Seeing as this is a blog written from Japan, it would be incomplete without a post about vending machines…

But what angle to take? Most have already been covered – photos of their outsides and their insides, lists of the range of exotic goods on offer, speculation about whether there really ever were machines selling schoolgirls underwear? One guy has even written a blog following 5 years in the life of a single machine!

So for my post, I’m going to write about two very different vending machine innovations that have recently begun to appear around Tokyo.

The first is a new machine brought to us by JR East Water Business Co, a subsidiary of the railway firm, JR East Co, that has begun to appear at select locations around Tokyo’s rail network and is scheduled for a more widespread rollout across 2011.

Believe me, you’ll know it if you’ve seen one of these! Instead of the usual low-tech setup, these new machines are basically massive computer screens that feature rows of virtual products, which flash and twinkle at passing pedestrians.

But even more amazing, the machines also house face-recognition software that allows them to make drink recommendations based on the estimated age and sex of whoever is currently standing in front of it. Using sales data and tabulating against conditions such as the time of day or outdoor temperature, recommendation signs pop up beside drinks that the program deems suitable.

So if it’s late at night and the machine pegs you down as a salary man then expect it to offer you something hot and sweet, as this is what the majority is supposedly buying.

All sounds very flash I think you’ll agree. Here’s a video of one in action…

Far less flashy are Coca Cola’s new range of low-energy machines. Coca Cola own around 1 million vending machines in Japan and their latest model is not only designed to strip the energy needs for refrigeration down to as little as possible, they also feature solar-panels to power their LED lights.

All very eco but unlikely to get people stopping in the street.

So which of these is the more valuable innovation?

Well according to the sales data for JR East Co.’s pilot machine, it appears to have been a real success, with sales tripling over those from regular venders. And anecdotally, I’ve seen how these machines attract people’s attention, with their flashing lights and technological ‘wow’ factor.

But in the long-run..? Once these machines become commonplace and the novelty factor has worn off, what real value are they offering to consumers? Companies using this kind of technology are walking a thin line between offering a service and invading people’s sense of privacy. But even if the privacy issue is dealt with sensitively, do people really want or need to be told what to do by a machine?

At best this innovation is adding very marginal value for customers. After all, they’ve managed to make their own choices perfectly well up until now. At worst it’s intrusive and just downright patronising. Even key advertising figures – like Russell Davies, influential blogger and head of planning at Ogilvy and Mather – are beginning to question the long-term value of this type of technology (see prediction 5 here)

Any additional also need to be balanced out against the increased costs of production and maintenance and the ongoing energy costs, all of which look set to rise as the real costs of energy production and carbon emissions are gradually factored into prices.

Which is where the Coca Cola machines begin to look like a more far-sighted innovation…

Whilst they may not have the glitz to bring in much new business in the short-term, to squeeze whatever minimal value is left from already largely satisfied consumers, they are likely to pay off in far more valuable ways in the long run.

Firstly, they cut down on real running costs down, decreasing energy consumption and saving Coca Cola money, an effect that is likely to increase as energy prices begin to better reflect their true cost to society.

But perhaps even more importantly, they signal that Coca Cola is about more than just profit. By cutting down on energy consumption, Coca Cola is not only benefitting itself but also society more generally. They are adding real value, not just increasing consumption. This sends out a powerful signal, subtly feeding into customer’s brand perceptions but also, and perhaps more importantly, attracting and motivating employees, who are after all the most valuable resource of any organisation.

All signs point towards the fact that people are coming to expect a more responsible role from business. Far-sighted companies that are waking up to this fact this fact now, before they are forced to do so by increased competition or regulation, will be the long-term winners over their less resilient (and unfortunately more numerous) short-term fixated competitors.

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