This past week McDonald’s pulled the plug on their tests of robotic self-serve convenience stores in the Washington and Baltimore areas. These giant vending machines, called a RedBox, were placed adjacent to McDonald’s restaurants. McDonald’s marketing plan was designed to capture business from their busy restaurant customers by saving them an extra stop for that gallon of milk on their way home. McDonald’s is looking to provide one-stop solutions for their customers. This explains recent tests of DVD vending machines and Wi-Fi access in their restaurants.

What McDonald’s has missed here is subtle yet obvious. For years they have saved millions of people time and effort by passing food orders through a window in the side of their restaurants. The ubiquitous drive-thru window has spread from banks to restaurants to pharmacies and even liquor stores. So much so that Americans now wish to do as much as possible from the driver’s seat of their vehicles. The RedBox failed because, while it offered 24/7 access, people had to get out of their vehicles to use them. Given this configuration people would decide that stopping, parking getting out making the purchase and then getting back in their vehicle would either required time they didn’t have or could be better spent at a conventional convenience store or traditional grocery store.

RedBox is the solution to declining non-gas sales at gas stations due to the implementation of pay at the pump technology. People no longer have to go inside the store to pay for their gas and perhaps buy a few things or at least a soft drink. They are, however, already making a credit card purchase for gas. Why not position a Red Box adjacent to the pump so people (who are already out of their vehicles) can spend that three or four minutes of pumping time shopping for convenience items. Those items can easily be added onto the in process transaction. Co-locating Red Boxes at gas station convenience stores solves another issue that led McDonald’s to kill the test. Restocking and servicing the machines proved to be too costly. Store personal that stock the store can also stock the Red Box. This would save dedicated trucking and staffing costs. The RedBox machines must be located within steps of the pump. If a person has to leave the area of the pump and their vehicle the convenience is lost.

Right technology wrong implementation.

Comments

[Paul W. Swansen]

Peter: I seem to remember an article/blog from a few months ago about the implementation of the vending machines in Japan and how you can get nearly everything and anything from them. Here with our obsession with auto travel there is a bit of an implementation issue which apparently McDonalds found out, fortunately for them rather quickly. It would seem that product placement, in this case, the vending machines would be better placed where people are waiting, bus stops/terminals, light rail stations and the like. Maybe they need to take a clue from the newspaper distribution folks and follow their prime placement where the newspaper kiosk's are located.