Vending is trending and buyers are spending

Since the middle of last month, a huge humming box containing bouquets of dried flowers at the basement of Raffles City Shopping Centre has been drawing curious stares.

It is a vending machine for dried flower bouquets by Windflower Florist - a first in Singapore. With a touch-screen menu offering cashless payment options, it dispenses a rustic bouquet within a minute.

Mr Stanley Tan, who runs Windflower Florist, told The New Paper he got the idea from a trip in April to South Korea, where he saw flowers being peddled by these electronic "salesmen".

Response has been positive, with 120 bouquets sold in two weeks late last month.

Retailers like Mr Tan are jumping on the bandwagon of using vending machines to reach out to more potential consumers, market researcher Euromonitor International noted in a February report.

This comes against the backdrop of challenging times for the retail sector.

Long associated with canned drinks and snacks, vending machines created a buzz here when JR Group introduced VendCafe, which dispenses hot meals, last year.

The availability of hot food any time of the night is a boon for sales manager Terry Lim, 31.

Mr Lim, who lives near the outlet in Sengkang, appreciates the convenience it provides.

No one really thinks about machinery to make things easier. There is a lot of untapped potential.Mr Stanley Tan, who runs Windflower Florist

"I used to see vending machines as a last resort. But now, with so many food choices available, it is a good option for nights when I do not have time to eat dinner," he said.

VendCafes have since sprouted in housing estates and MRT stations. JR Group chief executive officer Jocelyn Chng said the Sengkang outlet serves an average of 250 meals a day.

In April, the No Signboard Seafood restaurant chain opened The Ma2 Shop, a cluster of vending machines meant to replace traditional mamak shops, at Tampines Street 12.

There are now six such outlets, all located at Housing Board void decks, selling everything from non-prescription medical supplies and household provisions to power banks, and, of course, food.

The Straits Times earlier reported that the restaurant chain invested $1 million in the venture and even spent six months tweaking its famous chilli crab recipe to suit the machines.

MORE COMPANIES

Now, about 30 more companies are planning to install such machines within the next year.

Also in April, Singapore Press Holdings (SPH) rolled out vending machines for readers to conveniently purchase newspapers. There will be 50 such units islandwide by next month to make up for SPH's diminishing network of roadside stalls.

In Singapore, the rise of the vending machines is in part driven by a nation-wide push towards productivity and a need to reinvent certain sectors to stay competitive.

There are 20,000 vending machines here today, estimated a Japanese vending machine company here.

For retailers, they offer a convenient alternative method to sell products to the time-starved or those on the go.

Lifestyle retailer Naiise, which sells a mix of local products via a vending machine at Suntec Convention Hall, targets business travellers - a suggestion from the Singapore Tourism Board, said Naiise's head of marketing Chong LiBing.

I like talking to the shopkeepers, especially when I can learn more about the products and how they are used and share common experiences in using them. Consumer Clement Chua

Naiise, along with Windflower Florist, sees the machines as potential advertisers.

Mr Tan hopes the vending machines will drive sales to his online and physical stores.

"In the florist industry, hardly anyone innovates along these lines, because it is still a crafting business. No one really thinks about machinery to make things easier. There is a lot of untapped potential," he added.

The 24-hour availability is a big draw, Singapore Polytechnic business lecturer Kenneth Wong said.

"Also, with new technologies such as interactive touchscreens and cashless payment modes, customers will benefit from having a wide range of products and even more targeted, attractive marketing," he added.

While civil servant Clement Chua, 28, appreciates the convenience, he feels that vending machines lack the personal touch.

He told TNP: "I like talking to the shopkeepers, especially when I can learn more about the products and how they are used and share common experiences in using them."

But when located well, vending machines are a viable next step for retailers, experts told TNP.

National University of Singapore (NUS) Associate Professor Ang Swee Hoon said: "They are a novelty, occupy less space, and hence rental, and have little overheads..."

Difficulties such as hiring and retaining staff are also addressed, said Mr Wong.

The low overheads have worked for Kalms, a gift shop chain that closed down last year. It moved its operations online and then to vending machines to keep the business afloat. Its operations manager, Mr Masataka Mukai, told TNP that the company had invested $7 million in over 100 vending machines - from China, Japan and South Korea, costing at least $13,000 each - and software development.

More than 30 are found islandwide. One of them is at Raffles City Shopping Centre carrying Windflower Florist's bouquets. Another, at International Plaza, also carries the bouquets.

VENDING MACHINE CULTURE

The remainder will be deployed progressively, Mr Mukai said.

There is a "very perceptible shift" in retailers - both with and without online presence - to a vending platform, he added.

Kalms has been approached by other brands to carry their products, said Mr Mukai.

He is optimistic that a vending machine culture will take root in Singapore, much like what has happened in Japan.

Adding that the company expects the investment to start paying off next year, Mr Mukai said: "We know now that almost any sort of product sold in a retail shop can be vended easily, given the technology of our machines.

"We are open to working with all retailers in selling their products through our machines."

Agreeing, Mr Wong said: "Consumers are warming quickly to the vending machine culture."

Euromonitor International noted a 1 per cent increase in vending machine sales last year, and the figure is set to rise.

But Prof Ang, who is from NUS Business School's marketing department, is sceptical.

"We may have more vending machines than previously, but I do not see the culture here being like that of Japan's, where almost anything can be sold via vending machines," she said.

In Japan, vending machine culture was borne out of necessity. Credit card usage was less prevalent, making vending machines a good means to buy things, she said.

"Way before online shopping, these machines established themselves as a convenient way to buy things without having to go to the store," said Prof Ang.

It helps that the Japanese can buy almost anything from the machines, she added. In Singapore, however, the convenience of online shopping makes vending machines less of a necessity.

"Online shopping made a deeper mark first before vending machines did. Hence, it will be challenging for vending machines to overtake online in the retail landscape," said Prof Ang.