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Feature Article, December 2005
The New Impulse Buy
Thanks to a new automated retailing concept by San Francisco-based Zoom Systems, you can now purchase iPods and other hot products through, well, a vending machine.
Imagine a vending machine… stocked not with stale candy and soft drinks but with iPods, MP3 players, cameras, satellite radios, the latest audio books, CDs, DVDs and video games. This is precisely the idea behind Zoom Systems, a San Francisco-based innovator of automated retailing. And yes, impulse buys just got a lot more expensive.
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Zoom DVD is stocked with the latest release of bestselling TV and movie boxed DVD sets.
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The first Zoom Systems units, called “robotic stores,” began rolling out in U.S. grocery stores, airports, hotels and shopping malls in March 2005. “We are in the process of deployment in malls,” says Rick Cusick, executive vice president of Zoom Systems. “We first launched in two iconic malls in San Francisco — The Metreon and San Francisco Centre.”
Next, the company plans to install systems in malls in Atlanta (Perimeter, North Point and Southlake); Las Vegas (Boulevard and one or two others); Southern California; and Denver.
“Each mall we launch in will have between two and six Zoom stores,” Cusick says. “Malls will be a huge opportunity for us.”
Zoom Systems has five leading concepts: Zoom Travel (stocking MP3 music, iPods and accessories, wireless PC cards, Sony noise canceling headsets, Virgin prepaid phones and cards, cameras, film and batteries, adapters and chargers); Zoom Gift (selling prepackaged last-minute gift items such as themed CDs and Godiva chocolates); Zoom Spa (offering pampering and beauty products such as lotions, bath products, soaps, aroma therapy and candles); Zoom DVD (featuring bestselling boxed TV and movie DVD sets); and Zoom Office (offering inkjet print cartridges, CDRs and XM and Sirius Satellite radios).
History
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Zoom Gift offers last-minute gift ideas, with everything from themed CDs to Godiva chocolates.
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Zoom Systems is the brainchild of Gower Smith, founder and CEO. The company was founded in Australia in 1997, and migrated to San Francisco in 2000. In March 2002, Zoom Systems Corporation was acquired by San Francisco-based NewZoom, Inc. NewZoom then partnered with a $23 billion Japanese manufacturer of robotic delivery hardware that was proven reliable and secure. Key members of the Japanese team relocated to North America to establish volume manufacturing exclusively for Zoom Systems. Today, manufacturing is headquartered in San Diego with robotic stores produced in the company's 400,000-square-foot plant in Tijuana, Mexico. Investors in the company include Sierra Ventures ($1.1 billion committed capital) and NeoCarta Ventures, which led Zoom's $12 million Series B financing in July 2005. How It Works
The best thing about Zoom Systems is it does most of the work while mall owners/managers and customers reap most of the benefits. Zoom funds the development of the units, installs them and then manages them (which includes replenishing and servicing the units). Zoom also collects and analyzes data, then reports the results to mall management. The mall owner/manager simply provides the quality locations, monitors performance, and collects rent and revenue share. Mall management also gets to approve assortments, branding and esthetics. And they get the benefit of high-volume, high-dollar sales in a relatively tiny square footage (usually taking up only 28 square feet of floor space).
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Zoom Systems offers consumers the latest in high-demand products. Electronics are the biggest seller, with some items priced as high as $500.
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For consumers, Zoom Systems' new concept is a win-win all around. Think about it. How convenient would it be to have high-demand, high-quality products placed directly in your path every day? Plus, it's something different: automated retailing is a unique and entertaining shopping experience that is also extremely convenient and easy to transact. The robotic stores accept credit or debit cards, and the consumer's card is not charged until the item is in his or her hands (so there is no need to shake the machine like you do when a vending machine steals your quarters and gives you no soft drink). Consumers interact with the touch-screen to get information, select and pay for their purchase; then each product is fetched from the shelf by a robot which delivers the product to the electronic output delivery door (similar to a drive-up ATM). Fast, easy, convenient. Items are not dropped to the floor with a thud, like in vending machines.
Also unlike vending machines, Zoom Systems is not limited to low-cost items. In fact, the company has achieved its highest sales levels with consumer electronics in the $99 to $500 price range.
Which brings up the question of security. According to Cusick, Zoom Systems has several security measurements in place. Each unit is equipped with 24-hour video surveillance, and each unit is centrally networked and monitored, and it communicates to Zoom Systems' corporate and regional teams when any attempts are made to misuse the store. And don't underestimate the value of sturdy craftsmanship.
“The systems themselves are constructed of highly durable components,” Cusick says. “Even the glass display sections are high-resistance, shatter-proof glass.”
According to Cusick, Zoom Systems will have 100 high-performance units open by the end of this year. The company hopes to have 1,000 units open by the end of 2006, 3,000 units by the end of 2007 and 10,000 units open within 5 years.
— Katie Foxworth
©2005 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.
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