Miniature stores, maximum profits

Clark Behind The Headlines

From HLN's Money Expert Clark Howard

Because of the phenomenal increase in computer power from processors, you are going to see automated machines popping up all over the country soon. You are going to see tiny little automated stores opening up. They’ll specialize in particular areas, and will provide convenience for a variety of products that would not have been available otherwise in such small spaces.

Here’s an example I saw in the New York Times. For buying cigarettes, there’s a machine now being used in Asia. When someone goes up and tries to buy cigarettes, it analyzes the person's skin with a smart brain and an electronic eye. And if it thinks that the customer looks too young? It won't let them buy cigarettes.

The one that got a lot of news coverage recently is in the Middle East, where people can buy gold right out of a machine. Does that tell you how frenzied people are about gold?

But those are kooky kind of things. The point I'm making is that the technology has improved to the point where it will be possible to have vending machines that sell things like sophisticated electronics and fancy women's makeup.

I use the word “vending” but that's not really what it is. You name any product category and it’s now going to be possible for you to buy it at your convenience. And the thing for retailers is profitability, because they can do so much in a tiny space. It completely changes an industry.

Think about my favorite example of all, Redbox, which has destroyed the traditional model of renting movies. With that little tiny kiosk that is smart as all get out, they have managed to displace an entire video rental industry.

So just think about if you're entrepreneurial. Think about where you see an opportunity to drive costs down and provide people with selection and 24-hour service. You might meet a need or a want and create a fatter wallet for yourself.

Filed under: Behind the Headlines • Clark Howard • Commerce