There’s a US start-up that actually thinks it can revive brick-and-mortar retail — here’s how

By Deborah Findling

Amid the carnage in brick-and-mortar retail and a juggernaut called Amazon that’s humbling its competition online, one technology start-up has come up with a motto: “Retail isn’t dead, it needs a revival.”

Enter software-powered retailer b8ta, which sells tech products that don’t have an offline retail footprint of their own. b8ta gives a leg up to small technology makers who might not be able to break into big stores, and lets customers test gadgets like smart locks, high-tech skateboards, and connected stove monitors in physical locations.

In the process, b8ta hopes to generate excitement about shopping in traditional retail stores again, and giving unknown brands more exposure.

b8ta was founded in 2015 by Nest alums Vighu Norby, William Mintun and Phillip Raub, and has outlets in San Francisco, Santa Monica, Seattle, and Austin, among others. Since launching in December 2015, the company has opened 11 overall locations around the US.

According to Norby, b8ta’s CEO and founder, the company is trying to alleviate a modern conundrum: Ordering a product and having to pony up the money immediately, without knowing if it does what it claims.

“It’s a really bad experience as a consumer to put down money first,” Norby told CNBC recently. “Sometimes the product takes 18 months to get to market, or never ships,” he said.

While working for Nest, Norby experienced first hand what it was like to work with large retailers. The CEO said that “retail is hurting right now” with many of the best products being launched and sold only online.

In many cases, getting shelf space at all has become difficult and costly. Often, consumers don’t see similar products from smaller (and often cheaper) brands, because the more dominant labels take over much of the displays.

And with many new technology products launching online, customers often purchase a product months before it comes to market — but have no way of knowing if they’ll even like it.

According to Phillip Raub, b8ta’s co-Founder and CMO, the company wants to shift the dynamic. “You can’t change the business model overnight, [but] when you change the model though, it changes behavior.”

Lowe’s b8ta “SmartSpot” lets consumers get a taste of b8ta stores within Lowe’s. Meanwhile, large retailers can dip their toes in the water by partnering with the start-up.

The store lets any company apply and rent space in their retail locations, but they must be ready to ship with functioning products, and not just prototypes.

It’s an important distinction, given that b8ta said 18 per cent of the roughly 400 brands they’ve featured have gone under in the past two years — part of the challenge of introducing new consumer technology into an ever-changing market.

The displays are all software driven, and companies can control the content and price themselves. B8ta lets the retailers keep 100 per cent of their sales, something that is unique in the retail space. The store sees around 1 million hands-on demos across their locations a month.

Consumers are able to test a gadget before committing to buying it, and make returns in person.

Companies like electric skateboard maker Boosted see the benefits right away, as consumers test products in store and make purchasing decisions on the spot. Recently, Boosted skateboards saw 50 per cent of all consumers who tried their product buy it immediately.

The “try before you buy” motif is virtually unheard of with other tech giants that charge hundreds or even thousands for their gadgets (a la Facebook’s US$1500 Oculus or Apple’s pricey new iPhone X). Accordingly, the ability to see it in person can make a big difference in both sales and customer satisfaction.

Read the original article at CNBC