Vending Machines To Take Over Commercial Property Space

Redbox (an automated DVD kiosk rental chain) has effectively put video rental company, Blockbuster, out of business in the USA and more automation is on the way. As retailers are losing their jobs and becoming automated, less space is needed, threatening the commercial property values in a major way. Whilst the USA arm of Blockbuster has filed for bankruptcy, it shouldn’t affect any of the stores across the rest of the world.

Although Blockbuster going under was hard to sympathise with, as they put many small video rental stores  out of business, it is still necessary to watch, as technology replaces retail not only for the commercial space which is impacted but for residential agents who know well that nearby abandoned shopping centers are a detractor for buyers.

According to the LA Times: ‘Retail employment has barely budged over the last year despite stronger sales at major chains. Meanwhile, $740 billion was transacted through self-service machines in 2010, up 9% from 2009, said Greg Buzek, president of technology research firm IHL Group of Franklin, Tenn. He projects that will rise to $1.1 trillion by 2014.’

As automated machines increase in popularity and become commonplace, the impact could well ripple across the retail commercial property sector.

The LA Times continued: ‘Vending machines now sell iPods, bathing suits, gold coins, sunglasses and razors; some will even dispense prescription drugs and medical marijuana to consumers willing to submit to a fingerprint scan. And shoppers are finding information on touch screen kiosks, rather than talking to attendants.’

Corona vending machine firm AVT Inc. is currently designing a fully automated gas station that will dispense gasoline, snacks, bottled drinks and even hot coffee, all with the swipe of a credit card, all these functions can be administered without any form of a sales assistant. It is possible that many convenience stores and other retail outlets will eventually follow this route. AVT’s vending machines don’t demand paychecks, call in sick or give incorrect change. They work 24 hours a day and give instant feedback on sales and inventory.

It will be very interesting to see what effects technological developments – such as these machines – will have on the retail commercial property market over the coming years.