At the Credo “clean beauty” store in San Francisco’s upscale Pacific Heights neighbourhood, McKenzie Hunt is racking up sales. She is chatting with a regular client — one of dozens in her “black book” — who wants advice on which shade of foundation best suits their skin tone.
“Shade matching is like my superpower — to match anyone,” said Ms Hunt, a make-up artist and store manager.
The feat is all the more impressive given that, on this quiet Tuesday morning, no customers are in sight. Ms Hunt is chatting to a client in Boston, and their conversation is taking place on an iPad.
Welcome to the future of personal shopping. Ms Hunt’s black book chat app is powered by London-based Hero, a start-up bringing digital engagement tools into physical stores. In just three years, Hero has acquired high-end luxury clients in 16 countries, including Harvey Nichols, LVMH and Nike.
The app allows retailers to make better use of employees’ downtime when foot traffic is light, while offering online shoppers a more personalised experience — one that will hopefully bring them back, either online or in person, turning one-off buys into recurring purchases.
“At times like this when it’s quiet, [McKenzie] would just be putting away shipment or fixing the shelves, but now she can walk around with the iPad and be chatting at the same time,” said Cathy Arens, Credo’s director of store operations. “She’s getting like three things done at once — and making sales, which is even better.”
Hero is one of the latest generation of technology companies trying to remake retail in the age of Amazon. The ecommerce giant’s hypercharged growth has thrown bricks and mortar stores into upheaval — even though upwards of 90 per cent of all shopping still happens in stores rather than online, according to the US Census Bureau.
As Amazon has set new expectations among consumers — from fast and free delivery to endless selection and easy returns — retailers are looking for an edge. Going head to head on price and convenience with a company that brought in $232bn in revenue last year is likely a fool’s errand, but a new breed of tech start-ups aims to help them differentiate in other ways.
Hero’s angle is personalisation. Another start-up, San Francisco-based Faire, emphasises its carefully curated selection of products, backed by data showing what is expected to sell well. A third, b8ta, highlights the experiential nature of shopping, letting customers try out tech gadgets from brands that do not typically sell in stores.
In each case, these start-ups are based on a single, perhaps liberating insight. “Amazon is great for buying, but it’s terrible for shopping,” said Adam Levene, co-founder of Hero. “It’s too transactional.”
The 17 b8ta stores around the country emphasise a touch-and-feel, playground-like experience unavailable on a website. In-store cameras even track shoppers, replicating in the analogue environment how “cookies” learn from online shoppers. Last month, b8ta expanded its reach into children’s toys — inking a deal to revive the Toys R Us brand with two store openings before Christmas.
B8ta, founded by four veterans of Nest Labs, the smart products company acquired by Google, passes off inventory risks as well, because the stores operate on a consignment model in which brands pay for space within its store. “We provide the logistics in the back end,” said Phillip Raub, president. “It works from a consumer standpoint but also for our clients.”
Faire, founded in 2017, bills itself as “a wholesale version of Etsy”, which hawks vintage goods and handcrafted decor online. Faire’s business model is to scout for unique products and then market them, risk-free, to a dizzying array of small shops across the country.
“If I’m a small shop, I have to spend a ton of money and take on a ton of risk to do my job, to go and find cool new products,” said Max Rhodes, Faire’s chief executive. “We take all the risk out of that equation. It’s actually try before you buy: they get 60 days to try the products out. And anything that’s not selling within 60 days, they can just send it back.”
Faire’s online marketplace has allowed mom-and-pop shops to experiment with products, some of them bizarre, that they might have been hesitant to purchase. Among its top sellers: a candle in the shape of a cat that, when it melts, reveals a metallic skeleton inside. Another is Poo-Pourri, a scent-killing toilet spray.
Kirsten Green, whose venture capital firm Forerunner invests in Faire — valuing it at $535m — said she spends a lot of time thinking about in-store data concepts, “but Faire really captured my imagination on helping retail with what’s empowering them: unique products”.
Ms Green, a board member at department store Nordstrom who previously invested in Jet.com, Bonobos, Warby Parker and Dollar Shave Club, added: “Consumers want to try something new and exciting, but stores are worried about an investment that might not turn into a sale . . . So we offer them free returns.”
In just two years Faire has placed 10m products into 40,000 stores, according to the company. “By door count that makes us the largest retailer in North America,” Mr Rhodes said, only half-jokingly. “There are 29,000 Starbucks locations in the world. So we have more locations than there are Starbucks.”
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This article has been amended to reflect the fact that Faire has placed 10m products into stores in the past two years, and does not purchase products directly from manufacturers
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