Forge Retail Pulse: A sneak peek into headless commerce, autonomous checkout, sustainability and demand forecasting
We are so grateful to the quickly growing Forge community for all your enthusiasm. This group is already nearing 1,000 corporate innovators globally, with more joining daily. Please do continue sharing with your colleagues and teams. This edition covers headless commerce, autonomous checkout, and sustainability, plus a spotlight on demand forecasting.
Startup Deals
Autonomous checkout - Adoption of autonomous checkout has been relatively slow despite the technology being around for years. The pandemic has helped bolster the case for automated checkout as retailers search to create a better customer experience, reduce human-to-human contact, and cut costs. Meet Standard Cognition, leading the pack in autonomous checkout with a $150M Series C led by SoftBank—the single largest investment for an autonomous checkout company. Standard offers a package of cameras and software that tracks browsing shoppers and automatically charges them when they exit. What sets it apart from others in this space is its use of off-the-shelf cameras that do not require shelf sensors. Standard has signed Circle K as a customer and aims to have its technology in at least 100 stores by year-end.
Headless commerce - Currently, most e-commerce platform options are monolithic (meaning the entire system is constructed on a single platform), resulting in lack of customization, difficulty to A/B test without code, and expensive deployment. Enter Fabric, a headless commerce platform that allows brands to build online stores in modules (use cases include PIM, CMS, loyalty programs, and offers), utilizing drag-and-drop capabilities to create richer customer experiences without the need for a large development team. Fabric's platform enables capabilities like one- or same-day shipping by decoupling the logistics stack, allowing more modern logistics processes without a full code revamp. Fabric raised a $43M Series A led by Norwest Venture Partners, with customers like GNC and abc Carpet & Home using it to power their e-commerce platforms.
Warehouse automation - As we covered in our last edition, retailers are increasing the urgency to adopt automation as they struggle to keep up with surging customer demand and rising labor costs. Many are looking to leverage robotics to enhance fulfillment processes and automate manual tasks. These are the issues that startup Locus Robotics, on the heels of a $150M Series E led by Tiger Global Management, aims to solve. Locus's warehouse robots collaborate with humans to increase fulfillment volumes, boost productivity, track metrics, and report insights to grow operations. Locus is notable for its modular and flexible solution; its robots can be reconfigured with totes, boxes, bins, containers, or peripherals like barcode scanners, label printers, and sensors. Locus's system takes four weeks to deploy and requires no added infrastructure changes. Customers see a two- to threefold increase in productivity and throughput and a 15% reduction in overtime spending. Locus currently has 4,000 robots deployed across 80 sites.
Sustainability - Sustainability is increasingly top of mind for consumers and continues to be a large factor in their choice of brands. The rise of e-commerce has increased accessibility and convenience but also package waste, with single-use and one-way packaging creating real environmental impact. Nate Faust, the cofounder and former COO of Jet.com (acquired by Walmart for $3.3B), tackles this problem with the launch of his new startup, Olive, which consolidates a shopper's purchases into a single weekly delivery in a reusable package. Olive estimates that consolidating deliveries into fewer last-mile stops and doubling the number of items in a delivery, it can reduce the per-item carbon footprint by 30%. Olive is working with hundreds of apparel brands and retailers, including Adidas, Everlane, Hugo Boss, Farfetch, and Saks Fifth Avenue.
Theme Exploration: Demand Forecasting
Demand forecasting is the backbone of many strategic and tactical decisions retailers constantly need to make. The complexity inherent to the many variables and scenarios involved has made companies treat this as a delicate combination of art and science. Add sprinkles of a pandemic and shifting consumer trends and the complexity grows exponentially.
This is where AI thrives. It can navigate the complexity of inputs and outputs while being flexible, adaptable, and less prone to human biases. Startups offer a range of solutions that allow retailers to be more strategic, faster, and more agile, using fewer resources to forecast and simulate any output they want.
Startups that can kickstart your demand forecasting journey:
Predictive analytics - Prevedere is a cloud-based enterprise predictive analytics provider that helps retailers monitor external leading indicators by collecting and analyzing millions of global metrics in real-time, including macroeconomic factors, manufacturing activities, consumer behavior, online traffic, and weather data. By understanding future product demand 12 to 24 months in advance, retailers get much-needed visibility into potential market movements. Prevedere's Fortune 500 customers in retail, manufacturing, and consumer packaged goods see improved financial performance with more accurate forecasts of future demand for their products and services.
Retail planning - Relex focuses on retail planning solutions, helping both brick-and-mortar and e-commerce companies optimize their businesses with demand forecasting, automated stock replenishment, inventory planning, space and planogram optimization, and more. The platform uses self-optimizing machine learning algorithms to improve outcomes specifically within a retail context. The system helps decision makers see the full picture and allows them to plan more intelligently and quickly. Relex's flexible resource planning and demand forecasting application reduces out-of-stock items up to 85% on a store or aggregate level. Relex has over 250 customers worldwide, including Morrisons, Albertsons, AutoZone, and Circle K.
Grocery planning - Shelf Engine uses its AI forecasting tool to help grocers get the right amount of product on the shelf at the right time. The tool manages the orders, pays the vendors, and only charges retailers for what sells—meaning Shelf Engine buys back what doesn’t. Based on data ingested daily from each store and external data sets, it creates new probabilistic models for each unique SKU, generating the most accurate order for each store. Shelf Engine helps more than 1,000 grocers, including Whole Foods, Target, and Kroger.
Essential Industry Reads
Benedict Evans, a former a16z partner turned technology analyst, writes a weekly blog and newsletter focused on the latest consumer technology trends, mobile platforms, and startup ecosystems. Once a year, he produces a big macro tech trends presentation. This year's presentation, titled "The Great Unbundling," covers how Covid-19 has accelerated innovation that has been underway in retail, e-commerce, media, automotive tech, geopolitics, and tech regulations. We highly recommend watching the video at the bottom of the article, where Evans gives a voiceover of his presentation.
In a recent report, Prologis Ventures—the CVC arm of Prologis, a global leader in logistics real estate solutions—finds that e-commerce warehouse productivity could improve by up to 20% with greater automation. The report demonstrates how the growth of e-commerce has made logistics real estate even more critical as it drives revenue. The research suggests that greater automation adoption could reduce industrial real estate demand as existing facilities become more productive. Read the report to learn more about why you should deploy automation solutions and technologies.
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Forge Retail Team