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Vend-X is a service aimed to revolutionize the vending machine market in the US using disposable $30 vending machines and a simple low-cost operational model.
Project: A part of my final year thesis at IIIT, done in 2020
Project Mentor: Prof. Puneet Tandon, Mr. Aditya Chand
Duration of Project: 4 Months
My Role: Strategic design, user research, product design and service design
Vision: To disrupt the vending machine market with a disposable vending machine having a minimal cost of operation and a viable business model for the current market.
Approach: Gaining key insights into the vending machine market in the US and leveraging these to bring out innovation with product and service in order to make Vend-X a business revolution.
Global Research Strategy
Various cultural and systemic differences between the two countries pose a challenge to design research as an Indian designer remotely working to design something for the American market. These fundamental differences when realised can help designers become aware of new and global tools and deploy them to bridge this gap.
How did I bridge this gap?
1. By leveraging remote ethnography and online collaboration tools to gain qualitative insights
2. By conducting thorough primary stakeholder research as it was easier to find experts online during the pandemic
Primary Research Pipeline
1. Formulating research goals and objectives
2. Building contextual interview guides
3. Creating participant screeners and recruiting using Upwork
4. Conducting qualitative interviews on various topics throughout the project
5. Gather actionable insights on various aspects of the project
Upwork profile sorting
Expert interviews on Zoom
Key Insights from Market Research
The Vending Machine Businesses
1. There are 4.6 million vending machines in the US
2. Business operations are simple, with high margins from FMCG, people start vending machine businesses with small capital and grow over time
3. 70% of these vending machine businesses are profitable for 4-5 years and then are reported to slow down
1. No skill or training is required
2. Single person logistics
3. Adds convenience for customers
4. Easy to scale up based on leases
5. Quick revenue and rotation
6. Booming around being contactless during 'COVID'
1. Capital investment of $2,000-10,000 per machine
2. High maintenance cost over time
3. Highly prone to vandalism
4. It is difficult to ensure hygiene
5. Low revenues due to high competition
6. Saturation of locations as vending machines are a step into the real estate space
Shift in Mental Model: Value of Human Capital
Unline India, the American minimum wages for maintenance staff is very high ($20-35/ hour + Insurance). This difference makes operations such as re-stocking, maintenance, cleaning, etc. highly expensive and a major contributor for losses in the business.
Only innovation in product is inadequate to solve this problem.
A disruption in the service/ business is required.
The Solution: Product Innovation
1. The machines would be built of corrugated paper
2. Maximum cost of each unit: $100
3. Body has to be use and throw
4. The unit would comprise of a tech component and storage space
5. A low cost dispensing mechanism has to be created
Tech Component + Body
The Vend-X machines are a set of disposable, sustainable vending machines made of corrugated board that dispense products by scanning a QR code embedded within the artwork. These QR codes lead to a web application that is responsible for the display of product details and making purchases. Without and sound or hassle, consumers get their favourite products from the machine within seconds.
A simple architecture of the body is responsible for the quick and convenient setup of Vend-X machines.
At once, 100 products can be placed within the Vend-X machines in a tray, also made of corrugated paper. This tray is interchangeable and houses the hot-cut mechanism that we have developed to dispense products with minimal space, time and cost. Products would be placed in boxes that have the potential for branding for businesses and other partners.
Inspired by one of the satellite arm deployment mechanisms built by NASA, products stuck on polyamide films would be released and dispensed for customers. A custom circuit printed on the corrugated paper would be responsible for selectively heating portions of the polyamide film and severing it. The weight of products would then take over. This thought of printing circuits on paper was inspired by the widespread use of RFID tags embedded in paper tags and fabric in the clothing industry.
Interaction of the customer and Vend-X machines: With a simple QR scan of the box, customers would land on the web application of Vend-X to view product details and make a purchase. The machine would simply give them feedback on the application for payment action and product dispensing.
The Solution: Service Innovation
How might Vend-X provide a solution to mitigate unemployment and create a low investment business opportunity?
As a business, Vend-X would position itself as a service provider for the machines. They would be responsible for manufacturing and distribution of empty vending machines using standard delivery services like UPS within the US.
People interested in partnering with Vend-X could choose to become either operators or location providers. Operators would be responsible for stocking the vending machines with wholesale commodities and replacing the vending machines once all the product is sold. The location providers, usually people with access to the location would provide a space for the machine and ensure security to reduce vandalism. Often the operator and location provider could be the same individual.
A representation of the flow of goods and value within the system that Vend-X aims to create.
Vend-X would introduce applications for critical touchpoints as a stocking app for the operator and a consumer app for purchases. The computation of inventory and stocking would be built over the backends of the consumer and stocking apps to reduce the complexity of the vending machine hardware with an intent to minimize the cost of manufacturing. There would be other features such as vandalism alerts and trust establishment that would be built into the vending machine hardware.
Service Use Cases:
1. Vend-X operators
2. Vend-X consumers
Other Projects: Strategic Design
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