8 companies inventing the future of retail
Eight start-up companies comprising the inaugural class of the newly formed XRC Labs accelerator are looking to have a big impact on the retail industry.
New York-based XRC Labs unveiled the inaugural class of start-up companies participating in its 10-week accelerator program Tuesday evening, Oct. 13 at an event near its headquarters at the Parsons Schools of Design.
The companies (see details below) range from those with unique new consumer products to those offering advanced technology solutions and are reflective of XRC’s three-pronged approach to the world of start-up accelerators.
“We focus exclusively on the largest and toughest market to crack on the planet which is retail and consumer goods,” said XRC Labs director Angelia Muller. “We also take the position that design leads technology which is why we have a close partnership with the Parsons School of Design. The mantra has been mobile first, but we believe a shift has taken place and now design is first. Lastly, we are stage-agnostic. It’s not just about funding, but gaining traction with the toughest, most demanding potential customers.”
In addition to Parsons, XRC Labs was formed in conjunction with Harvard’s i-lab and global management consulting firm Kurt Salmon for the purpose of establishing an ecosystem of entrepreneurs and investors to rapidly design, launch and iterate retail and consumer technologies, products and services, supported by partners and advisors in the retail and consumer goods industry.
The inaugural group of companies at XCR Labs, an acronym of sorts for “accelerating retail and consumer goods innovation,” will undergo a 10-week development and mentorship program that culminates with “demo day” on January 11, 2016. Demo day is when the eight companies are given five minutes to pitch their product or solution to angel investors, venture capitalists, retailers and other sponsor companies.
As an accelerator, unlike an incubator, XRC Labs already has some skin in the game. Both models help companies grow by offering services, tools and amenities. However, as Muller explained, accelerators, unlike incubators, are considered early stage investors. For example, XRC Labs provides participating companies $50,000 in exchange for a 5% to 6% equity stake.
“Accelerators, unlike incubators, usually have a structured program with a tight timeline that leads up to demo day and the presentation to investors,” Muller said. “What makes XRC Labs different from other accelerators is that we are the first that truly integrates both extremes of the retail and consumer goods worlds: truly innovative product-focused startups and heavily technological software designed to improve the future of the industry, both internally and externally.
Between now and the Jan. 11 demo day in New York, Chain Store Age's sister publication Retailing Today will feature each of the companies participating in the inaugural class. Until then, here’s a brief look at the companies, their founders and the product/solution they are bringing to market:
Eastern Kingdom is a luxury athletic handbag brand based in New York and founded in December 2014 by Carmen Chen Wu. CEO Aaron Luo leads the company as CEO and is focused on designing products for customers with an active lifestyle, a taste for luxury designs and appreciation for style that blends the lines between fashion and fitness.
FINDMINE is a machine learning and e-commerce technology company that employs Saas technology to automate and personalize merchandising for retailers and shoppers. Founded by Michelle Bacharach in July 2014, the company is focused on bringing innovation to the manual process of curating window displays, endcaps, and online lookbooks.
Forrge is an on demand workforce solution founded in February 2014 by Stacey Ferreira to serves retailers needs for qualified workers.
Gleem & Co. is an online luxury marketplace and consignment jeweler focused on making it easy for owners of high-end jewelry to sell their possessions. The company was founded in May 2014 by Nikki Lawrence.
Natalia Inc. is a technology inspired apparel company that blends 3D printing, supply chain and fashion to create seamless and sustainable clothes designed for modern women. The company was founded by Natalia Allen in May 2013.
Okmyoutfit is an on demand personal shopping and styling service. The company was founded in November 2013 by Diana Melencio.
R.F.M. is focused on personalization, customization and data science to offer timeless apparel and a new paradigm of fit. The company was founded in December 2014 by Kevin Flammia.
Urbacraft is a toy and consumer products company. Founded by Ayssar Arida, the company provides a digital and physical platform for mass customizable construction toys that allow anyone to imagine, manufacture, and sell their own designs.
Whole Foods plans to be faster and more efficient
Whole Foods is creating a new collection of business applications with a key technology partner that are said to be unlike anything on the market.
That’s a bold claim and to back it up the nation’s leading organic and natural grocery chain is partnering with cloud-based business application provider Infor to develop a new enterprise platform called Infor Cloudsuite Retail.
Infor Cloudsuite Retail will offer a combination of cloud-based automation and advanced, efficient processes for a range of strategic merchandising and supply chain management functions. Whole Foods Market expects the new platform's advanced analytics to provide insights that will drive business performance and operational efficiencies.
The new platform's advanced IT infrastructure is also expected to deliver more in-depth information and an enhanced shopping experiences for in-store and digital Whole Foods Market customers.
"The new retail platform we will co-create with Infor will be unlike anything currently on the market, better leveraging major technology advances to deliver much more value at lower cost," said Jason Buechel, executive VP and CIO of Whole Foods Market. "With Infor, Whole Foods Market has found a partner ideally suited to help us co-create a new retail platform that enables a more efficient, connected enterprise with greater visibility, flexibility, insight, and ease-of-use for our team members — all while delivering a better end-to-end shopping experience for our customers.”
Through the partnership, Whole Foods Market will become a working lab for Infor development engineers and designers from Hook & Loop, Infor's Manhattan-based internal design agency. Infor teams will work alongside Whole Foods Market team members to identify critical process improvements and develop a purpose-built software suite.
Whole Foods is not releasing a lot of details about the specifics of Infor Cloudsuite Retail, or when it may be implemented internally or become available on the market. Forbes reports the platform will eventually be able to capture hundreds or even thousands of product attributes, potentially including factors such as water used in creating a product. Clearly, Whole Foods wants to participate in the cloud-based retail enterprise space currently dominated by software giants such as Oracle, SAP, Microsoft and JDA.
Amazon.com has long provided a variety of cloud-based enterprise solutions for other companies, and a number of smaller retailers such as In The Pink also serve as IT vendors. However, it is not common for a major chain with large physical presence such as Whole Foods to enter the technology provider marketplace.
Whole Foods has been testing other partnerships that expand its business model, such as the opening of Mendocino Farms outlets in select store locations and a home delivery deal with Instacart. The new Infor deal takes the idea of extending your core business a major step forward.
ICSC predicts a long and strong holiday shopping season
More Americans are planning holiday-related purchases this year than in 2014, and those who plan to shop will spend more over a longer period of time.
That’s according to the International Council of Shopping Centers 2015 Consumer Forecast, which shows that 90% of Americans are planning holiday purchases this season, up from 82% last year. And overall, 80% of shoppers plan to spend the same or more this holiday season than they did in 2014.
The ICSC outlook is based on consumer intentions, in contrast to NRF’s forecast and Deloitte’s projection, both of which called for lower holiday sales than last year.
ICSC is forecasting overall year-over-year growth of 3.3% in retail sales this holiday season (Nov.-Dec.). That pace would be significantly ahead of the average 10-year holiday sales growth of 1.8% and slightly ahead of the current yearly pace of 2.8%.
Notable growth categories include:
• Furniture and home furnishing stores (4.9%)
• Clothing and clothing access stores (3.3%)
• Health and personal care stores (3.3%)
• Electronics and appliance stores (1.1%)
The ICSC survey shows that holiday shoppers will spend an average of $702 this season – up from $677 in 2014 – allocated as follows:
• $575 on holiday gifts
• $127 on all other holiday-related items, such as decorations, greeting cards, etc.
On average, the highest income group polled ($100k+) will spend $1,062, and those with incomes less than $35k will spend an average of $500.
The top five categories in which Americans are planning to spend this holiday season are:
• Traditional gift cards (54%)
• Electronics/devices (51%)
• Apparel and footwear (49%)
• Toys and games, not including apps or video games (42%)
• Food such as chocolates, popcorn and food baskets and beverages/alcohol (34%)
According to ICSC, Americans are starting their holiday shopping earlier and the stragglers are pushing later. This year, two thirds (66%) of Americans will start shopping before Thanksgiving Day. Only 7% expect to be done by Thanksgiving, however; 65 % are planning to have their holiday shopping complete by Dec. 15.
Many Americans are looking to do their holiday shopping on actual holidays: 12% plan to make purchases on Thanksgiving Day, and 8% plan to shop on Christmas Eve. And the year’s biggest retail holiday – Black Friday – will continue to be a big draw: 41% of holiday shoppers plan to take advantage of sales on that day.
The survey showed that about 95% of holiday shoppers intend to make a purchase in a physical store this year. Their top reasons for doing so include:
• They like the ability to physically see, touch or try on the merchandise (46%)
• They don’t want to pay for shipping (36%)
• The sales they want are only offered in store (30%)
• They find it easier to return or exchange items at a store (28%)
• They enjoy the convenience of one-stop shopping (27%)
“With gas prices and unemployment down, and housing prices up, holiday shoppers are heading into the season with increased confidence in their spending power,” said Jesse Tron, ICSC spokesman. “While certain headwinds exist, such as uncertainty in global financial markets and minimal wage growth in the U.S., the positive macroeconomic trends are likely to win out and propel retail sales throughout the holiday season. As a result, it appears to be shaping up as a solid season for retailers, and if ICSC’s forecast holds, one that would better the average of the previous 10 seasons by 1.5 percentage points.”