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Tech-Savvy Shoppers Drive the Internet of Things in Real Time

Tech-Savvy Shoppers Drive the Internet of Things in Real Time
Design

An online-offline hybrid puts tech-savvy shoppers on the cutting edge

Macala Wright
  • 11 january 2016

The biggest challenge retailers face is consumer adoption of automated and connected technologies—a dilemma we continue to see with wearable tech. So how do companies and makers drive consumer adoption of connected devices? Enter a new retail concept from as b8ta.

b8ta is a new brick-and-mortar store in Palo Alto, California that wants to redefine the way consumers traditionally learn about electronics through the use of discovery. It’s a small store, located around the corner from Apple with open tables and spacious design, full of the latest advancements in technology. The store stocks and showcases the latest gadgets within days of their release; each sitting next to an iPad showing real-time pricing across multiple online sites versus their in-store cost.

b8ta’s Retail Sales Model

What make this groundbreaking is its business model. Leveraging the consumer showrooming trend to its advantage, the store mimics the online purchasing qualities of the Internet—there isn’t just one price, but rather the option to sort through whichever e-commerce outlet they wish to purchase from. They currently have 60 products on display, of which a third of those on display are sold only there and online.

Currently they are the exclusive home to the following products: Gi Flybike, The Prynt Case, Thync Calm and Energy Wearable, Teforia Tea Maker, Avegant Glyph, nurby: Smart Air Quality Monitor, Footbot Indoor Air Quality Monitor, Oura Ring, Anymote Home, Plastc Card, Nuimo Controller, sevenhugs, Caruma Car Camera, Skylock, Hexo+with 3DGimbal, and the Lily Flying Camera.

How It Chooses What To Carry

When it comes to the tech it carries, b8ta is looking for best-of-breed products, CEO Vibhu Norby shared:

“Since every product is out of box at b8ta, the winners (and those we primarily look for) are those which have the best demo or an obvious use case that can be understood within the first minute or two of customer interaction.”

In order to test products, gauging their success in any arena, is all up the shopper. All of their products can be picked up and played with. They’re not locked down to the store fixtures or packaged and shelved.

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Most products come with a mobile app, and “b8ta testers have all the apps and are ready to provide demos, which is a real differentiator from online retail,” said Norby. b8ta’s end goal is that anybody that’s making something interesting should be able to get space here and test a product to see if they should invest more time and money to bring it to market, a great alternative to traditional product launch methods.

b8ta claims they have considerable interest from device makers eager to get their products out there.

How It Works With Makers

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b8ta lets companies apply to rent retail space to circumvent expensive product launches. Product creators can then release a new product at the store within days.They also get instant feedback on sales performance and how many people stopped by their display via b8ta software. To empower the maker, product creators can set their own in-store price and can change it instantly, leveraging numerous sales tactics in order to maximize sell through of an item or items.

How b8ta Makes Money

To make money, B8ta takes a small cut of each in-store sale, agnostic of the purchase medium. It also makes a base fee from the maker. “Our business model isn’t predicated on buying inventory and reselling it at a higher cost. The monthly subscription for space in the store is paired with our software, analytics, and access to our b8ta testers for hands-on training, said Norby. “The subscription fee varies based on how much space you’d like to display your product. For most companies, it’s very affordable, even for a high-rent location like Palo Alto. Most of any revenue from sales is directly passed through to our partners.”

We asked how new makers typically distribute online in order to make additional revenue from other channels and asked if they promoted it, Norby shared:

“Most of our partners have never been in physical retail due to high cost and inventory requirements. In order to sell, they’ve relied simply upon online channels, which is useful, but doesn’t allow potential customers to try before they buy. Physical retail is ideal for hardware products and other connected devices that truly come to life when experienced out of the box.”

Lesson In Brick and Mortar Innovation

While we continually profile retail trends and innovation, I still see few retailers proactively developing plans to win these lost sales back aside from opening up online stores of their own. Many do not explore alternative distribution channels such as Amazon, eBay or different distribution models. E-commerce is challenging, but there needs to a proactive attempt to position a brand or a multi-vendor store for success, especially with big-box incumbents itching to cash in on emerging tech. According to Norby, success in e-commerce can be found in embracing people’s technology driven shopping habits. He shares:

“Mainly because people like shopping online. A lot. Physical retail can’t beat the convenience of online. However, online retail can’t beat the experience of the physical space. The retail industry as a whole has this existential question to answer: Why are we here?

In the past, retail was all about assortment and inventory. Who has the most products in the most optimal locations?

However, you can no longer compete with the Internet on assortment and location. The Internet has all the products, and the location is the chair you’re sitting in right now. You can’t beat that. At b8ta, the one advantage retail has going for it is that you get access to all of a human’s senses, not just their eyes. You can touch, hear, smell, and really get a feel for a product.”

How b8ta Will Use IoT to Drive Consumer Adoption

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When asked how b8ta was approaching consumer adoption of connected devices and products, as this has been the largest challenge of tech and electronics products to date, Norby feels that adoption of the IoT is inevitable. Norby feels consumer desire for innovative products is booming, and there’s never been a better time to be a maker, saying:

“Our store is powered by software, which means that makers directly control the information and pricing that they surface to customers, as well as how our staff is trained. If a product isn’t doing well, they have the data to understand why and the tools to fix it. We don’t see it as our job to get customers to adopt products that they’re not ready for or aren’t interested in adopting.”

Technology and Retail Continue to Disconnect

From a technology standpoint, b8ta is on par. From using in-store behavior to predict and model product viability, to ways to improve a product’s chances of success to figuring out ways to build in-store models based on hybrid consumer shopping habits, these guys have it.

But from a retail standpoint, I feel they may be operating in a vacuum. Norby’ statement of how it’s not their job to help make that adoption smooth, ultimately implies that technology will force consumers to adopt. Any savvy retail marketer from the old and new school knows that approach doesn’t work. Customers are fickle and they aren’t wooed by experiences if they don’t feel something is their idea, sees how it benefits the person they want the world to believe they are and more; the outcome is often failed sales.

It will also be interesting to see proof of this concept success outside major tech-savvy metropolitan areas like New York City, San Francisco and Seattle. Even in Denver or Los Angeles, b8ta could struggle as consumer lifestyles just aren’t as connected as those in tech-dominated markets. While it’s great to prove proof of concept with digital adept shoppers, their opinions and shopping patterns are not going to be reflective of the masses.

In terms of brick and mortar, I think b8ta could have applied some successful tactics that Internet-first retailers Of A Kind, Bonobos or Ahalife had when they translated to physical store locations in order to generate wider consumer interest. But on the flipside, I definitely feel Amazon and other tech-first online sites could learn a thing or two from these guys in terms of design, product selection and better bridging online-to-offline shopping experiences.

It’s very clear, in this analyst’s point of view, that retail and technology continue to disconnect; while they are making strides to come closer together, the “tech and data rule decisions” and “retail is about emotional experience” camps have yet to perfectly match.

b8ta

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