The winner of Coinstar’s “Next Big Idea” contest last year was San Diego-based EcoATM. The company’s kiosks scan users’ obsolete electronic devices and determines their value. The kiosk then offers users trade-up coupons, gift cards, cash or the opportunity to make a charitable contribution in exchange for the device. Coinstar obviously believes in the viability of the EcoATM model as a follow-up to its Redbox kiosk biz, having recently invested an unknown but presumably large amount of cash into the venture.
According to business site Bnet, Coinstar’s EcoATM gamble is a good one for the following reasons:
- Supply: Some 100 million cell phones are tossed into drawers and landfills each year in the United States, according to the National Resources Defense Council. And that supply is only going to get bigger.
- Financial incentive: Unlike its coin-counting business, which takes 9.8 percent of the user’s money, ecoATM doesn’t take — it gives or at least recycles it for you. A user inserts their device into the kiosk, where it is automatically scanned and a value is calculated. The consumer can opt for cash or a gift card — presumably to be used in the stores where the ecoATMs will eventually be located — right then and there. Or, they can donate the funds to charity. The device is then either sold on the secondary market, once all the data has been properly removed, or its melted down for the metal.
- Convenience: These days if you want to recycle a cell phone you have few options, all of which require effort on the consumer end. And we hate to make an effort. In most cases, the consumer has to mail the mobile device to the manufacturer or an ewaste recycling spot. That doesn’t sound like a big deal, but it’s just one more chore that gets put off indefinitely.
- A network is already in place: Coinstar’s kiosks are already in grocery stores like Albertson’s, King Soopers and Kroger’s, fast-food giant McDonald’s (MCD), Walgreens (WAG), CVS drug stores and Wal-Mart (WMT). Redbox has more than 22,000 kiosks on its own. Which means Coinstar already has an established relationship and network to roll out ecoATM on a large scale.
Does EcoATM sound like a winner, Insiders? Could this new venture be the next big kiosk success for Coinstar?