Coin operated enterainment makes the most of customers' loose change
Published: 15 October, 2008
Coin operated machines are an ideal way for shopping centres to generate extra revenue without using up too much space in the mall, and with a variety of new products now on the market, there are plenty of options to choose from.
VP Solutions' Jonathan Simpson has been dealing with an increase in requests from shopping centres wishing to fill some of their mall space with coin operated machines, such as toy vending, kiddie rides and massage chairs.
"Generally, commercialisation has been a buzzword for a number of years and it still is," he says. "In the past, shopping centres have tended to say 'I don't think I have space for that', but over the last six to eight months some shopping centres have approached me and asked me to look at the market for a particular product, which hasn't happened before. There's been more interest and flexibility on locations."
Simpson gives two reasons for this. Firstly, he believes that shopping centres are finding it difficult to negotiate rent rises with tenants; and secondly, with the credit crunch, billions of pounds have been written off the value of shopping centre portfolios.
"The rent from vending machines doesn't make a huge overall impact on shopping centre revenue, but if we can offer the centre a rent then the asset managers capitalise that revenue," explains Simpson. "So fixed rental income is becoming something that shopping centres are becoming more interested in."
Typically, he says machines operate on a revenue share basis rather than a rental agreement.
Simpson acts as a broker for a variety of manufacturers of coin operated machines, and says kiddie rides and toy vending machines are consistent performers. However, he insists that any coin operated machine is going to perform well no matter what the condition of the market.
"It's really quite recession proof," he says. "Whether it's a kiddie ride at 50p, toy vending or a massage chair at a pound, people always have coins in their pockets. Parents will still spend money on their child and a pound is considered small change, even when entering a recession. If the kids are demanding in the shopping centre, parents aren't going to refuse a pound, while they might well refuse to buy something that costs a lot more from a retailer."
So which coin operated machines should shopping centres keep a close eye on?
Photo-Me is continuously developing new products that are ideal for the shopping centre environment. And with many of its machines appealing to the younger market, the company ensures it keeps its finger on the pulse of what's hot and what's not.
One of its newest ideas has been borne from the popularity of the Boule machines. Marketing director Francois De Freitas says: "We have these dispensers called Boule which have been in the UK for a long time. Collectables are placed in capsules and each capsule costs £1, but now we've realised we need to provide something that really attracts the kids because they're becoming more selective and fussy. At the moment European companies are providing us with balls like Spiderman or The Simpsons and we've decided to manufacture our own product that will be more appreciated by the UK market."
De Freitas says the first product focuses on collectable bouncy foam balls featuring The Dog - a new brand, which has come from Japan and the US and is proving hugely popular with kids. The Dog can be adapted to different merchandise. For example, in Woolworths The Dog is being sold in a variety of forms from soft toys to pencil cases, while this year McDonald's branded its Happy Meal with The Dog.
"We've negotiated a licence ourselves and manufactured our own little balls that will be attractive to the kids," says De Freitas. "We have The Dog, Monster Jam, Rupert Bear, Basil Brush and Postman Pat. The kids are now more attracted to these kinds of products because they are part of their culture."
The first of these machines will be available from November.
VP Solutions agrees that toy vending is popular. As well as the 'ever green' brands that always sell, such as Pokémon and Winnie the Pooh, Simpson says it also uses brands such as High School Musical and Wally.
Photo-Me has also enjoyed great success to date with its coin operated version of Dance Heads, an innovative entertainment concept that has taken the world by storm. Dance Heads superimposes participants' heads on professional dancers' bodies while they sing along to some of the greatest pop hits of all time. The outrageous effect is completed with fully animated backgrounds and is recorded on your very own DVD that can be taken away.
After the trial unit was proved to be a success in a variety of shopping centres, Photo-Me rolled the machines out to 19 sites all across the UK, including thecentre:mk, where the first machine was installed.
Steve Merrikin, national commercial manager (UK Operations) of Photo-Me, says: "The idea behind Dance Heads is to give ordinary members of the public the thrill of becoming a pop star in their own music video."
The machines list 20 to 30 songs for customers to choose from and in the lead up to Christmas this year, Photo-Me is also adding 'Santa Claus is Coming to Town' to the choice of tracks. The machine is also proving popular with international visitors. For example, within two days of one being installed in Milton Keynes, visitors from Finland witnessed the operation and contacted Photo-Me with the intention of importing it.
Still remaining with kids entertainment, Primary Leisure recently launched its new product called 'Kid's TV'. Like Dance Heads, the concept was launched at thecentre:mk.
The product, located next to Starbucks, enables children aged between two and four years to watch four- to five-minute clips of their favourite television characters, such as Basil Brush, Postman Pat, Rupert Bear and Jim, Jam and Sunny for £1 or £2 for three clips. The pod is ideally placed to keep the kids entertained while mum and dad have a coffee.
"It's an age group that's not really catered for in shopping centres," says Primary Leisure's Robin Mitchell. "It doesn't cost the shopping centre anything as it's operated on a revenue share basis. It's touch screen operated and very easy to change the content."
The Massage Chair Company (TMCC) has recently signed a three-year deal to install its new range of high quality coin operated massage chairs into Capital Shopping Centre sites, including MetroCentre Gateshead, Lakeside Thurrock, Braehead shopping centre in Glasgow, Harlequin shopping centre in Watford, Chapelfield in Norwich, The Potteries in Stoke and The Glades in Bromley. The deal sees coin operated massage chairs installed at the majority of CSC sites with a view to helping improve the customer experience and adding commercial value.
John Holloway, managing director of TMCC, says: "We're very excited about this deal - we feel our new design of chair is an ideal fit with the premium high footfall sites in the CSC estate, and it also gives us a great platform to further our expansion into other premium shopping malls"
The new range of massage chairs is sleek and contemporary and has been designed to complement the new breed of premium shopping centres. Holloway adds: "We wanted to take the concept of coin operated massage chairs to the next level and develop a product that can perform well and look great - we feel that this new design really sets the standard."
VP Solutions was involved in brokering the deal. Simpson says: "When we talk to shopping centre managers about massage chairs, they're sometimes quite sceptical about them, but we did a trial in The Glades for a few months to show the chairs are a consistent performer. People say the whole idea is a bit of a novelty, but that's not the case. The chairs perform well. People want to take a rest from their busy day shopping but there's also a fair number of teenagers in all shopping centres and some use the massage chair for the novelty factor of it, creating a bit of fun."
Other popular machines, according to Simpson, include a mobile phone charging unit, which now also includes a 17in LCD screen you can advertise on, as well as various washroom vending machines such as Pinks disposable hand wipes and Durex dispensers.
Mini Melts ice cream vending machines are also proving popular. Mini Melts are small frozen balls of ice cream in a tub and there is a window in the machine to watch the ice cream being made.
"It's a bit of theatre for the customers. As well as getting a small tub of ice cream they also see it being made in the machine," says Simpson. "And because the shopping centre environment is constant, whether it's hot or cold outside, ice cream vending sales are good all year round."
Alan Fleming of FX Simulation says its simulators are ideal for destination shopping centres where there is a cinema, restaurants and an atrium with cafés. Halton Lea shopping centre in Runcorn and Queensmere Observatory in Slough are the latest malls to introduce a simulator to their malls, while McArthurGlen, Lend Lease and Capital Shopping Centres are already reaping the benefits in their shopping malls.
Fleming points to the Dubai market where shopping centres are competing for shopper loyalty.
"There are eight 'super malls' within 30 minutes drive time in Dubai. All the mall managers there are trying to out-do each other. They want to get people in and create loyalty to ensure that customers come back, so with simulators a given mall can offer something different that another doesn't."
Customer demand speaks volumes, and right now it's deeming coin operated machines a necessary element in any modern mall.
