As regular brandchannel readers know, we're fascinated by Japan's tech innovations when it comes to evolving brands and advertising. The latest experiment that caught our notice: a pair of vending machines recently unveiled at Tokyo's Shinagawa train station.
Japan has over 5.2 million vending machines — that’s one for every two dozen people — but these particular vending machines sense and interact with customers according to their age and gender. Reactions, naturally, are mixed.
The JR East Water Business Co. developed the machines with Omron and Fuji Electric Retail Systems, with one simple goal: increase sales through more sophisticated targeted advertising. Although the 47-inch touch panel display looks like soft drink choices, it actually houses several automatic modes, recognizes sex and age with 75% accuracy, and recommends purchases accordingly.
Customers can zoom in on a product for more information. While 50% of Japanese machines sell drinks, the rest sell a wide variety of goods, from utilitarian to kinky: books, ramen noodles, liquor, underwear (new and used), iPods, porn, live lobsters, fresh meat, eggs and potted plants.
When potential customers are not in the immediate vicinity, the machines switch to an advertising mode that reflects the season, time of day, and temperature. A message such as “I’m thirsty!” may pop up with big, beckoning eyes.
The machines use WiMax high-speed Internet to display real-time news, and are also programmed for "empathy" -- for instance, if a natural disaster such as an earthquake strikes, it will dispense beverages free of charge.
JR East Water Business plans to install 500 of the high-tech vending machines, about 5% of the company’s total of 9,400 vending machines, in railroad stations throughout Tokyo and nearby cities within the next two years.
As we've noted, Japan has pioneered billboards and vending machines as electronic marketing tools to target specific consumers. Panasonic, Samsung and NEC are all developing facial-recognition technology which translates into quantitative data for advertisers.
"From a sponsor's perspective, you don't want to pay for something without knowing that people are going to see it," explained NEC’s group manager of digital signage, Tomoyuki Osaka, to the Wall Street Journal.
Last year, Japan's brands and manufacturers saw $62 billion in sales just from vending machines, according to figures from the Japan Vending Machine Manufacturers’ Association.
The nation's high-tech screens are also appearing on storefronts and shopping-mall maps. Electronic displays contain QR codes, those increasingly ubiquitous black and white pixilated images, which when photographed, can direct users to websites, such as movie billboards directing mobile users to movie-related URLs, or shopping-mall maps that lure shoppers via coupons to stores for redemption.
According to DisplaySearch, in 2009 North America accounted for 41% of all public display shipments; Europe, the Middle East and Africa about 33%; and Japan about 8%. 2010 projections are that the Japanese market will grow by more than 50% this year, oupacing the estimated 17% growth for North America and 28% for Europe, Middle East and Africa.
Privacy advocates are concerned. Yasuhiko Tajima, a professor at Tokyo's Sophia University who heads the country's Campaign Against Surveillance Society, commented to the Wall Street Journal that "The problem is that there's no clear regulation that prohibits those signage systems from storing images. As the WSJ added, this leaves the issue “on the conscience of each company that builds these signage systems.”
Interactive, smart kiosks certainly represent a bonanza for marketers to target their brands, a more sophisticated (and relevant) utility for consumers — and a growing concern for privacy advocates already outraged by marketers' increasing ability to track and target private citizens. Tell us what you think in the comments below.