iPod Vending Machines Land at Airports, Hotels

A San Francisco company specializing in automated retail has plans for 10,000 consumer electronics vending machines installed in high-traffic places like airports and hotels in just a few years.

Zoom Systems already has 100 units installed, and Zoom chief executive officer Gower Smith hopes the company's strategy will increase sales of high-end Apple Computer gadgets and other electronics through kiosks.

Currently, the company's self-serve kiosks can be found in places like the Las Vegas Hilton Hotel and the luggage area at San Francisco International Airport. They sell everything from iPods to accessories. Additional units are planned for supermarkets and shopping malls.

Smith believes Zoom will do for retail what ATMs did for banking, because the kiosks can dispense all types of digital toys.

"This e-channel is all about taking the most popular brands and placing them in high-traffic locations in remotely managed stores," he said. "Apple is the hottest product in the digital music category, so iPods and accessories sell very well."There's some data to suggest that retail kiosks are growing in popularity. Summit Research Associates Inc., for instance, expects by 2008, North America will account for nearly 1 million interactive kiosks of the 1.5 million units installed worldwide, up from 438,000 and 734,000, respectively.

Francie Mendelsohn, president at Summit Research, a research firm focused on sales through kiosks, said the lack of digital content, such as music, in Zoom's kiosks could potentially slow sales. "If you don't have the content, what the heck do you need with the system," she said. "The ability to buy really cool electronics is what has set them apart, but what's missing is the content."

Vending operators can add touch-video screens on or near the machine, where consumers can select the item, swipe their debit or credit card and the machine spits out the product. There's an 800 number to call if a problem occurs.

Digital cameras, travel adaptors, noise-canceling headsets, and pre-paid phone cards are some of the best sellers. The kiosks aren't limited to electronics. Branded skin care products are coming next.

In related news, Zoom Systems on Wednesday closed a $10 million Series C financing round led by Goldman, Sachs & Co. that will speed deployment of the company’s network of "40-square-foot robotic stores," the company said. Sierra Ventures and NeoCarta Ventures led earlier rounds of financing for Zoom. Jeff Loomans and David Schwab of Sierra and Peg Jackson of NeoCarta serve on the board; Ram Venkateswaran of Goldman Sachs will now serve on the board. Zoom Systems’ chairman Bruce Quinnell also participated in the round.0