Do retailers need middle men to match them up with tech startups?
Build, invest or buy? That is a question being asked among retailers today who are increasingly turning to middle men to help evaluate startups and disruptive technology.
Macy’s, Target and Walmart famously opened technology incubators in Silicon Valley, but there are third parties out there vetting and funding ideas, then matching them with retail partners.
And both groups benefit from the translation and mitigation, according to a panel on the subject at the Shoptalk event in Las Vegas.
“Retailers are bombarded on all sides. We’re the middle ground between corporations and startups,” said Ryan Broshar, managing director of the Techstars Retail Accelerator. “We help startups learning to interact and work with corporations and bring corporations down to a level where they can talk to startups.”
One big problem is that technology and need are changing more quickly than most big companies move. Target is working with Techstars and was “stunned by how quickly startups work,” shared Broshar. “The pace of play can work in the favor of the retailer; it’s the pace that retailers need to be at.”
“Retailers are now being asked to be technology companies, but the things they do every day aren’t going away,” said Lila Snyder, president and EVP of global commerce at Pitney Bowes.
Companies such as Pitney Bowes, Techstars and Simon Venture Group — all panelists on this topic — are acting as these middle men. Meeting with thousands of startups, evaluating technology and investing in the ones that make the cut, then matching them with retail companies.
Blueprint Registry and AddStructure have already benefited from these programs. Both received funding and mentorship from retailers as part of the Techstars program. As Blueprint’s founder Lizzie Ellingson told FierceRetail, the learning curve for both the startups and retailers was quite large. The program didn’t just assist with funding, but helped the startups better understand the company’s needs and culture, and helped keep a corporation the size of Target from crushing a small business before it’s even begun.
Walmart has chosen to take a different path by launching its own incubator — Store No. 8. The initiative will operate under Jet.com and nurture startups.
- How Target’s retail accelerator gave Blueprint Registry a leg up – RetailWire
- Techstar’s AddStructure adds $1.4M in seed funding – Retail Dive
DISCUSSION QUESTIONS: Should retailers look outside for technology solutions or build them in-house? Can third parties help legacy retailers move more quickly? How can retailers push these solutions through their organizations?