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New automated 'stores' popping up at local malls

DULUTH

A new kind of retail is popping up in Georgia malls, airports and hotels - one in which iPods and DVDs are sold in the same way as crackers and candy.

To many consumers, this novel concept will look like a familiar vending machine, though it takes the swipe of a credit card rather than a handful of quarters to purchase the expensive products behind the glass, such as Apple's ubiquitous digital music player or Sony's digital cameras.

But try not to call them vending machines.

The San Francisco company behind the idea prefers "robotic stores."

"Vending is a great concept but the products are often associated with knickknacks," said Zoom Systems spokeswoman Stephanie Bowers. "This isn't like getting a bag of Doritos. Our machines are automated retail and more like a store."

Zoom Systems has automated kiosks at Gwinnett Place Mall with iPods and Proactiv skin care products and a Sony kiosk at the Mall of Georgia with digital cameras, DVDs and other electronic devices.

The private company declined to release its sales, but cited its expansion as an indication of its success.

It has more than 100 robotic shops spread across the country, including 12 in Georgia at places as diverse as Hartsfield-Jackson International Airport, Emory University and Fort Gordon Army Base in Augusta.

It recently reached an agreement with Federated Department Stores to put automated retail kiosks selling iPods and other Apple accessories in at least 170 Macy's stores.

Although automated retail is not necessarily new, it is unclear exactly when and where it got started.

Zoom founder Gower Smith said Japan has been using vending machines to sell non-traditional items for years, but he wanted to take the idea a step further. He created Zoom Systems in Australia and moved the company to the United States in 2000. His first robotic shop was installed at the Argent Hotel in San Francisco last March.

Zoom plans to expand to more than 300 locations by the end of this year.

"This is really creating an opportunity for leading brands to place their most popular products directly in the path of consumers," Smith said in an e-mail.

Zoom is the largest player in the market, but not the only one.

RedBox Automated Retail, based in Oakbrook Terrace Ill., has kiosks with DVDs in grocery stores and McDonald's restaurants.

Retail analysts like Joseph Bona say robotic stores may catch on with consumers, but the concept does face a few obstacles.

"In many cases these are high-ticket items we are talking about," said Bona, president of the retail group for Coleman Brandworx. "Who do I call if something goes wrong during the transaction? Do I really want to take the chance on a high-ticket item in this format?"

Whatever barriers lie ahead don't appear to be slowing Zoom's ambitions. The company plans to have a network of 3,000 robotic stores by the end of 2007.

"We are revolutionizing retail the way the ATM changed banking," Smith said. "Today, people rarely walk into a bank to make a transaction. And people are becoming more and more comfortable with automation. We can now check-in at a kiosk at the airport, check-out at a machine at the grocery store, and pay-at-the-pump at the gas station. There is an entire generation of people getting accustomed to a convenience-seeking society."