Local company cashing in on new retail selling trend

As retailers obsess over ways to improve consumer experience in brick-and-mortar stores, West Carrollton-based Innovative Vending Solutions is cashing in on the next big industry trend – automated retail technology.

From clothing retailers to grocery store chains, retailers are using automated technology like kiosks and self-pay stations to make the shopping experience more efficient for customers.

Local entrepreneurs Jeff Thibodeau and Patrick McDonald teamed up in 2008 to create Innovative Vending Solutions, which works with small businesses and large corporations across industries to roll out automated retail machines — or smart vending kiosks.

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“Automated retail technology is essentially a fancy way of saying ‘vending machines for non-traditional products,’” Thidbodeau said. “We can dispense any type of item in almost any size, from t-shirts and shoes to electronics.”

The retail automation market is expected to be worth more than $18.9 billion by 2023, according to a study from Research and Markets. Automation will inevitably have a major effect on Ohio’s economy with the retail industry supporting nearly 1.6 million jobs in the state.

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For decades, vending machines have rarely been used for anything but snacks and drinks. Now, the machines are popping up in nearly every industry, and they’re implemented in out-of-the-box ways. Tech companies are using them to conduct cryptocurrency transactions while retailers like Old Navy are placing them in tourist areas or on beaches to sell flip-flops and sandals.

“It’s all about convenience,” Thidbodeau said. “We really have something for everyone.”

Chance meeting

Thidbodeau and McDonald’s venture started out as a chance meeting between the two men. Both grew up in the Dayton region, but met as McDonald worked to honor the legacy of his son. McDonald’s son, Nick, passed away after complications from Duchenne Muscular Dystrophy in 2007.

After his death, McDonald and his wife worked to expand their clothing store, Nick’s Novel-Tees, in honor of him.

“He never got to make it happen, so we did,” McDonald said.

McDonald wanted to expand the reach of their business without adding another store. After meeting Thibodeau through their business, the two decided to work together to create a vending concept that would make their vision a reality.

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More than a decade ago when they entered the industry, there were hardly any other businesses selling this type of technology. Now, the company has roughly 15 employees in addition to the out-of-state contractors that work with their team. They gross $2.5 million to $5 million annually, Thibodeau said.

The business has three distinct segments that they focus on: automated retail, inventory control and event machines. Beyond automated retail, companies also use the technology for inventory control – utilizing the machines to dispense controlled items in warehouse locations, so that they can keep track of items more easily.

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“Employees or guests are allowed access to items through the machines via a controlled method, like an employee ID or badge,” Thidbodeau said.

They also create a lot of companies looking to use a machine to give away products as a marketing tool to engage consumers. While they all function in different ways, the machines can be triggered to deploy free items if consumers connect their social media accounts, input data, or download apps related to the company.

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Industry growth

Innovative Vending Solutions works with about 500 brands, companies and organizations right now. McDonald and Thidbodeau told the Dayton Daily News that they only anticipate that number to grow as the industry evolves. Consumers are becoming increasingly comfortable making transactions with machines versus people, McDonald said.

Gordon Gough, the president and CEO of the Ohio Retail Merchants Council, said automated retail technology is here to stay. The technology allows retailers to be in spaces where they otherwise would have no presence.

“Smart kiosk machines are a big part of the retail omnichannel right now,” he said. “With smart kiosks, you can put them anywhere.”

During recent travels, he saw a BestBuy kiosk selling earphones right in the middle of the airport. Automated retail won’t have a direct effect on retail employees in the near future, Gough said.

“Automation will have an impact on all industries,” he said. “You’ll still need brick-and-mortar stores and online retail regardless. These kiosks are for consumers with limited time.”

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