“Automated Retail: Shopping in the Digital Era” by Caitlyn Coverly

There is one assumed perk in opting to buy a t-shirt from a vending machine: you get to avoid the store’s pushy salesman.

Thirty seconds into browsing through the inventory list on one of the new Mark’s Work Wearhouse vending machines located at Union Station, the shopper is bombarded by a message prompt asking, “Do you need more time?”

Apparently the pushy store salesman has also been digitized.

The Canadian clothing retailer quietly set up two apparel vending machines in the GTA – one located at Union Station’s Go Bus Terminal and the other at the William Osler Health Centre in Brampton.

The two machines were installed in December 2010 and began dispensing items to curious shoppers in early January of this year. The idea, according to Robin Lynas, vice-president of corporate development for Mark’s, was to generate sales and increase brand awareness in unexpected locations. Two months later, however, initial optimism is fading as Lynas says his company is struggling with the machines.

“The machines we have are very much a ‘proof of concept’ and frankly we are struggling with them,” said Lynas. “We were way out in front of the curve on this.”

The machines are stocked with different items, catering to the potential shoppers in their respective locations. The Union Station machine has items such as gift cards, t-shirts, hand and foot warmers, scarves and mittens. The Brampton machine stocks items such as scrubs and loungewear. Every purchase is backed by Mark’s store return policy and purchases can be made with Interac debit and all major credits – cash is not accepted. The project was two years in the making, with Mark’s partnering with IBM Canada to design digital, touch screen-operated machines.

In other cities around the world, the concept of purchasing everyday items in vending machines is not a foreign one. In Japan, shoppers can buy anything from engagement rings to beer in a vending machine. In fact, Japan has over five million machines – one for every 23 people. Within the last three years, technology stores such as Best Buy Co. have also begun experimenting with vending machines, selling items such as digital cameras, cellphones, and MP3 players in a handful of airports. Mark’s, however, believes it’s the first retailer in Canada to sell clothing through vending machines.

“In fact, we know there are very few concepts like this in the world,” said Lynas.

Alan Middleton, assistant marketing professor at York University who specializes in branding, says he isn’t surprised the Mark’s machines aren’t producing desirable sales.

“This is a very new concept for Canadians,” said Middleton. “We are usually extremely slow to adopt new ideas.”

Middleton says Canadians are used to the traditional brick and mortar way of shopping, where companies own and operate physical stores rather than an online or automated retail presence.

“We are much more traditional,” said Middleton. “We probably do about half the level of online shopping that Americans do.”

After reading an article in an apparel magazine, Mark’s contacted Ohio-based company, Innovative Vending Solutions (IVS), to see if they could help him work out some of the problems they are having with the project.

IVS has been creating and designing custom vending machines in the United States since 2008. Last year, they worked with the NFL’s Minnesota Vikings to create the first-ever sports apparel vending machine and installed it in the popular U.S. tourist attraction, the Mall of America in Bloomington, Minn.

The machine includes shirts, footballs, trading cards, customized rubber bands, bobbleheads and more. Prices range from $5 for the rubber bands to $25 for a shirt or hat. The vending machine made headlines in USA Today and has spiked several companies’ interest in entering the automated retail market.

“They weren’t getting the numbers they wanted,” said Jeff Thibodeau, vice-president of Operations and co-founder of IVS. “So we wanted to present a less-expensive alternative.”

Thibodeau says his company offers a revenue-share program where they provide the machine, branded and customized to the client’s needs, for a trial period at no cost.

“This way, companies can try before they buy,” said Thibodeau. “A lot of businesses are scared to try out such a new concept.”

Vending machines designed and built by IVS can range anywhere from $6,000 to $25,000 and up, depending on the number of customizations. In addition, retailers need to be aware of rental or lease fees in their desired locations.

GO Transit’s marketing and advertising department could not be reached for comment on the rental fee Mark’s is currently paying.

According to Thibodeau, Mark’s has put their vending machine project on hold while they weigh what options the company has going forward.

Middleton says his advice to Mark’s wouldn’t be to stop the project. Instead, he says, they should be to be persistent and cater the product and advertising to a younger demographic.

“Keep being there, promote it, and stand behind your product.”

Middleton is confident the idea of buying apparel in vending machines will catch on in Canada.