NONFOODS: Vending Kiosks: Self-service style

When people think of apples and supermarkets, the produce department usually comes to mind. But at a handful of stores operated by Quincy, Mass.-based Stop & Shop Supermarket Co., you can turn to a self-service kiosk to get apples.

Apple iPods, that is.

The grocer is testing two types of new vending machines that offer either high-end portable electronics and accessories -- including iPods -- or premium skin care products at five stores in New England.

The vending kiosks, from San Francisco-based ZoomSystems, feature robotic arms that carefully pluck and dispense the pricey iPods and face creams. Each store in the test boasts a Proactiv Solution skin care kiosk and a consumer electronics kiosk with iPods, headphones, and other electronic items.

Stop & Shop installed the systems because it's seeking a way to gain a toehold in high-end nonfood market segments usually left to other channels. Safeway's Vons chain also has ZoomSystems kiosks in 15 stores in Southern California.

"Partnering with Zoom Systems allows us to offer Proactiv and iPod products which ordinarily would be unavailable to our customers," explains Robert Keane, spokesman for Stop & Shop, which operates 389 stores throughout Massachusetts, Connecticut, Rhode Island, Maine, New Hampshire, New York, and New Jersey. "These are specialty items, which usually can only be found in specialty shops or through special orders."

The intriguing experiment basically probes the question of whether supermarket customers would be willing to buy high-ticket nonfood items in a self-service situation, given that the items being offered possess brand equity strong enough to inspire confidence.

As far as Stop & Shop is concerned, the program could help add to the one-stop-shopping experience the retailer aims to deliver to its shoppers. "For us a great part of the appeal is the convenience it offers to customers," says Keane. "As long as we're open, these services are available -- no extra stop needed."

The retailer is no stranger to self-service. It currently offers Coinstar and Redbox ($1 DVD rental) machines at the front of its stores. Both are very successful, according to Keane.

Easy to use

In the case of the ZoomSystems machines, products are prominently displayed in a well-lit environment behind shatterproof glass. Shoppers select products via a touchscreen designed to deliver an experience similar to online shopping -- customers view photos and detailed information about the various offerings by tapping their corresponding links on the screen.

Once the consumer has made a selection, she's instructed to swipe her credit or debit card. A robotic arm then retrieves the product from its position. Patented optical technology ensures that the product has been delivered before the customer's credit or debit card is charged, and the process ends with the printing of a sales receipt.

All of ZoomSystems' machines are networked and centrally monitored to ensure high reliability and customer service levels, according to the vendor.

Stop & Shop promotes the kiosks through its weekly circular and in-store radio system.

For the first two weeks following the installation, ZoomSystems provided Stop & Shop with a live "concierge" to answer any questions. It was hardly necessary, says Keane, adding, "The machines require virtually no explanation, as they use a very intuitive touchscreen interface."

Although the machines have only been in operation since August, Keane says preliminary findings show Stop & Shop's customers are willing to purchase the upscale items. Results so far have been positive.

"We're just beginning our test now, so it's too early to talk about expansion plans," adds Keane. "However, if successful, we hope to bring the program to other customers."

ZoomSystems says its machines are available in a range of store concepts, with product assortments customized to each channel. They can offer some combination of about 120 items.

The vendor says it bears most of the cost of each machine, and retailers installing the systems can either receive a revenue share or pay ZoomSystems a monthly lease, depending on which records revenues. Keane wouldn't comment on how Stop & Shop's deal with ZoomSystems is structured.

ZoomSystems' fully automated machines are usually found in airports, malls, and department stores such as Macy's.
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