January 29, 2017
More consumers are getting used to purchasing their items online, through voice activation or on their smartphone. But there are more solutions that need to happen in retail and startups are starting to respond.
After walking the floors of CES and other events, talking with our corporate partners, and meetings with hundreds of startups, here are some trends I’m seeing for 2017 for retail technology for startups.
Serious Supply Chain Investment
Target recently announced it will be spending $2.5B on their supply chain in the coming years. Amazon spends $13B annually on R&D and Alibaba is plans to spend $16B on supply chain improvements. These numbers are massive and scream opportunity for supply chain focused startups.
Voice-enabled Purchasing Will Become Less Weird
Amazon Echo and Google Home were both breakout products in 2016. While at first this voice-based interface seemed weird, consumers quickly saw the benefits of a voice-based operating system. Today, these devices are mostly used to control your home or play music. The holy grail for retailers is turning these devices into commerce platforms. Startups who help existing retailers or e-commerce companies integrate with these emerging platforms.
Integration of AI Into Everything Retail
Artificial Intelligence is the new Mobile for Retail. While most retailers have a mobile strategy, they now must contemplate their A.I. strategy. A.I. will quickly work its way into almost every facet of retail. I expect to see record levels of investment into A.I startups for retailers. This is both for backend of the retail machine or consumer facing products that help inform consumers to improve conversions.
Store as a Distribution Center
Brick & mortar stores are uniquely positioned to fulfill same-day orders online. However, this can be supply chain/logistics/delivery nightmare and most retailers are not ready. This incredibly complex, highly technical problem is ripe for startups to solve.
Groceries With Membership & Delivery Will Become the Next Hot Area
Consumers buy only two percent of their groceries online. The grocery industry is $700B. Think about that for a second. How many times a week do you visit a grocery store and buy the same items? I bet it is many more times than you research and buy a flat-screen TV. My point is, this is a prime area for disruption. I suspect consumer adoption of online grocery purchasing and delivery will grow.
Retailer Startup Investment and Acquisitions Will Heat Up
Traditional retailers investment and acquisition activity lags behind other markets. Their are some notable exceptions (see Inspectorio and Jet.com), but I believe this will change in 2017 as more retailers look to the startup market for outsourced R&D.
This article is courtesy of Techstars, the best global ecosystem for entrepreneurs to bring new technologies to market. From inspiration to IPO, Techstars empowers the world’s most promising entrepreneurs throughout their lifelong journey by providing a global ecosystem made up of tens of thousands of community leaders, founders, mentors, investors, and corporate partners.
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