All posts in “retail”

Reach Robotics closes $7.5M Series A for its augmented reality bots

After years of research and development, Reach Robotics has closed a $7.5 million Series A, co-led by Korea Investment Partners (KiP) and IGlobe, to bring its augmented reality bots to market in a big way. The Bristol-based startup is looking to expand into the U.S., and the team is exploring opportunities for growth into other European and Asian markets.

Reach Robotics’ first product, MekaMon, launched last fall. Today’s round comes after the company produced and sold an initial run of 500 of its four-legged, crab-like, bots. MekaMon fits into an emerging category of smartphone-enabled augmented reality toys like Anki.

Silas Adekunle, CEO of Reach Robotics, tells me the influx of capital will be used to make some strategic hires and increase brand recognition through marketing. This is the first time the startup has announced a funding round. Adekunle tells me his experience raising capital wasn’t easy; as they say, hardware is hard.

“It was hard to pitch in our early days because people didn’t believe,” explained Adekunle.

MekaMon sits somewhere between toy and full-fledged robot. Unlike the radio-controlled RadioShack robots of yesteryear, MekaMon costs a hefty $329. At first glance this can be hard to swallow, but Adekunle remains adamant that he is building a platform and not a line of toys — think PS4 instead of an expensive, single-use robot collecting dust on a shelf.

Outside of retail sales, another avenue for the company to make money is through partnerships within the entertainment industry. Adekunle says that Reach would never go out of its way to deliver a specific product for a client, but he always keeps an eye out for overlap where a partnership could occur with minimal operational changes.

“People are taken aback that something could be this realistic,” asserts Adekunle. “If you strip back the product and lose that, then you don’t have an innovative company.”

Because Reach is selling software-enabled hardware, it has the opportunity to collect all sorts of interesting data that it can use to fine-tune its products. The startup is able to track retention in aggregate and look at how people actually use their robots. Moreover, if MekaMon suffers leg failure, Reach can analyze indicators like temperature readings and torque.

Adekunle insists on keeping the Reach Robotics team interdisciplinary — one employee helped shape the way robots move in the Transformers movie series. This same team is focused on empowering the next group of developers who will build on the MekaMon platform and create new use cases, beyond the company’s initial vision for the product.

Online thrift store ThredUP is opening physical retail locations

ThredUP, the online secondhand clothing store that has raised over $130M in funding is going old school.

The startup has announced they will be opening at least five brick and mortar retail stores by the end of the year, with the first one soft-opening today in San Marcos, Texas.

Why San Marcos, a small town of ~60,000 located somewhere between the cities of San Antonio and Austin? Because that’s where the shoppers are, of course.

The thesis behind ThredUP’s new foray into physical retail stores is that the startup has a ton of customer data that it can use to improve the old-school shopping experience. And, what’s a better data point when deciding where to open a store than the locations of your existing customer? ThredUP is opening stores in the cities where it has a particularly high density of existing customers – with one of those places being San Marcos.

And this is just one way that the startup plans to use data to beat other old-school retailers. They are also going to be able to basically guarantee that their customers like the styles they are putting in stores – because they’ll only stock stores with styles that customers in the area have been recently purchasing and looking at online.

Essentially they are removing all of the merchandising risk that other brick and mortar retail stores are faced with, which the startup says will give them a much better chance at succeeding in the physical world.

Another cool feature – if you find an item you like in stores that isn’t in your size, you can use an iPad provided by the startup to take a photo of the item, and you’ll be shown similar items in your size from across the startup’s entire online inventory, which now is growing by about 1,000 items every hour.

ThredUP says 50% of their online customers have never shopped secondhand before – which is a big reason they wanted to open a physical space. While the startup has grown tremendously, on track to sell 10 million items this year alone, in order to continue to grow their core online business they need to expand to new users who may shy away from thrift stores, by showing them that there is a safe side to secondhand goods.

Columbus could be the next startup city

Ever since I wrote about the Midwest last year I’ve been keeping my eyes on Columbus. I decided to hold a small pitch-off to meet some of the startups I saw last time I had driven through. The pitch-off was a success and a company called Wyzzer took first place and the quirky Hopper Carts came in second. But what I really came away with was a new respect for Columbus as a startup hub.

You see, I grew up in Columbus and I wanted to see how much it’s changed.

And it has changed. A lot.

On the aggregate a city like Columbus is the model for the future. There is manufacturing, farming, retail, brewing, and ecommerce all in a few square miles. The people are ready to expand and learn and there are plenty of smart folks who are willing to leave high-priced real estate in New York and San Francisco to get a house with a back yard down the street from a beer garden in one of the city’s urban enclaves. I asked around and heard that things are getting even better. Here are a few points I discovered during my visit.

All eyes are on Columbus. And they can’t fail. The city just received a $277 million Smart City grant from the federal government to build out tools and techniques that will define the city of the future. So far it looks like the Mayor Andy Ginther and the city government is dragging its feet but there is hope. While other cities – most notably Pittsburgh – vied for the grant, Columbus got it on the power of private industry and public infrastructure. And now it has four years to deliver. I’ve met a few small startups who are trying to work with the Smart City task force to build out the initiative but there’s little promising thus far.

That said, it’s great Columbus got the nod. There is a lot of promise here as long as government gets into gear and starts working with local entrepreneurs and, most important, this grant can help a thousand startups blossom. It’s a win-win for the government and the city. It just can’t be squandered.

Further, the quality of life is about to hipsterize. In comparison to cosmopolitan Chicago and small, cool towns like Raleigh, Columbus is still a mixture of malls and suburbs. That’s swiftly changing. I lived in Columbus until college and I saw the rough and ready bars of the Campus and Short North District slowly wink out one by one. Then, when I began returning in the 2000s, I saw entire swathes of urban business turn into a sterile sprawl. In short, between 1993 and 2008 or so Columbus got boring.

That’s swiftly changing. The Short North District is a booming pleasure dome dedicated to deep fried pickles and great drinks. Upstarts like Hot Chicken Takeover and carts like PutItInYourFace are replacing the T.G.I. Fridays and Applebees. Microbrews have rousted Coors and Bud. Columbus, like so many other cities, has become comfortable, artisanal, and pleasant. But, because that process is just beginning, there’s still time to get in on the ground floor. There is plenty of room to grow. While many of the rich suburbs are hopeless as magnets for art and commerce the are still places in the city that have plenty of promise. As I wrote last week the city has plenty of rotting malls it can easily turn into unique shopping and eating experiences.

One con? The Columbus ecosystem is small. Columbus has a population of 835,957 with a regular influx of students that leaves over the summer. It’s long been known as a collector of corporate offices – Chase is here as is Nationwide and the Limited. It has never been an “entrepreneurial town” per se and instead depending on the steady flow of students from the halls of OSU to the cubicles of the corporates. That’s changing.

The ecosystem, however, is as nascent as other similarly-sized cities. A few things have been tried but few of the accelerators are able to keep successful entrepreneurs rooted to the city, an important aspect of ecosystem building. I’d like to see more of that over time and I’m sure that slowly but surely we can see some folks settling down to enjoy some Jenni’s and Donato’s with the natives.

Columbus startups need seed badly. There are a few VCs in the area – Rev1, Drive, and Loud Capital are names you hear often – but like most smaller markets the drive to fund smaller startups in negligible. Loud, a startup itself, is the closest to an on-the-ground seed group while Drive is looking for comfortable later stage investments. Accelerators like Fintech71 see the value of seed in specific markets but they’re finding deal-flow difficult. Therefore both investors and startups in the city are usually stuck – a situation is extremely common in cities like Columbus.

Target and Cartwheel apps to merge starting this summer, mobile payments and improved maps to follow

Target’s mobile app strategy will undergo a significant change, starting this summer. The retailer announced this week it will soon combine the functionality of its Cartwheel savings app with its main shopping app, in preparation for an eventual Cartwheel shutdown. The Target app will also receive a notable upgrade this year, adding support for an indoor map that shows your location in the store, along with the nearby Cartwheel deals, in addition to support for mobile payments.

According to Target, the decision to merge its apps into one is a result of customer feedback. Shoppers wanted an easier way to access all of what Target has to offer from one destination, not two.

Target isn’t the only retailer to streamline its mobile app strategy. A couple of years ago, Ebay shut down its wider suite of apps (Fashion, Motors, and Valet), to return their functionality to Ebay’s main app, for example. Meanwhile, other retailers like Walmart, Kohl’s, and CVS – all of which have their own mobile payments service – offer their payments and savings features within their main shopping app, not in a separate one.

The retailer had announced its plans to launch a mobile payments service earlier this year, but had not revealed when that would be beyond sometime “this year.” That’s still the ETA for the mobile payments portion of this transition – and, in fact, it could be pushed back to January, if the team needs the time.

We also already knew that Target’s initial entry into this space would be focused on supporting its Target REDcard holders, rather than a broader strategy that would allow for other forms of payment.

The REDcard is Target’s own credit card, offering shoppers 5 percent off of all their purchases. The company declined to say how many cardholders it has, but noted they accounted for 24 percent of last year’s sales.

With Cartwheel, consumers today add deals to an in-app shopping list, then show their barcode at checkout to save on the items they’ve purchased that match the available discounts. Following Cartwheel’s integration with the main Target app, this process will continue – except that, with support for mobile payments, shoppers will be able to both save and pay by having that barcode scanned just once.

The transition to the main Target app has already begun.

Customers can now access their Cartwheel deals in the main app, even though the standalone version of Cartwheel has not been shut down. We understand that Target has no immediate plans to close Cartwheel, instead favoring a slower transition for this app, which is the more popular of the two.

Cartwheel has been downloaded around 40 million times, and its users have saved around a billion dollars via its deals. That’s up from the $600 million reported last year.

However, Target says it will soon begin alerting Cartwheel users to make the switch to the Target app through notifications.

Following the transition of Cartwheel to Target, the main app will be updated with other features, including mobile payments and the in-app map.

Beacons in Target’s new LED Lights 

This map will now show a user’s location in the store as a blue dot, and it will display which Cartwheel deals are nearby.

This addresses one of the disconnects between using the Cartwheel app today, and actually shopping the store shelves. You can only see that you’ve added deals to your list, but it doesn’t show their exact location. The deals aren’t even organized in your list by type or aisle number, meaning you have to have a pretty good memory of what you wanted while actually placing items in your cart at the store.

Though Target’s main app has offered a store map and aisle finder functionality for years, the ability for it to track your location and show you deals – which will begin rolling out this summer – are new. We understand that location-tracking will be enabled through the use bluetooth beacons.

Beacons, which use bluetooth for positioning, are how the Target app will be able to provide a GPS-like experience for its app’s indoor map. That’s something Target began testing a couple of years ago, in partnership with beacon provider Estimote.

That test wrapped up some time ago, we understand. Instead, Target is updating all stores with new, energy-efficient LED lighting, and will be installing fixtures that have beacons built in. The company isn’t disclosing the name of its vendor partners, but may be working with more than one on this effort. The plan is to have several hundred stores updated with the beacon-enabled LED lights this summer, and the full chain by the holidays.

Presumably, once Target’s main app becomes the de facto location for shopping in-store, online, finding deals, and making payments, it could then be updated to include other newer features, if Target chose. One of those potentially could be support for its next-day home delivery service, Target Restock, which will also launch a pilot test this summer.