Shop Around the Clock
European-based automated convenience business targets U.S. shop owners with self-service retail stations.
Susan H. Fishman

Shop24’s unit in Morrisville, New York, is the first of many expected in the U.S.

Shop24’s self-service retail station offers 24-hour access to products such as food, dry goods, personal products, electronics and clothes. The automated convenience shop is run by a “robot” that picks up each product and delivers it to the customer 7 days a week, 365 days a year. The shop offers 200 products to the consumer who can make a shopping list and select up to seven products in one transaction.

“The first product in the row is what you get, so it’s not something hidden that is not living up to your expectations,” says Shop24 COO Bernhard Szondi, “which is why we sell a lot of fresh items here in Europe, like apples and sandwiches. Consumers are capable of storing 200 items in their memory, but not 500 or 800. And if it were only 20 or 40, then it’s just a vending machine, not a global offer of convenience.”

“The size of the product is a consideration,” adds Jerry Casey, Shop24’s director of sales for the U.S. “We can’t put a desktop PC in there, but we can put in a hard drive, a mouse, cables and a battery pack. Shop24 would be a great application inside a mall where it provides a specific purpose, i.e. stocked with electronic products, since malls aren’t open 24/7.”

At the end of 2004, New Zealand-based Vending Technologies Limited (VTL), which owns All Seasons Services, purchased Shop24 and integrated it into its network. VTL was already active in New Zealand, Australia and the U.S., mainly in franchising classical vending machines.

“So Shop24 was a good fit, because it was more of a sexy product, compared to traditional vending machines,” says Szondi.

In Europe, Shop24 is present in eight countries, with approximately 170 shops. In the U.S., the company currently has one shop installed at SUNY Morrisville in Morrisville, New York. The company’s 3-year plan is to have 80 units sold and installed in the U.S. Shop24 will deploy anywhere in the country and is currently working with three clients and additional prospects in New York and Boston.

“It makes sense to grow geographically; it’s efficient from a maintenance and repair point of view,” says Szondi. “Our first goal is reliability; the second is cost reduction; the third is to make it more fitted to whatever site we see. So if we see a good site, we make sure we adapt to the site, rather than having the site adapt to us.”

The company has targeted a number of market segments, including transportation sites, camping/recreational sites, urban business centers, university campuses, business parks, gas stations, the food industry, retail outlets and the vacation industry. A main consideration when choosing locations is traffic — human traffic, says Casey.

“There are many considerations that vary in importance from site to site,” he says. “We visit the site, ask our client for corroborating statistics on traffic and make decisions based on that information. We have minimum traffic qualifications that must be met, but we look at the entire opportunity, including what will be sold, to whom products would be sold (captive or public at large), whether or not it’s a strategic client and if it’s an opportunity for a new market that we feel will grow.”

The Shop24 unit is available in two different concepts. The first concept is called the “modular system,” which is generally installed inside a building, facing outside so that the consumer walking on the street has immediate access to the shop. The filling and cleaning of the unit is done from inside the building. There is also a container version, in which the shop is already installed in the container unit and is shipped on-site. 

Shop24 is currently talking to several hospitals and colleges about additional locations, and there is an enormous interest from the general market.

“Over time, the U.S. market will probably mirror the European market in that 50 percent of the units will be owned by supermarkets and shop owners and 50 percent will be owned by investors, individuals or captive markets, like universities, hospitals, offices, etc.,” says Szondi.

Through a European consumer survey, the company found that about two-thirds of a shop’s sales come from loyal customers — people who buy something at least three times a week. Those customers are offered gifts for spending a certain amount of money at the shop and can be targeted with set pricing (for example, a daytime price, nighttime price or happy hour price, or a price for purchasing a group of items).

“People can really play with that in order to enhance loyalty,” notes Szondi. “And shop owners and supermarket owners gain new customers for their core business.”

“Shop24 can differentiate a mall or retail landlord from its competitors,” adds Casey. “People are impressed with the operation. Our ace in the hole [is] the fact that it’s an automated convenience store that will run 24/7. You can put it inside or outside; the product mix is very flexible; and it doesn’t complain. It just keeps taking in money and delivering product to satisfied customers.”