This startup wants to help retailers like Toys R Us, Macy's, and Lowe's revamp their store experience - and it's raised $88.5 million to do it

Shoshy Ciment

Feb 12, 2020, 19:20 IST

This startup wants to help retailers like Toys R Us, Macy's, and Lowe's revamp their store experience - and it's raised $88.5 million to do it

Shoshy Ciment/Business Insider

B8ta partnered with the reincarnated Toys R Us to help launch two new stores that track customer movement and engagement.

B8ta, a tech-powered startup founded in 2015, uses software and analytics to create experiential store concepts.
The company has dozens of its own stores but also partners with various retailers to revamp their in-store experiences.
B8ta has previously partnered with Toys R Us, Macy's, and Lowe's.
"If a brand is really bought into that idea and notion and wanting to make significant change, then usually we think that there's a path forward," B8ta president Phillip Raub told Business Insider.
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Stores might be closing in droves, but brick-and-mortar retail isn't dead. B8ta, an experiential retail concept that focuses on refining the in-store experience, is a testament to that. The tech-powered startup founded in 2015 uses software and analytics to create experiential store concepts.

"I think the whole thing of 'physical retail is dying' is something that's been way overplayed and sensationalized," B8ta president Phillip Raub told Business Insider in a recent interview.

In addition to its dozens of stores across the US - featuring products from lesser-known brands in spaces designed for engagement - B8ta also helps hundreds of popular brands and retailers make the most out of their physical locations with a model that focuses on interacting with a product in real-time.

B8ta has partnered with Macy's, Lowe's, and, most recently, Toys R Us. The once-defunct toy brand was revived with the help of B8ta's technology, design concepts, and data-collecting tools, like sensors that can observe foot traffic and track engagement with different products.

Shoshy Ciment/Business Insider

A station at the new Toys R Us lets customers engage with toys in real-time.

Stores are evolving, not dying

For B8ta, the growth of online shopping isn't necessarily a death knell for physical stores. It's a call to evolve and innovate.

The idea is to learn from the e-commerce model. That is, a physical store should feature the same convenience and relaxed atmosphere that exists within online shopping.

"We kind of reverse-engineered the online space into the physical world," Raub said of the B8ta model.

As such, B8ta aims to create a pleasurable, low-pressure store experience for the consumer, encouraging interaction and engagement with products. The software-powered stores can help brands learn about what interests the consumer so they can effectively adapt the marketing and displays within their stores accordingly.

For example, the B8ta-powered Toys R Us store is divided into different stations of play. Customers can put blocks together at the Lego station or practice target shooting with a toy gun in the Nerf section. This model encourages play and discovery while sensors monitor and track engagement, offering valuable insights for the brands involved.

Data is key

B8ta doesn't make money from sales in the stores it helps create. Instead, retailers that partner with the company pay a monthly fee in return for store space and the B8ta technology and design.

Through a partnership with data analytics company RetailNext, B8ta uses sensors in stores to track and measure consumer engagement across different areas, thereby gathering data on consumer preferences.

Shoshy Ciment/Business Insider

Sensors track customers' movements in the new Toys R Us store in Paramus, New Jersey.

The data that is collected is important for a brand's understanding of where and why consumer engagement is happening.

To Raub, the sensors essentially provide an in-person version of the data points that can easily be gathered from online shopping. But the data that B8ta collects could actually be even more telling when it comes to consumer decisions. Raub said that's because of the human interaction component that can only exist in physical stores.

For those spooked by the thought of being tracked and analyzed while shopping, Raub said not to worry.

"Privacy is at the paramount of everything that we do," Raub said, explaining that the data extracted from each customer is rather vague - the sensors can determine an estimated age range and gender.

Looking to the future

Having already secured $88.5 million from investors including Evolution Ventures, Macy's, Khosla Ventures, and Peak State Ventures, B8ta is pioneering a new, positive wave of brick-and-mortar retail, one that focuses on store experience and a seamless connection between shoppers, products, and brands.

Traditional retailers are not blind to the change - hundreds have already turned to B8ta for assistance in navigating the necessary evolution in the physical retail space.

For a partner to succeed with B8ta, Raub said, it is essential for them to be excited about new ideas and change.

"If a brand is really bought into that idea and notion and wanting to make significant change, then usually we think that there's a path forward," Raub said.