“We came to retail from the brand side, we felt that when people say ‘retail is dead,’ they’re talking about wholesale, multibrand department stores. We discussed how can you change multibrand physical retail that works for direct-to-consumer companies,” said Norby. “We reengineered the business model for retail, we reconstructed the interface that brands use to interact with storefront and consumers, and we’ve added a lot of insight and data.”
B8ta offers brands leased retail options, conducted through software that allows participating brands to address pricing in real-time, update product development, and collect pertinent shopper analytics — all of the sales profits go directly to the brands. “The only way we make money is by renting the displays out,” Norby explained.
The approach is working. During the discussion Norby revealed that in Oct. 28, B8ta is entering Macy’s in Manhattan’s Herald Square — its foray into East Coast territory. Since its inception in 2015, B8ta’s footprint has grown to include 79 locations in Palo Alto, Austin, San Francisco, Seattle and now New York, among others.
Though B8ta is mostly focused on electronics companies, Norby and Agratchev suggested that consumers’ need to touch, feel and test a product before purchasing will continue to buoy the need for brands to present products in real life. “If you have a model where you leverage your store as a way to introduce product to customers and you can monetize that, the profitability is consistent throughout the store,” said Agratchev.
Under this new model, unlikely partnerships can emerge. “We’re bringing some of the best electronics companies into Macy’s for the first time, like Google,” Norby said. “I think traditionally these companies wouldn’t want to be in Macy’s because they commonly said they don’t want products to be discounted. You control the price and can discount the product, as you like. That’s hard to do for a multibrand retailer.”
But will Macy’s and its competitors be around to act as future venues? “If I wanted to get to the root cause of why wholesale retail won’t exist in 50 years it’s because of price,” Norby predicted. “Brands want to take control of their price: you have retail marketplaces like Alibaba that are threatening your full-value price.”
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