Airport vending machines in the past have sold typical items — soda, water and snacks. But companies eager to find a low-cost, easier way to sell goods to passengers in airport terminals are using vending machines in new ways.
David Popler is the chief revenue officer and senior vice president of sales at San Francisco-based ZoomSystems. His company is credited with bringing one of the first non-food/beverage-based vending machines to an airport — Hartsfield-Jackson — in 2006, selling Apple iPods.
“It came out of the idea that the end of the supply chain could be much more efficient and convenient for both retailers and consumers,” said Popler. “If vending could bring convenient consumption of soda and candy, then why not offer self-service automated retail for much higher-end products like consumer electronics and cosmetics?”
ZoomSystems used the then-new iPod to test this new idea, said Popler. “We thought the new iPod could be great, but Apple was not on board at first. So we bought some iPods and put them in machines at Hartsfield-Jackson and San Francisco International airports anyway just to see what would happen,” he said. “They did great. Once they saw the results, Apple was very impressed and offered us a distribution agreement for automated retail.”
Airports are great for ZoomSystems’ machines first because of the sheer volume of traffic, said Popler. “And we also realized that airports are a very special place for retail. The busiest people in the world get through security for a flight and all of a sudden, they have an hour or so of relative down time,” he observed. “They’ve had no time to shop for those high-end headphones they wanted. Then they are walking around a terminal, see those Bose they’ve really wanted, and take a few minutes to treat themselves.”
Among the brands ZoomSystems works with are Best Buy, Nespresso, Proactiv, The Honest Company and Benefit Cosmetics. “Success in automated retail is a combination of the product category, core economics and the brands’ strategies. There are several reasons for pursuing networks like this,” he said. “These brands have great products and a strong vision for how to utilize this channel.” ZoomSystems is currently in 65 U.S. airports, including 42 of the top 50.
The company provides all of the hardware, software and managed services required to run these networks turnkey, said Popler. “We have partners who we engage in every airport that provide the merchandising and other services the machines need.”
Alan Dale is the vice president of operations at Skyroam, a San Francisco-based company that sells and rents global Wi-Fi hotspots to travelers. Skyroam has vending machines at San Francisco International, George Bush Intercontinental, McCarran and Hartsfield-Jackson airports.
Skyroam founder and CEO Jing Liu, an entrepreneur and technologist, was using his cell phone on his global travels, said Dale. “When he got home, he had a cell phone bill with thousands of dollars in charges. He was angry about it and felt there had to be a better way to offer travelers a lower-cost way to stay connected in different countries,” he said.
A few years and 15 patents later, the product was unveiled in 2014, said Dale. Skyroam is rented via vending machines for $9.95 a day to connect up to five devices. Travelers can also buy a Skyroam device online or at tech stores including Brookstone for $99, with passes for $8 a day.
“The vending machine made it easier for travelers to pick up a Skyroam at the last minute, especially if they’re going to a foreign destination,” said Dale. The first one was installed at the company’s home town San Francisco International Airport in December.
“Because we are a local company, it only made sense to approach the airport in our own backyard. And we know from our own experiences how valuable our service is,” said Dale. “We told the airport that our service was a way to improve the travel experience for passengers when they go abroad.”
The airport is forward looking and serves a lot of tech-savvy people who travel, said Dale. “They thought it made a lot of sense, so they wanted to try it to see how successful it could be,” he said.
The process was very easy, Dale recalled. “We ended up partnering with ZoomSystems. They’ve already done a great job establishing relationships with the top airports in the U.S., and they had available spaces in the best terminals,” he said. “We wanted to make sure that we could focus on the technology and ZoomSystems could handle the back office systems, because they have lots of experience in the vending world.”
A companion to having a Skyroam device, or devices like smartphones and tablets is the power to charge them. For $20, San Diego-based FuelRod uses a kiosk to deliver to travelers a kit that includes a charger, a USB charging cable that fits most phones and tablets and adapters for Apple devices. Once the battery is dead, it can either be recharged or exchanged for a new one at a kiosk.
FuelRod co-founder Joe Yeagley said the idea originally came while he was working at a rechargable battery company. “We were looking at the way AA and AAA batteries were being used by consumers and wanted to find an easy way to replace old ones,” he said. “Unfortunately, the world of rechargeable AA and AAA batteries was too difficult to break into.”
But that wasn’t the case in the mobile market, where no one had yet developed habits on how to charge devices, said Yeagley. “We focused on places where people have a pressing need to stay charged and mobile instead of being plugged into a wall,” he said. “Airports were our first foray but we’re also at amusement parks, universities and the San Diego convention center.”
Like Skyroam, FuelRod got a boost from its hometown airport. “We came across a forum for small businesses looking to do business in the airport, so I called them and pitched FuelRod,” he said. “They loved it, and because we were local, they worked with us. We launched in the airport in October 2014 with 13 kiosks.”
Airports are very much in need of mobile charging solutions, said Yeagley. “One of our kiosks can take care of hundreds of travelers and it only takes 15 seconds to operate,” he said. The company has kiosks in 24 airports, with five more coming by the end of July, he added.
Many passengers see the airport as their last chance to buy gifts and souvenirs for for friends and family. Kansas City-based SouveNEAR started selling art and souvenirs made by locals in a vending machine WHEN. It is positioning itself as an alternative to the usual items found in airport newsstands and gift shops.
Co-founder Tiffany King first had the idea as a way to sell art in busy places. “It occurred to me that a vending machine would be interesting to try,” she said. “I then wondered if it could work financially in an airport. So it was all about ‘what if.’”
Co-founder Suzanne Southard felt vending machines gave SouveNEAR the best chance to be in more spaces. “We’ve also both shopped at airports and we wanted to bring an independent craft fair concept to the terminal with items made by local artists connected to the city,” she explained.
It only made sense to bring the first vending machine to Kansas City International Airport, said King. “We pitched them and sent photos of the local artists we wanted to carry. We wanted to be clear that ours was a different offering than what they already had,” she explained. “The airport was extremely supportive, flexible and helpful. They liked that we were showcasing local artists offering things that had never been seen before.” The machine made its debut in November 2014.
After its success at Kansas City airport, SouveNEAR expanded to Oakland International Airport in November. “We chose Oakland because we had a partner in Kansas City who reached out to us,” said Southard. “And the Bay Area has a strong arts community that is well known across the country,” she said.
Items available include: artisan salts; jewelry; custom t-shirts; local tea towels; magnets; illustrated note cards; and tiny art prints. “We try to have a variety of products in the vending machines, but we are limited in the number of things we can carry because of the size of the machine,” said Southard. “We have artists submit their goods online, and we also get referrals and find people at fairs. We try and be careful to have a mix of prices and products.”
SouveNEAR will add a vending machine at TF Green Airport in Providence, Rhode Island in the next few months, said Southard. “We work with local contractors to keep the machines stocked and curated.”
John Glenn Columbus International Airport partnered with local favorite Jeni’s Splendid Ice Creams to bring the sweet treat to the terminal. Ryan Morgan is the chain’s experience leader. “There was a desire from the airport team to offer a unique Columbus experience inside the airport, which is how the conversation started.”
So many people fly in and out of the airport every day, said Morgan. “The Columbus convention center is right across the street from our downtown location,” he said. “Visitors come across the street, eat Jeni’s ice cream and fall in love. So they can get our ice cream on their way in or on their way out.”
Jeni’s team handled the design of the ice cream vending machine, said Morgan. “They did a great job of creating a design that looks very different from other vending machines,” he said. “They make a great billboard for us at the airport, which is good for advertising our business.” There are three machines, one each in Terminals A, B and C, he added.
On average, Jeni’s has six ice cream flavors and three varieties of ice cream sandwiches in the vending machines, said Morgan. Airport ice cream flavors are: Salty Caramel; Darkest Chocolate; and Ndali Estate Vanilla. Ice cream sandwiches flavors are: Oatmeal Cream, Chocolate Hazelnut and Salty Caramel with smoked almonds.
“We are on the cusp of adding three additional flavors of ice cream very soon,” said Morgan: Intelligentsia Black Cat Espresso, Lemon Buttermilk Frozen Yogurt and Pistachio & Honey. Jeni’s single-serve ice cream containers are available in first class on all domestic Delta flights, he added.
“Our best-selling flavor in the machine is Salty Caramel, which also happens to be our best-selling flavor of all time, anywhere,” he said. “It’s the flavor that first put Jeni’s on the map.”
Skyroam’s Dale offered advice for companies who want to enter the vending machine space at airports. “First, talk to the airports. See them at conferences or meet key executives and ask what they’re looking for and how they believe their customers are best served,” he said. “In our case, it was fairly easy to understand that we had a product that passengers needed and wanted, so it was a lot easier for us to get Skyroam in.”
Second, partner with companies like ZoomSystems that have a lot of experience in the airport vending machine space, said Dale. “This can be a complicated business, so it’s good to have a partner that understands it.”
FuelRod’s Yeagley said to make the case with an airport. “You want customers to have a less stressful travel experience. One way is to ensure that their electronics can be easily charged,” he said. “If your customer is looking for a plug or sitting on the floor to charge up, that is not a good experience. And people sitting in one place are not spending money in airports.”
ZoomSystems’ Popler thinks the future is bright for airport-based vending machines. “The recent change in the retail landscape and the rapid rise of omni-channel strategies across top brands is expanding our footprint rapidly,” he said. “We are not only growing with categories that have worked before — like electronics and beauty — we also have a wide range of new categories we are developing today as well.”
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