It is not just Amazon with its new beta in-store tech app Go. Investor data firm CB Insights has gathered information on 130+ startups working on transforming the in-store experience:
Funding to startups offering technologies for use in-store is rising to an all-time high this year. These technologies, ranging from store management platforms, to wearables for store staff, to beacons for in-store analytics and proximity marketing, are on track to see over 170 deals worth nearly $800M in total this year.
It is strange that venture capitalists invest in so many startups and at the same time, e-commerce pure players have a hard time getting money. Even though it should be obvious by now were the growth potential lies. (That is why it is wise to keep up with what specialised e-commerce VCs like Forerunner Ventures are doing.)
There was a record-breaking deal count for 2016, according to CB Insights:
Given the change coming to all of retail, it makes little sense to, say, fund the sixth startup doing “interactive aisle displays” or the 20th startup in the beacon-based analytics sector.
It is like putting lipstick on a pig. Just very expensive lipstick.
The future retail companies will in almost all cases not be former traditional brick-and-mortar retailers miraculously surviving the move to a world for which their cost structures, their business model and their customer value proposition were not build.
So why build for those companies?
At best, the result will be companies building carry-over technology.
Or, to put it in different terms: None of these startups will grow up to be the next Amazon or even just the next eBay or the next Dollar Shave Club.
However local places connected to commerce will look like in the future, only one thing is certain: At their core they will be driven by digital dynamics; not just at their periphery.
Don’t build for the periphery. It’s a waste of time, talent and money.