FUTURE OF VENDING MACHINES IN THE RETAIL SCENE

Abstract

Labour costs in Singapore have been inclining since 2011 and it is expected to continue rising, albeit at a slower pace, attributed by rising wages amid weak productivity growth. That, coupled with hefty rental rates in Singapore, continue to be a concern to retailers. Hence, similar to Japan, Singapore is exploring the idea of vending machines being a solution to rising rental and manpower costs. Despite the sheer size of Singapore’s population, which allows the country to only emerge as the top 30 countries in terms of sales, Singapore’s vending machine market is one of the most rapidly growing market. However, the sustainability of the industry remains a mystery. This paper sets out the objectives to examine consumers’ behaviour and preferences when it comes to vending machine retailing. A literature review is conducted to better understand the origin of the vending machine industry, as well as the retail trends that do and do not favour the industry. Surveys and in-depth focus group discussions are carried out with consumers in order to achieve the objectives. On top of that, case study analysis is conducted to provide insights for the vending machine industry in Singapore, the endless possibilities that the country can explore. The study confirms that consumers lack the incentive to patronise the vending machines due to the prevalence of around the clock convenience stores. Furthermore, other countries are more creative and venturing faster on the technology sides. Indicating that Singapore is lagging in terms of leveraging on technology, creativity, and social factors. Hence, fails to attract shoppers to retail at the vending machines. This paper also recommends an array of marketing strategies such as collaboration with market players in order to ensure long term sustainability in the market.