Even though eCommerce is expanding at supersonic speed, this digital monster is not as dominant as it is painted. Currently, its market share globally reaches only about 16.4% and in the USA its share of total retail is projected to reach 12.4%. This is the main reason why retail startups crowd the scene with their innovative solutions for the industry.
Vendors in the retail domain are very much ready to fight for every customer and invest loads of money and talent to develop technological solutions that will enable them to bridge the gap between the online and offline experiences.
The emergence of innovative retail technologies is rather systematic and picked an exponential dynamic, covering several fields, like AR, VR, chatbots, and proximity marketing.
We invite you to do a deep dive into the world of retail startups, shaking things up from conventional ways and injecting the once boring brick-and-mortar shops with the fun new twists that keep customers interested in offline shopping.
Challenges For Retail Startups In 2020
Retail startups began dealing with and adapting their policies to the GDPR in 2019 and now they are facing a brand-new challenge: the COVID quarantine lifestyle. eCommerce has gone up in value and physical retail shops have taken a hit amidst the pandemic.
Now systems are being re-wired to place orders in a flash, allow for curbside pick-up, deliver faster and ship smarter, with minimal in-person contact. Even the fast dwindling ranks of human warehouse workers that have been trimmed significantly due to higher levels of automation now have to be reduced further wherever possible.
When it comes to retail solutions, the need for physical safety and social distancing may give rise to breakthrough solutions that will enable more advanced levels of implementation of these practices.
Remote work and video conferencing introduced fresh insight into office work habits and routines, injecting some efficiencies into meetings and brainstorming sessions.
Tech Trends Embracing and Defining Retail in 2020 and Beyond
Face Recognition
Facial recognition technology is here today in retail and will be a huge part of the future. If you have seen a mini-series on deep fake video technology "The Capture," you know what we mean.
For retailers, face recognition is widely experimented with but is rarely talked about, for fear customers might find it creepy.
For example, chains may be scanning faces caught on fixed cameras and checking them against a database of known shoplifters. To compile a base of potential criminals, shops sometimes provide an alternative to individuals caught shoplifting: consent to take their picture or be arrested.
This works both as an immediate deterrent and a long-term opportunity to cut potential losses arising from professional shoplifters.
Shop-Assistant-Less ShopsAmazon Go was the first store ever that has all the technology to enable full-fledged shopping without ever interacting with a human.
This could well be the future of retail – even for grocery shopping, in which goods need to be fresh, so ordering can be done via platform eCommerce while fulfillment is local.
Data Security
GDPR brought a lot of extra workload for the entire retail and eCommerce industry, while at the same time providing more peace of mind to consumers about their personal privacy.
It’s a fine line for retail marketers though, as they need to find a balance between the advantages of personalization and data security.
AR / VR
When it comes to bridging the gap between offline and online shopping, VR and AR technologies are the first ones that spring to mind. To blur the line between the brick-and-mortar shops and the online experience, top retail startups delve into augmented reality and virtual reality solutions.
LBS: Location-Based Services
Location-Based Services, like Bluetooth beacons, help push personalized offers to loyal customers' brand mobile apps when they are near the stores. This is a powerful loyalty booster that counteracts the practice of showrooming.
About: a curated wholesale marketplace that helps small brands find retail spaces to offer their product in.
Founded: 2015
Founder[s]: Ali Kriegsman, Alana Branston
What makes Bulletin unique? The company runs five physical stores in New York, so is very familiar with the pains of retail in 2020: poor mass-market assortment, gigantic MOQ, and tiring exhibitions flooded with the same brands time after time. This is why the founders created a marketplace with lots of unique brands that are boutique in nature, offering amazingly designed items that are not accessible on Amazon or other major sites.
Offering net-60 terms, the company essentially covers all risks for a retailer trying a new brand, happily accepting the unsold leftovers (consignment model), and paying for the shipment. This provides a much-needed exposure and access to retail space for small designer brands and a unique risk-free assortment for shop owners.
Bulletin launched a new SaaS-type service, actually AaaS in fact: assortment as a service – a software solution that provides buying insights for retailers based on a multitude of data points from historical sales, trends, best-sellers, etc.
About: A family experience store disguised as a toy shop
Founded: 2018
Founder[s]: Ben Kaufman
What makes Camp unique? If you thought there’s nothing the toy industry could offer to save toy retailing from an inevitable demise in the face of growing eCommerce, Camp may have so proven you wrong.
Having launched five stores across the USA, Camp is redefining the face and feel of toy retail by offering its clientele a creative ever-evolving space to hang out with the entire family. Virtual parties, free activity books, themed camps, like Cooking camp, Travel camp, Toy Lab Camp are just part of the offering – which are available both as offline and online experiences.
One of the Best Retail Startup CAMP | Cooking Camp
About: 100% vegan cruelty-free makeup brand to highlight personal beauty
Founded: 2015
Founder[s]: Mazdack Rassi, Dianna Ruth, Georgie Greville, Zanna Roberts Rassi
What makes Milk Makeup unique? Designed in line with the mentality of the generation Z, this brand stole the hearts of many girls with its 100% vegan, paraben- and cruelty-free formula and philosophy. Unleashing the inner beauty of its wearers, Milk Makeup is engineered to highlight unique features, not cover them up.
About: Athletic outfit brand that is sustainable and wants everyone in the world to move
Founded: 2013
Founder[s]: Ty Haney
What makes Outdoor Voices unique? The brand humanizes sports, taking ideals of perfection and flawlessness out of exercise, and instead emphasizing the fun part of being active while out with friends.
The philosophy of the brand is not about an exhausting sprint for short term results, but rather the long-term enjoyment of the sporty lifestyle with friends.
The Recreationalist is a newly-launched marketing platform with lots of community-related content.
About: Science-first female-founded vitamin brand that cares about what goes into the supplement – and your body.
Founded: 2015
Founder[s]: Katerina Schneider
What makes Ritual unique?: Ritual is a female-founded vitamin brand that puts cleanliness of the vitamin formula at the forefront of its concept, guaranteeing only the purest ingredients in its thoroughly tested formula.
About: Snowe brings affordable durable luxury to home design
Founded: 2015
Founder[s]: Rachel Cohen and Andrés Modak
What makes Snowe unique? Snowe founders created a brand that calls for using things that are “simply exceptional every day.” The everyday part not only means that luxury is the new norm, it also means that luxury is durable, lasting day in and day out for years. Quality materials married to impeccable design are available in Sleep, Bathe, Eat, Drink, and Scent categories.
About: First-ever drone-reliant software-only inventory management system
Founded: 2017
Founder[s]: Sankalp Arora, Daniel Maturana, Geetesh Dubey
What makes Gather.Ai unique? Drones that are capable of collecting inventory data by flying around warehouse islands, counting boxes, and scanning codes is the vision come true for Gather.ai. A 100,000 sq. ft. facility with 1500 bin locations only takes two days to automate with a state-of-the-art combination of robotics, deep learning, and computer vision technologies embodied in this revolutionary product.
About: the first-ever stock market for authentic sneakers and other fashion
Founded: 2015
Founder[s]: Dan Gilbert, Josh Luber, Chris Kaufman, Greg Schwartz
What makes StockX unique?
The company created a stock marketplace for sneakers. It acts as a middleman, who checks and guarantees the quality and authentic origin of the goods traded on the stock exchange.
It’s kind of like Amazon for sneakers, but there is a stock market game to it with all the bidding / lowest price options.
About: Location-first micro fulfillment platform
Founded: 20
Founder[s]: Elram Goren, Ori Avraham, Shay Cohen.
What makes Fabric unique? With $136 in investments, this company is a well-funded fulfillment company. With solutions for grocery fulfillment, general merchandise, and B2B fulfillment and stock replenishment, they are capable of providing one-hour or same-day delivery or pick up.
Fully robotized and powered by AI, Fabric's on-demand fulfillment services cater to small and large eCommerce.
About: Smart customizable cashless vending machines
Founded: 2016
Founder[s]: Paul McDonald, Ashwath Rajan
What makes Stockwell unique? Stockwell offers the vending machines of the future. Clients only need an app to complete a purchase, the inventory is selected according to business needs at a particular location (think student campus vs gym), with each machine’s stock fully managed by Stockwell. This is one of the retail startups in 2020 that will change the aesthetics of vending for good.
About: Conex enables a retail environment with a digital twist for a connected customer.
Founded: 2016 (1973 for DIAM)
Founder[s]: Yvon Pollain (DIAM)
What makes Conex unique? Conex bridged the gap between the online and offline shopping experiences due to its sleek retail equipment design that incorporates digital elements with visual impact, like screens. The company provides a variety of products for premium retailers, e.g., smart screens, walls, platforms – to ensure a digitally-saturated offline experience.
About: Top shelf fresh groceries delivered home for free
Founded: 2016
Founder[s]: Kevin Li, Pradeep Elankumaran
What makes Farmstead unique?: Designed to rival supermarket groceries in price, quality, and effort, this retail technology solution was primed for success from its conception.
With smart shopping lists including recipes, the option to receive free delivery when joining a neighbors' delivery route, automatic refill of every household's staples with "Refill and Save" program, Farmstead made 100,000+ deliveries in the Bay Area alone since 2016!
About: On-demand delivery app for last-mile door-to-door deliveries
Founded: 2020
Founder[s]: Lawrence McCord, Josh McCord, Luke Denny
What makes Frayt unique? The application connects clients with the drivers, who undergo meticulous background checks to become verified suppliers. A perfect solution for small and medium eCommerce.
About: A new-generation media platform that matches your business with the right beat
Founded: 2009
Founder[s]: Garrett Dodge and Ketu Patel
What makes RockBot unique? Ambiance means a lot in merchandising, thus RockBot took on a challenge to revolutionize the music supply in physical stores. The platform has 18 million licensed tracks to please every taste, sets up in seconds, enables delivery of brand messages, and allows your customers to order tracks.
About: A quality modular design furniture brand with the cheapest delivery costs
Founded: 2015
Founder[s]: Kabeer Chopra and Stephen Kuhl
What makes Burrow unique? One of the best retail startups in the furniture category, these gents hacked the major cost factor when it comes to furniture: shipment costs. By creating a modular design, they ensure every box is in line with the UPS and FedEx commercial freight limits. This trick allows savings that producers generously share with their customers.
Development Solutions For Retail Startups
Now that we have reviewed some of the hottest retail startups, you might have some ideas about implementing one of these technologies to drive your market share – be it in eCommerce or offline retail.
Innovation in retail is our passion, specialty, and creative inspiration. The Zoolatech team transforms a vision in your head into a piece of code that converts the newest technology into new surplus in your bottom line. Our diverse pool of talent has background and expertise in AR / VR, machine learning, big data, and more. We keep enhancing and perfecting our already extensive expertise in retail software development.
If still in doubt, check out our portfolio and expertise.
In case you don’t know exactly what technology you would like implemented in your stores – be it physical or digital – let’s discuss your pain points. We love seeing solutions behind your challenges.
Drop us a line, or fill out a contact form to get your company featured in our next list of the best retail startups in 2021.
