All posts in “retail”

The limits of coworking

It feels like there’s a WeWork on every street nowadays. Take a walk through midtown Manhattan (please don’t actually) and it might even seem like there are more WeWorks than office buildings.

Consider this an ongoing discussion about Urban Tech, its intersection with regulation, issues of public service, and other complexities that people have full PHDs on. I’m just a bitter, born-and-bred New Yorker trying to figure out why I’ve been stuck in between subway stops for the last 15 minutes, so please reach out with your take on any of these thoughts: @Arman.Tabatabai@techcrunch.com.

Co-working has permeated cities around the world at an astronomical rate. The rise has been so remarkable that even the headline-dominating SoftBank seems willing to bet the success of its colossal Vision Fund on the shift continuing, having poured billions into WeWork – including a recent $4.4 billion top-up that saw the co-working king’s valuation spike to $45 billion.

And there are no signs of the trend slowing down. With growing frequency, new startups are popping up across cities looking to turn under-utilized brick-and-mortar or commercial space into low-cost co-working options.

It’s a strategy spreading through every type of business from retail – where companies like Workbar have helped retailers offer up portions of their stores – to more niche verticals like parking lots – where companies like Campsyte are transforming empty lots into spaces for outdoor co-working and corporate off-sites. Restaurants and bars might even prove most popular for co-working, with startups like Spacious and KettleSpace turning restaurants that are closed during the day into private co-working space during their off-hours.

Before you know it, a startup will be strapping an Aeron chair to the top of a telephone pole and calling it “WirelessWorking”.

But is there a limit to how far co-working can go? Are all of the storefronts, restaurants and open spaces that line city streets going to be filled with MacBooks, cappuccinos and Moleskine notebooks? That might be too tall a task, even for the movement taking over skyscrapers.

Photo: Vasyl Dolmatov / iStock via Getty Images

So why is everyone trying to turn your favorite neighborhood dinner spot into a part-time WeWork in the first place? Co-working offers a particularly compelling use case for under-utilized space.

First, co-working falls under the same general commercial zoning categories as most independent businesses and very little additional infrastructure – outside of a few extra power outlets and some decent WiFi – is required to turn a space into an effective replacement for the often crowded and distracting coffee shops used by price-sensitive, lean, remote, or nomadic workers that make up a growing portion of the workforce.

Thus, businesses can list their space at little-to-no cost, without having to deal with structural layout changes that are more likely to arise when dealing with pop-up solutions or event rentals.

On the supply side, these co-working networks don’t have to purchase leases or make capital improvements to convert each space, and so they’re able to offer more square footage per member at a much lower rate than traditional co-working spaces. Spacious, for example, charges a monthly membership fee of $99-$129 dollars for access to its network of vetted restaurants, which is cheap compared to a WeWork desk, which can cost anywhere from $300-$800 per month in New York City.

Customers realize more affordable co-working alternatives, while tight-margin businesses facing increasing rents for under-utilized property are able to pool resources into a network and access a completely new revenue stream at very little cost. The value proposition is proving to be seriously convincing in initial cities – Spacious told the New York Times, that so many restaurants were applying to join the network on their own volition that only five percent of total applicants were ultimately getting accepted.

Basically, the business model here checks a lot of the boxes for successful marketplaces: Acquisition and transaction friction is low for both customers and suppliers, with both seeing real value that didn’t exist previously. Unit economics seem strong, and vetting on both sides of the market creates trust and community. Finally, there’s an observable network effect whereby suppliers benefit from higher occupancy as more customers join the network, while customers benefit from added flexibility as more locations join the network.

Photo: Caiaimage / Robert Daly via Getty Images

So is this the way of the future? The strategy is really compelling, with a creative solution that offers tremendous value to businesses and workers in major cities. But concerns around the scalability of demand make it difficult to picture this phenomenon becoming ubiquitous across cities or something that reaches the scale of a WeWork or large conventional co-working player.

All these companies seem to be competing for a similar demographic, not only with one another, but also with coffee shops, free workspaces, and other flexible co-working options like Croissant, which provides members with access to unused desks and offices in traditional co-working spaces. Like Spacious and KettleSpace, the spaces on Croissant own the property leases and are already built for co-working, so Croissant can still offer comparatively attractive rates.

The offer seems most compelling for someone that is able to work without a stable location and without the amenities offered in traditional co-working or office spaces, and is also price sensitive enough where they would trade those benefits for a lower price. Yet at the same time, they can’t be too price sensitive, where they would prefer working out of free – or close to free – coffee shops instead of paying a monthly membership fee to avoid the frictions that can come with them.

And it seems unclear whether the problem or solution is as poignant outside of high-density cities – let alone outside of high-density areas of high-density cities.

Without density, is the competition for space or traffic in coffee shops and free workspaces still high enough where it’s worth paying a membership fee for? Would the desire for a private working environment, or for a working community, be enough to incentivize membership alone? And in less-dense and more-sprawl oriented cities, members could also face the risk of having to travel significant distances if space isn’t available in nearby locations.

While the emerging workforce is trending towards more remote, agile and nomadic workers that can do more with less, it’s less certain how many will actually fit the profile that opts out of both more costly but stable traditional workspaces, as well as potentially frustrating but free alternatives. And if the lack of density does prove to be an issue, how many of those workers will live in hyper-dense areas, especially if they are price-sensitive and can work and live anywhere?

To be clear, I’m not saying the companies won’t see significant growth – in fact, I think they will. But will the trend of monetizing unused space through co-working come to permeate cities everywhere and do so with meaningful occupancy? Maybe not. That said, there is still a sizable and growing demographic that need these solutions and the value proposition is significant in many major urban areas.

The companies are creating real value, creating more efficient use of wasted space, and fixing a supply-demand issue. And the cultural value of even modestly helping independent businesses keep the lights on seems to outweigh the cultural “damage” some may fear in turning them into part-time co-working spaces.

Even this IRL store is an automated, digital experience

Tally is a “shy” robot. 

Unlike the gregarious, extroverted Pepper robot seen roaming in shopping malls and interacting with customers and answering questions, Tally quietly does its thing with the occasional beeping sound. 

The unobtrusive self-driving machine can be spotted at the first U.S. location of the French sporting goods store Decathlon in downtown San Francisco. The lanky machine on wheels is the first fully autonomous inventory robot, meaning it roves aisles and tracks RFID chips on nearly 10,000 products. 

It’s not supposed to really interact with customers – that’s a duty left to the store’s workers. But it’s friendly enough, with a short message on it that says “Hi, I’m Tally!” and digital eyes to give it a human-like appearance as it roams around.

"Hi, I'm Tally."

“Hi, I’m Tally.”

Image: sasha lekach / mashable

It’s something like a Roomba, the robotic vacuum cleaner that you’re supposed to ignore as it works. From Simbe Robotics, Tally uses LiDAR, RealSense 3D sensor tech from Intel, cameras, and computer vision to check inventory and pricing. It can also flag any items in the wrong place. It “sees” obstacles blocking its way and is programmed to move away from crowds of people. 

Tally is in other grocery stores and retail shops and has logged 10,000 miles of inventory checks and constant scanning. The new partnership with the athletic equipment store means more Tallys could appear at more stores as the French company expands into the U.S. Another Bay Area store is opening next year.

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Instead of being relegated to a store room or a massive warehouse, Tally is out in the open, working alongside real, human workers. It doesn’t seem that distracting and the workers seem to appreciate that it’s doing work that they’d have to do (like manually counting items and marking what’s low and needs replenishing).

Even if you physically go to a store, the experience has become even more digital than it used to be. 

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Amazon’s checkout-free experiment could come to larger grocery stores

Larger Amazon Go-powered stores are being tested.
Larger Amazon Go-powered stores are being tested.

Image: Stephen Brashear/Getty Images

Amazon’s cashier-less shopping tech could come to a full supermarket.

As reported by the Wall Street Journal, the tech giant is experimenting with its Amazon Go technology at a larger store.

At the company’s seven Amazon Go stores in Seattle, Chicago, and San Francisco, shoppers scan in with their mobile devices, then pick their product and walk out. 

The technology uses a mix of computer vision, sensor fusion and deep learning to register what you’re buying, then charges your Amazon account when you leave. 

According to sources who spoke to the news outlet, Amazon is testing its technology at a space in Seattle, which has been arranged like a large store. 

Higher ceilings and shelves, and a bigger product range means it could take more time for Amazon to get the technology right, which currently works well for smaller stores. There’s also the issue of how the technology would work with items like fruit and vegetables, which unless pre-packed, need to be weighed to determine price.

While Amazon Go is more of a convenience store, with limited groceries and prepared foods, the intention is to apply the technology to Whole Foods, according to WSJ’s sources. An average Whole Foods has 34,000 items.

Both Amazon and Whole Foods declined to comment on the rumor to the news outlet, but given Amazon purchased the supermarket chain for a whopping $13.7 billion last year, the partnership makes sense.

It’s hardly a surprise that Amazon is looking to spaces with a bigger footprint. In July, Microsoft was reportedly in talks with Walmart and other retailers around the world to implement automated, cashier-less technology.

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Mercaux bags $4.5M to help bricks-and-mortar retail tool up to sell more

Retail tech SaaS platform Mercaux has closed a £3.5 million (~$4.5M) Series A funding round led by European VC fund Nauta Capital. 

The 2013 founded London-based startup sells software for retailers to tap into digital capabilities in their physical retail stores — offering a modular platform that’s intended to support digital transformations at a pace of the retailer’s choosing.

“Historically offline retail was just a sales channel. But with the rise of e-commerce, and ability to communicate with clients digitally at any moment of time, offline stores (and in-store employees) have started to play multiple roles,” says founder and CEO Olga Kotsur.

Physical stores are “not just a sales channel but also an e-commerce window, marketing channel, customer relationship centre” and much more, she argues.

Or, well, they can be — if retailers spend to upgrade legacy IT systems that have not been designed with more expansive digital shopping capabilities in mind.

Mercaux’s platform offers a pick n mix of services intended to empower retailers’ employees to sell more — such as by tapping into up-to-the-minute style suggestions — and thereby “improve and personalise the in-store customer journey”.

On a practical level this translates into real-time access to inventory levels in-store and online at one end; through merchandising content via cross-sell suggestions and styling ideas (powered by crowdsourcing); digital marketing content; all the way up to customer profiles and preferences, pulling on personal data to better inform and steer the in store shopping experience.

At the business end, the platform plugs into retailers’ POS and e-commerce systems to power instant online and checkout sales. On top of that its value-add is assistant tools and analytics for in-store sales people, as well as a channel through which they can communicate with each other and Head Office.

By capturing the usage of the app, the platform also provides retailers with an overview of store analytics — serving up insights on shoppers’ behaviour, most popular products, lost sales and so on.

The SaaS platform can be deployed on a variety of hardware touchpoints, including in-store kiosks.

“Mercaux integrates across all retailers digital touchpoints, making existing data (CRM, Inventory, or Marketing) actionable in-store and enhancing it further,” says Kotsur. “It also follows a ‘lego approach’: modularity in terms of features, flexible configuration and easy integration allow retailers to launch first what they can or need most (for example real-time inventory and recommendations for effective selling), and gradually enhance the platform subject to their new needs (for example customer profiles and preferences for personalised experience).”

The company claims its platform drives an up to a 14% increase in direct store sales — achieved via store conversion and basket size uplift as well as new omni-channel sales.

It also reckons it can quantify its “sales people efficiency” gains — claiming to eke out up to a fifth more productivity from your humans thanks to digital aids like its mobile sales assistant app. (It offers “help” with initial training of salespeople but Kotsur suggests the app is intuitive enough that sales people “normally adopt it in a matter of days”.)

“Conversion increases due to more effective sales people who do not waste time walking away from a customer, can confidently offer alternative if something is not available, or can show all options via catalogue,” she continues. “Basket size increases due to cross-sell and styling suggestions. Omni-channel sales means new online orders directly from stores or e-commerce purchase by a customer after receiving a follow up email post store visit.

“Our most recent UK customer Karen Millen, realised +9% store sales increase in less than 3 months.”

Deployment time for integrating the platform varies depending on the retailer. Kotsur says it can take up to a month to integrate with systems, plus another couple of weeks for retail prep. So it “normally” takes clients between one to two months to go live, although rolling the platform out across all stores can take “between a month and a year” — depending on the number of stores and infrastructure readiness.

Mercaux has more than 15 customers at this stage, across markets including the UK, continental Europe, LatAm and Russia.

Other current customers include the likes of French Connection, United Colors of Benetton, Nike and Under Armour, and it says its platform is being used more than 100,000 times per day in more than 250+ stores around the world. 

Fashion remains the company’s largest segment but Kotsur says the platform can operate in any retail vertical that requires “service selling” (or where sales people are expected to have “at least basic product knowledge”), and is looking to grow usage in other verticals.

“Currently we work with Apparel & Fashion, Sports, Department stores, Cosmetics, and even Alcohol segments,” she says, adding: “We are planning to expand to Home & Furniture as well as Electronics over the next few months.”

The Series A funding will be used to drive growth in existing and new markets, as well as being put into R&D to further develop the platform.

On the competition front, Kotsur names Canada based Tulip Retail and US PredictSpring as also addressing similar challenges around digital transformation but she suggests a modular approach and attention to analytics is helping it stand out.

“Mercaux approach is different as not only our in-store solution is modular and easily configurable, which means faster integration and more flexibility for our clients, but we also provide a powerful tool for Head Office teams that allows them to get in-store analytics, control stores performance and execution, and allows real-time connection between stores and retail management teams.”

Commenting on the funding in a statement, Carles Ferrer, Nauta Capital’s London-based general partner — who now joins Mercaux’s board — added: “We have been fans of Olga and Mercaux over the past years, as they have achieved a fantastic commercial traction by tackling a large industry in need of a transformative digital disruption. Within our broader software approach, we have developed a very strong thesis around the massive transformation the retail industry is currently facing.

“Having led several deals within this space — both in the offline retail tech market and in the online-enabled technology retail vertical — we are building another fundamental block that supports our broader view of the space with Olga and Mercaux’s value proposition.”

Walmart adds an AR scanner to its iOS app for product comparisons

Walmart is giving augmented reality a shot. The retailer today announced the launch of a new AR scanning tool in its iPhone application which will help customers with product comparisons. However, unlike a typical barcode scanner meant only to compare prices on one item at a time, Walmart’s AR scanner can be panned about across store shelves, offering details on pricing and customer ratings beneath the products it sees.

The technology was first developed by a team at an internal Walmart hackathon using Apple’s ARKit technology. At the time, their idea was to create a scanning experience that worked faster and felt faster when used by customers. They also wanted to build a scanner that offered more than just price comparisons.

“Walmart store shoppers love using our mobile app barcode scanner as a price checker. Our team sees the potential of this product as so much more, though,” explains Tim Sears, Senior Engineering Manager at Walmart Labs, in a post announcing the feature’s launch. “When a customer launches the scanner, they get a direct connection between the digital and the physical world that their screen and camera lens creates for them,” he says.

The team won the hackathon, then went on to further redesign the experience to become the one that’s live today in Walmart’s application.

To use the scanner, you launch the feature in the Walmart app then point it at the products on the shelf you want to compare. As you move the phone between one item and the other, the product tile at the bottom of the screen will update with information, including the product name, price, and the star rating across however many reviews it has received on Walmart.com. A link to related products is also available.

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The AR scanner was designed to anchor dots to what you’ve scanned, but uses smaller dots instead of anchoring the entire content to the product itself to overcome the problems that could occur when multiple items are scanned together in a close space.

Despite the supposed advantages of AR scanning over a simpler barcode scan, it still remains to be seen to what extent consumers will adopt the feature now that it’s live.

Walmart isn’t the only retailer to give AR a go. Others have used it in various ways, including Amazon, Target, Wayfair, and many more. But in several cases, AR’s adoption by retailers have been focused on visualizing products in your home, or – in the case of Target’s AR ‘studio,’ makeup on your face.

Walmart’s AR scanner goes after a more practical use.

The AR Scanner is in the latest version of the Walmart iOS app (18.20 and higher), and works on iPhones that run at least iOS 11.3. This latter requirement is due to its use of ARKit 1.5, but will limit the audience largely to those with newer iPhones.