Many retail value chain stakeholders continue to rely on outdated systems to run their businesses: from legacy marketing and sales platforms, to old-school distribution and logistics solutions.
These tools create inefficiencies with everything from supply chain and inventory management, to customer-data and profit-margin analysis. They also prevent retailers, suppliers, carriers, and manufacturers from:
- Scaling and optimizing their day-to-day operations
- Increasing productivity across their organizations
- Responding quickly to market changes (e.g., inflation)
- Streamlining sourcing and procurement processes
- Gaining (and maintaining) a competitive advantage
Digital transformation has been accelerating in the retail industry in recent years.
A 2024 Coresight and Workday report found nearly half (45%) of retail leaders said they "believe AI and machine learning (ML) will help them make better business decisions" in the years ahead.
Yet many companies tied to the retail value chain have hesitated to adopt new, emerging technologies, including AI tools, to enhance operational efficiency and support activities across their organizations.
Some of this is due to a legacy mindset.
But it's also due to a lack of understanding how purpose-built solutions can solve big problems facing the retail value chain.
That's where technology-startup creation can help.
Addressing retail value chain technology gaps and opportunities through startup creation
That's not to say there aren't already a lot of impactful tech startups out there helping to solve for critical pain points and challenges within the retail value chain today. There are many. For instance:
- Happy Returns is simplifying 'buy online, return in store' (BORIS) for consumers and boosting foot traffic for omnichannel retailers with brick-and-mortar locations nationwide.
- Faire is helping retailers more easily find local suppliers with products that are ideal fits for their stores using ML models that connect them with relevant brands in their area.
- Luca is enabling retail brands to improve their pricing models and better predict sales through an AI-powered solution that leverages market intelligence and sales pattern data.
These businesses and others like them are tackling big issues facing retail industry members.
But there are many more problems that remain unaddressed that new tech startups could better empower:
- Consumer Packaged Brand (CPG) brokers to manage supplier and retailer relationships, product line sell-through, and replenishment
- Distribution Center managers to get visibility into supply-chain disruptions and better manage inventory
- Retailer Marketing teams to reward customers and subscribers with individualized incentivizes
- Omnichannel Service reps to speed up ticket response and boost customer retention and loyalty
- Supply Chain firms to better identify inefficiencies and gain real-time product visibility
Some established retail players are taking it upon themselves to innovate internally and introduce new tech in their own stores. Consider Walmart. The retail chain announced it's testing digital shelf labels to reduce walking time for in-store employees and streamline stock replenishment.
This kind of corporate-led innovation is necessary. But it should also extend beyond the confines of their organizations.
That's why Fieldbook Studio, the first U.S. Treasury-approved venture studio, operated by High Alpha Innovation, is working with the state of Arkansas to build new companies that unlock growth and transformation across the retail value chain — the state's 'right-to-win' industry.
Thanks to State Small Business Credit Initiative (SSBCI) matching dollars provided by VentureWell, backed by the Walton Family Foundation, Fieldbook will launch new tech startups in Arkansas that aim to solve big problems across the retail value chain.
For example, our discussions with industry members helped us realize one issue — retailers' ability to harness big data for improved decision-making — has been a primary focus for many venture builders.
The next challenge we believe is worth tackling, based on these chats, lies in better connecting this retail data across online and in-store transactions: from retailer to retailer, and platform to platform.
Disrupting the retail value chain with new AI, analytics, and omnichannel technologies
The right tools will provide insights into purchase behavior, sales trends, and inventory needs across retail brands' digital and physical stores and direct-to-consumer commerce efforts. A unified analytics view can empower them to make more-informed choices that boost efficiency and profitability.
Most CPG brands we've talked to complain about data silos:
- One platform is good at pulling and analyzing data from large retailers (Target, Walmart, etc.) but it doesn't show you their dot-com marketplace data (think Walmart.com and Amazon.com first- and third-party sales data).
- Meanwhile, another tool can provide online shopping data but doesn't pull in brick-and-mortar customer data.
It's not just anecdotal info that convinced us this is a problem worth solving. Our team uncovered plenty of industry research that validates our suspicions and confirms this is a pressing, persistent issue.
The Coresight and Workday study also found 64% of North American retailers cited a lack of access to real-time insights on relevant sales trends as a top challenge today.
This inability to understand consumers' broad buying behavior often leads to low customer satisfaction.
A 2024 IBM survey found just 9% of shoppers are satisfied with in-store experiences. Meanwhile, only 14% said they were happy with purchases made online with retailers. The report rightfully pointed to one answer:
Infuse AI and analytics into core retail operations to create omnichannel shopping experiences "that are intuitive, unified, personalized and efficient."
Northwest Arkansas has "emerged as one of the nation's centers in retail data analytics," per the Arkansas Democrat-Gazette. That's why Fieldbook is seeking to find ways to tap into new opportunities that can help the retail value chain unlock the power of robust, real-time data in their respective fields — data that can:
- Implement hyper-segmentation strategies for targeted, omnichannel marketing campaigns
- Lead to smarter supply-chain analysis that can help logistics leaders optimize operations
- Help warehouses more easily track inventory as it moves from facilities, to docks, to shelves
This, of course, is just one major retail value chain pain point we've identified to date.
Our chats with other stakeholders — suppliers, manufacturers, distributors, and CPG brokers, among others — has shed light on other difficulties retail organizations deal with today and could be addressed through startup creation.
Fieldbook's goal: Create new solutions to empower all retail value chain members
Landing on a novel concept for a retail-related company is one thing.
Providing advantage to that startup early on — by attaching the right founder and helping to connect them with early-stage funding and initial customers — is an equally vital part of our venture-building process.
There are existing startups developed in incubators and resourced via accelerators that will positively impact the retail space in the coming years. But our method of building companies at Fieldbook and High Alpha Innovation, using a problem-led ideation approach, offers a competitive edge:
- Founders join an established business with a validated product-market fit, and take the reins to strategically grow and scale the company.
- Arkansas can drive economic impact statewide, and create an entrepreneurial environment that attracts more workers and outside investors.
- Retailers can incorporate the SaaS tools offered by our portfolio companies into their tech stacks to address the above challenges.
Through Fieldbook, we believe we can nurture the next generation of Arkansas businesses that can disrupt the retail chain: from how products are developed, to getting them in the hands of customers.
With the retail tech market set to explode between now and 2030, we know there's an appetite from industry players and investors for new tools to tackle ongoing problems facing the industry.
And Fieldbook will provide bold solutions (and many of them) in the form of advantaged startups.
