The death of brick and mortar retail has been predicted for what feels like decades. With the rise of Amazon and e-commerce, as well as the collapse of major retailers like Sears, the fall of brick and mortar has seemed like it was just around the corner. As it turns out, brick and mortar is far from dead. It’s ushering in a new frontier in tech.
Retail tech—the companies developing new products that enhance retail shopping—is a booming industry. In the last week alone, we've seen Trax, a Singapore-based retail tech company, become Singapore's second unicorn ever, while Standard Cognition, a young retail tech startup, raised another $35 million at a valuation of $535 million.
The ways companies are changing the retail experience vary wildly:
Standard Cognition, and its competitors Zippin and Amazon Go, offer a “cashierless checkout experience” where customers can take products off the shelves and walk directly out the door. Computer vision combined with digital payments make sure the right customers are charged for the right goods.
Trax represents a type of company that's more focused on the retailers than the customers. Trax offers advanced retail analytics, using robotics and computer vision to track products on store shelves and collect advanced data. The company has already closed deals with giants like Nestle and Heineken.
Companies like Spacee are changing the way customers interact with stores. Spacee, for instance, creates “device-less” AR experiences, like turning a tabletop or windowpane into a touchscreen that customers can shop from. ModiFace, acquired by L’Oreal in 2018, does something similar, building a mirror that allows customers to try on makeup without actually applying any.
As impactful as e-commerce has been, it still represents less than 15% of U.S. retail sales. While e-commerce dominates certain sectors—just ask Borders or Barnes & Noble—it has effectively failed to penetrate other markets, like groceries. This isn’t to say e-commerce isn’t a force. It is undoubtedly transforming retail and commerce more broadly. Brick and mortar, however, isn’t going anywhere soon, and retail tech companies are leveraging this popularity to build new, transformative products.