed and word of mouth spreads.

"In addition to meeting whatever needs come our way, we keep coming up with new ideas to market, and scouting locations that might be interested in them," said McDonald. "We're focused not just on selling machines, but concepts." He added that IVS has built relationships with property management groups, airports, malls, stadiums and other high-traffic venues that it can leverage to position its customers for the most effective and profitable launch for their pilot or rollout.

Meanwhile, the industry at large is gaining positive publicity as IVS's projects take to the streets, giving the public a hands-on introduction to some of the most high-tech capabilities of the next generation of vending.

Soft drink bottlers have known for more than half a century that highly visible branded vending machines have an advertising and consumer-awareness value over and above their contribution as profit centers. With today's versatile payment technology, flexible vending mechanisms, wireless networks and increasingly intelligent customer interfaces, other brand owners are beginning to take advantage of this durable appeal.

Innovative Vending Solutions, vending machine

PHOTOS: [top row] Innovative Vending Solutions’ vender-based marketing tools have found special favor with technology companies including, from left, Google, for Google Wallet; Engadget, promoting its online publication; and the Isis NFC-based payment system. [bottom row] IVS equipment not only promotes brands, but can sell products. From left, a kiosk displaying and vending Samsung smartphones, tablets and cameras; an Ikea Canada store-opening promotion; and a Bare Essentials pop-up boutique and vender.


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