Each day millions of Japanese citizens utilize vending machines. Indeed vending machines are a retail channel of key importance in many product categories in Japan. As such they require research of product layout, shopper behavior and the tracking of purchases just as for other retail channels.

For nearly half of Japanese consumers using vending machines (48.0%, Japan Vending Machine Manufacturers Association, 2005 Report), their purchase will be a beverage of some type and in Japan the drink machine is ubiquitous, never more than a short walk away. Beyond drinks, coin lockers (20%), batteries/small toys (13%) and cigarettes (11%) represent the bread and butter of the Japanese vending machine industry.

Exotic convenience…

When most of us think about Japanese vending machines, images of strange, cool, or unique products come to mind. If you were to take a walk in Akihabara, Tokyo's electronics capital this would be true. Between the packed stores, there are alleys filled with row upon row of toy machines targeting teens and adults. The machines contain small collectable figures such as robots, video game characters, Japanese cartoon characters or even miniature swimsuit models. A prime example of Japan's thriving niche markets!

Factory farming? Egg vending machine

At a ski resort in Nagano, vending machines serve hot plates of fried octopus pastries called tako-yaki. But if this off piste fare seems weird, even more amazing is the case of a vending machine in a small town called Morioka. Here one can purchase living pet rhinoceros beetles, with all the convenience one would expect from a Japanese slot machine!

Other machines sell umbrellas, eggs, toilet paper, flowers, videos, fortunes, and even ten-kilogram bags of rice.

Or 'just' a drink?

Of course these cases, some of which have become urban legends, are the exceptions rather than the rule and the vast majority of Japanese interact with vending machines during the daily purchase of normal goods or services.

	Thirst quenching cell phones…

But even for these everyday purchases, a high degree of functionality is on offer. For instance, take the example of basic beverage machines. These allow customers to select between a hot or cold beverage. Generally the options of heated beverages include green tea, coffee, or a soothing vitamin C drink. The selection of cold drinks includes the same green tea, coffee, or vitamin C drink but also options such as sports-type drinks, fruit drinks, vitamin drinks, or sodas. The drinks are usually in cans, plastic (PET) bottles, glass, or sometimes in a juice-box style.

The most up-to-date vending machines for beverages even allow consumers to complete a wireless transaction using credit stored on their cell phone, so-called C-Mode. Some vending machines selling alcoholic drinks now require ID, which is scanned, in order to complete the purchase.

At your service!

Increasingly vending machines are seen to offer services as opposed to products. The charging of cell phones is a convenient case in point.

Join the print club!

But perhaps the biggest service-machine phenomenon to sweep Japan has been print-club. Print-club is actually a fun oriented photo booth designed to appeal to teenagers. Typically fitting from two to ten people, the machines allow users to take photos and then customize by editing the background or adding colorful graphics using a built in computer.

The customized pictures are then printed as small stickers that are used to decorate cell-phones, wallets, or notebooks etc.

Important lessons

As of today the Japanese vending machine market is a key segment for global beverage and tobacco companies. But as the segment itself has become saturated, the need to gain a competitive edge has lead to increasingly sophisticated research of vending machine purchase behavior using methodologies such as ethnography and eye-tracking.

Technology is advancing at great speed, resulting in more sophisticated offers, product delivery and payment mechanisms. Given the advanced level of usage in Japan, it is likely this market will be test bed for automated product delivery in other parts of the world. Whether fried octopus and rhinoceros beetles will also catch on is another question though..!