Article contributed by MarketNewsUpdates.com
“Unattended cashless retail” may sound futuristic, like a driverless car, but in reality, it is a thriving segment of the economy that is forecasted by ResearchAndMarkets.com to grow to $34 billion by 2023.
What used to be dominated by simple coin-based laundromats and vending machines selling candy bars is now a high-growth, multi-layered and profitable segment retailing items like frozen yogurt, electronics, makeup, school supplies and over-the-counter medicines.
Mentioned in this commentary are the following companies:
- Best Buy (NYSE: BBY)
- Generation Next Franchise Brands (OTC: VEND)
- USA Technologies (NASDAQ: USAT)
- McDonald’s (NYSE: MCD)
Unattended retail comes to life through city parking meters to garages, where there is no longer a need to store quarters.
Vending machines not only sell food and drink with increasingly healthy options, but they increasingly offer other convenient items that people on the go frequently need like earbuds, power cords, batteries and toothpaste.
Unattended retail represents a gold rush opportunity for these non-perishable goods. There’s potential to offer almost any consumer good through high-tech vending.
In the absence of a cashier and the typical bricks-and-mortar retail environment, cashless unattended retail attracts more customers more frequently who spend more.
These machines mean that customers can interact with merchants more quickly, without having to waste time standing in lines waiting on slow-moving employees who may be distracted in their own thoughts.
This new form of retail is particularly attractive to millennials, who prefer human-less transactions.
There are three main reasons operators are looking to automate:
- one is to cut labor costs by not having to pay human employees;
- another is to increase efficiency, quality, sanitation, uniformity, and so on;
- last, some companies will use automation and robotics for remote management inventory, troubleshooting and generating sales data.
Below are several companies poised to profit from the technological leap.
Best Buy Co, Inc (NYSE: BBY) is the largest specialty retailer in the US consumer electronics retail industry.
The Best Buy Express ZoomShop was the very first automated retail experience for consumer electronics on the market.
Launched in 2008, the high-tech kiosk provides products which include portable media players, digital cameras, gaming consoles, headphones, phone chargers, travel gadgets, and other popular products.
The sleek Express ZoomShop kiosk answers their product questions on an interactive touchscreen, runs in-depth product demos, guides shoppers through the buying process, and closes the sale.
Generation Next Franchise Brands
Generation Next Franchise Brands, Inc. (OTCQB: VEND) is the developer of the world’s first fully-automated robotic frozen yogurt vending kiosk designed to disrupt brick and mortar competitors: Menchies and Yogenfruz.
These “unattended” robots eliminate the need for costly rents, employees, food safety measures and are capable of operating 24-hours a day.
The robots have the ability to accept payments of all kinds, including cryptocurrency.
The company has recently sold the exclusive rights to the Los Angeles and Orange County markets for $23 million and most recently, the exclusive rights to the Miami market for $22.3 million making it one of the fastest growing high tech franchises that is disrupting retail in the country.
USA Technologies, Inc (NASDAQ: USAT) “is on-track to process over $1.0 billion in small-ticket transactions across the 568,000 unattended retail machines connected to our ePort Connect network”, said Michael Lawlor, chief services officer at USAT.
A move between USA Technologies and a firm known as Cantaloupe may step this up even further; Cantaloupe deals in logistics and inventory management processes, which is exactly what an unattended shop needs more than anything… well, except security.
With USA Technologies dropping $85 million to pick up Cantaloupe-$65 million in cash and the balance in USAT stock-it is clear that USA Technologies is putting one monster bet on unattended retail.
McDonalds, Corp (NYSE: MCD) food service automation is reaching new heights.
If you have been to a McDonalds in Europe, Canada, or an airport recently, you have probably noticed the kiosks that allow you to order your food using a touchscreen display and pick it up when it is ready.
Even further, McDonald’s opened a beta version of a fully automated McDonald’s in 2015 involving robots that work 50 times faster than the average human.
There is only a small team of humans there to keep the robots in check.
The manager of the store had this to say of his robot co-workers: “These things are great! They get their work done in a fast and orderly manner, plus they don’t ask for cigarette breaks.”
A spokesman for McDonald’s cited “a high demand for a minimum wage of $15/hr”, “protests [against McDonald’s] getting worse every day”, “the tremendous margin of human error, poor hygiene, lack of education”, and “laziness” as reasons for the move towards automation.
Shares of McDonald’s have steadily increased since 2015, reaching all-time highs.