In this image released on Tuesday, Sept. 20, 2016, Kantar Retail uses virtual reality with eye tracking from SensoMotoric Instruments to create a virtual shopping experience at Path2Purchase Chicago, September 20-22, 2016. Press release and media available to download. (SensoMotoric Instruments via AP Images)
Startups are moving into retail in a big way. In recent months, Nordstrom, Walmart and Williams-Sonoma are among the established names that have acquired tech-focused startups to boost their offline and online capabilities. Ikea made news when it acquired TaskRabbit, an online platform that connects independent workers to opportunities, such as furniture assembly.
This month, the trend came into greater focus when Macy’s acquired the New York-based concept store Story. Brands pay Story a sponsorship fee to appear in a space that gets an entirely new design, product mix and marketing campaign every four to eight weeks. Story only has a single Manhattan location, but the Macy’s deal means that the rotating concept can now be potentially leveraged to hundreds of locations across the country.
These innovative partnerships are surging for a variety of reasons. Retailers are joining forces with startups as brick-and-mortar stores continue align the look, feel and function of their physical locations to market demands. Brands are acquiring companies or adopting capabilities from firms that specialize in experiential promotions, wireless product tagging and interactive displays. As stores become testing grounds for these new features, retailers say the partnerships will help them meet shifting consumer tastes.
Brands are also relying on the ingenuity of startups to meet shopper demands for a smoother buying experience. The digitally native menswear brand UNTUCKit is one example. Earlier this year, UNTUCKit launched a technology pilot at a New York City store to count customers as they come into stores, track items as they are tried on, and analyze sizes and styles that are ultimately purchased. The platform includes radio-frequency identification (RFID) tags and readers from SATO Global Solutions, and overhead traffic counters from the IoT platform RetailNext. With the technology, retailers can learn whether products get carried to another section of a store or even the number of times an item is handled before it sells.
Visual promotion is another area getting the startup treatment. Glass-Media Inc. makes paper-thin digital displays that include eye-tracking software so retailers can tell how many people have stopped to check out a storefront. Technology embedded within the screens can also measure foot traffic, and provide comparisons between the number of people in a store and actual point-of-sale totals.
Intelligent displays are moving into the fitting rooms as well as brands look to create a seamless digital experience in physical stores. Canadian firm iMirror provides an interactive touchscreen that allows shoppers to choose new sizes, colors or products without leaving the fitting room. That’s proving essential given that those who make it into a fitting room are seven times more likely to make a purchasethan those who stay on the sales floor.
So don’t be surprised if this year’s RECon event feels more like a technology incubator inside of a retail real estate trade show. The industry is rapidly transforming as retailers update their stores and customer experiences. And if the past few months serve as any indication, 2018 is likely to see more acquisitions and partnerships that support the changing way people shop.