Indian Institute of Management Indore

AIDE Case Study

Course Name : AI and Digital Economy
Instructor : Sidharth Balakrishna

Roll Number Name

EPGDPMAI/B1/2022/005 Janakiraman Sivasailam

EPGDPMAI/B1/2022/009 Nupur Goel

EPGDPMAI/B1/2022/016 Shri Narayan Agnihotri

Group Assignment
EPGDPMAI/B1/2022/022 Varsha Yadav
Submitted By :
IoT Based Automated Vending
Machines
How this company nearly doubled its revenue by undergoing digital transformation
Introduction - Vending Machines

Vending machines are a long-standing example of regulated automation.

Many functions are added throughout time, and the machine is getting better by the day.

The word "vending machine" refers to a machine that receives coin, token, or card payments and
dispenses a product.

The object supplied by the machine may be a beverage, a snack, a ticket, a receipt, or just change in a
greater denomination of cash.

Most vending machines rely on coin intake using currency detection algorithms such as image
subtraction techniques.

Additionally, today's vending machines don't really offer much convenience or security.
Introduction

About Company Context Problem Statement

A novice in unattended retail Conventional vending To retrofit current vending

technology. machines don’t fit today’s machines with modern
consumer needs. technological capabilities that
The company wants to provide will aid the transition to
an innovative and Upgrading the vending intelligent vending.
one-of-a-kind solutions that offerings with the latest
are designed to maximize the technologies would provide
performance of any retail customers with vending
environment. experiences for today and the
future.
Consumer Journey
Start

Choice

Order another = true

F T
no item
left?

Pay

F T
success Dispense

payment = fail

End
Consumer Journey - Reality vs Expectation

Customer Reality Customer Expectation

1. Conventional machines lack visibility and 1. Track customer behavior and understand
interactivity. customer needs.

2. Less or no connectivity, payment 2. Recommend specific products based on

versatility. demographics.

3. Lacks the flexibility to adapt to changing 3. Identify repeat customers and invite them
preferences over time. to loyalty programs.

4. Lacks governance and is prone to risk. 4. Provide updates on machine status.

5. Reduce downtime by tracking machine

status.
Challenges deep-dive
Stuck Products & Product Code &
Payments
Dropped Products Out of Stock

A traditional vending machine At the time of dispensation, Using the dispense code often
only accepts money in form of the selected snack can leads users to select the wrong
coins or bills. sometimes get stuck inside snack due to human error.
the vending machine.
Stuck money is the bain of One of the issues faced by the
every traditional vending users is that a particular snack
At the time of dispensation,
machine. The vending
delicate products can get is out of stock and not
machine might also fail to
damaged due to the impact of replenished until a defined
return change to the users.
the fall. period.
Challenges deep-dive
Unauthorized
Price and Promotions Downtime
Products

Traditional vending machines Vending machine owners rely The vending machines would
require service visits to update on third parties to stock experience downtime issues
prices or to begin promotions, machines there is no safeguard periodically, and every minute
like buy-one-get-one. to prevent the vending of of downtime is a loss to the
unauthorized products. company.
Proposed Solution Superseding the traditional vending
machines with AI-enabled smart machines
to achieve a frictionless, fully managed
retail.

This new age vending technology is

convenience-driven and
consumer-focused.
AI-enabled Smart Vending
Machines
Solutions Considered

A card-based system allows for The decentralised distributed ledger used

cashless transactions but does not by blockchain, which allows information
integrate with the information of the to be transferred through multiple
purchased products. channels, has its own restrictions.
However, a centralised system is
required.
App & NFC Based AI Based
Solution Solution

Card Based Blockchain Based

Solution Although an alternative, an app and Solution AI is the technology of the present and
NFC-based system has its own the future.
drawbacks. It will be effective for
providing consumers satisfaction,
but real-time data analysis and
updating will be difficult.
Why an AI-Based Solution?

AI is the technology of the present and the future. The following are some important benefits of
implementing AI-based solutions

Automation

Flexibility Customization

AI

Minimizing Real-Time
Errors Solution
Understanding AI-enabled Smart Vending Machines

Vending machines with integrated motion detection cameras and other sensors can improve their
efficacy by serving up material that is personalised to the user.

A vending machine with added sensors and cameras can:

1. Monitor user behavior.

2. Provide product recommendations based on demographics.
3. Identify loyal customers and extend invitations to loyalty programs to them.
4. Provide updates on machine status.

In addition to providing a more engaging experience, this data may be transmitted back into the
cloud.

Cloud analytics will aid in optimizing the product inventory, content distribution, and in machine
maintenance.

New payment technologies can also be supported by sensors.

Enhanced Consumer Journey

User Operations
Backend
Start
Initiate Backend Get details of
Service products from DB

Start Validate
QR

Process captured Generate

video Invoice
Scan QR
T New
Registration
Customer

Collect Use AI Algorithm to Intimate

F find reach Payment
Product
Validate
Prev. Transactions

End Snip video for Validate

analysis Payment
Unlock
door

Customer
Customer Action Analyze video for
locks door
products sold

End
Advantages of AI-Based Solution

Better, more intelligent smart vending machines The following are some advantages:
are able to provide customers with more
interesting experiences. Operational Perspective

Vending machine companies are offering 1. Faster Time to Market

interesting and interactive content to foster loyalty 2. Better Business Decision Making
and boost sales by utilizing AI, facial recognition, 3. Accurate Sales Forecasting
and smart visual displays. 4. Increased sales due to better logistical
management and improved connectivity
For OEMs and Solution Integrators, these
extremely sophisticated and interconnected
Consumer Perspective
vending machines open up new revenue prospects.
1. Seamless Experience
2. Easy Payment Technologies
3. Enhanced Customer Loyalty
Impact max growth
Business Value and Statistics
According to Technavio research, the market for smart vending machines has been expanding at a
CAGR of over 34 percent between 2018 and 2022, which translates to an additional $11.48 billion in
growth. The rise in popularity of vending will be fueled by new payment technologies that provide
customers with simpler and faster payment options via credit cards or phones.

The move to intelligent vending will also be aided by the possibility to adapt existing machines with
contemporary technical capabilities.
Report Attribute Details

Market size value in 2022 USD 20.51 billion

Revenue forecast in 2030 USD 55.52 billion

Base year for estimation 2021

Actual estimates / 2018-2022

Historical data

Forecast period 2022-2030

Business Value and Statistics
Future Enhancements

1. New revenue generating channels:

○ Become a viable competitor in retail gate-keeping sector.
○ Sell the AI enabled vending machine to manufacturers.
○ The screen displays can be used for advertising and marketing.
2. Audio interactions
3. Gesture based interactions
4. Coupon or Voucher Scanner
5. Customized UI
6. Credit and debit cards
7. Smart Hardware Maintenance – Remote monitoring of the technical issues and address them
before system failure.
Conclusion

Vending machines are growing in terms of accessibility, product types, and capabilities.

The refrigerator-sized machine is no longer relegated to hallway recesses and fluorescent-lit waiting
rooms.

Instead, intelligent vending machines are being drafted into the revolution of retail.