Target Accelerators recently announced the 2020 cohort for their technology-focused accelerator program. We're happy to share that Popspots is among the ten accepted startups, and we feel fortunate to be working with so many talented professionals in the retail industry.
This year's cohort marks the fifth iteration of the Target Technology Accelerator, which was created for tech-enabled startups with the potential to augment the retail value chain. Our team will be given instructive guidance from leaders at Target as well as partners like Intel, Microsoft for Startups, Procter & Gamble, Salesforce, and Zebra.
At the end of 2017, Popspots was in about eighty local independent stores. Since then we've been adding hundreds more every year, and we recently expanded to over a thousand stores. Being accepted into the Tech Accelerator Program feels like a meaningful benchmark on our journey towards growing nationally and building more partnerships with large retailers.
We interviewed Don and Marlow, two of our founders, and Scott Mackey, Vice President of Strategy and Sustainability at Smarter Sorting, a fellow Austin startup in Target's 2020 cohort, to get their thoughts on growth, Austin's startup ecosystem, and the future of retail.
What's Next for Popspots with Don & Marlow
Word on the street is that Popspots joined Target's Tech Accelerator Program! How are you feeling about it?
Marlow: We're incredibly excited and grateful to be included in the program! The team at Target behind the program — Sarah Hill, Alana Hinkston, Chris Ostoich, Jason Breen, and many others — have worked really hard to put it together and we've already learned a ton in the first two weeks.
Two Austin startups, including ourselves, were selected to join the program. Is this indicative of our startup community's potential? Where do you think we currently stand compared to other entrepreneurial tech hubs in the states?
Marlow: For sure! In particular, our CPG community is one of the strongest in the country. Industry-leading brands like Waterloo, High Brew, Siete Family Foods, Tito's, and many more call Austin home, so we're a great place to found a retail tech company. That said, when it comes to more general tech startups, I think we have a long way to go before we're truly competitive with the Bay Area, because our VC options are still pretty limited.
Don: We think there are a lot of great companies here in Austin, but the local startup community has long suffered from a lack of early-stage venture funding. Generally speaking, Texas LPs are more conservative in their investments and as a result, some of the more innovative early-stage companies find it difficult to secure funding or have to court investors outside of Texas, which can be more challenging.
We've seen some encouraging signs over the past few years with the announcement of larger funds from Silverton Partners, Next Coast Ventures, and a handful of others, but we still fall far behind the coastal hubs in terms of VC capital deployed.
As we look towards our network expansion in the future, what are some ways that we're preparing for that growth as a company?
Don: We've made large investments in hardware the past six months to allow us to scale the network more quickly, and we're continuing to monitor our supply chains to ensure we can meet the increased demand for our product.
Can you reflect on what our product vision was when Popspots started off and how you see it changing moving forward?
Marlow: When we started, we were trying to put digital displays in the checkout aisle. Since we built the displays ourselves, it was already a major undertaking for a team of three (my co-founders Edward Cates, Don, and myself). Don spent months in Shenzhen, China prototyping, and eventually producing our first displays while Edward and I wrote the necessary software here in Austin.
As we began testing our prototypes in stores, something interesting happened: retailers asked if the displays could track out-of-stock products. We hadn't considered this use case, and, at the time, we didn't even know out-of-stocks were an issue. After talking to more retailers, we learned that solving this problem could grow their sales by $600M in the checkout aisle and by over $50B throughout the store. Thanks to this insight, we modified our displays so they could not only advertise products but also track out-of-stocks.
This change was a turning point for us, as out-of-stock detection quickly became one of the key features that convinced retailers to adopt our technology. Advertising is still our core business today, but long term we want to help our customers manage their products in-store as easily as they market them on Grocery TV.
Modern retailers consider the guest's experience along with product selection and financial value— to achieve this balance they have to get really good at understanding the unique needs of each community they serve.
When someone talks about the "future of retail", what do you picture? Where do you think the industry is headed?
Marlow: The future of retail is visible today. If you've ever shopped in a store with a limited product selection that still manages to have exactly what you're looking for, you've experienced what's coming.
Throughout its history, retail strove to expand product offerings and reduce prices. Generally speaking, that was great because it meant your dollar went further and you had more things to spend it on. But the natural end-state of this strategy is a gussied up warehouse that's as depressing as it is overwhelming.
Modern retailers consider the guest's experience along with product selection and financial value— to achieve this balance they have to get really good at understanding the unique needs of each community they serve. In other words, SKU counts come down yet the products available match closer to what the guests want. In doing so, guests feel less overwhelmed and better understood.
To achieve this vision at scale, retailers will need to invest in technology that makes it easier to manage product merchandising and tailor marketing on a store level; it's these critical capabilities that we're striving to build.
Thanks for the insight!
We're in good company: Smarter Sorting
Smarter Sorting, our Eastside neighbor, was also selected to join the Tech Accelerator. Their team is committed to reducing waste and making a more sustainable future by maximizing the salvation of unwanted items.
We had a chance to talk to their Vice President of Strategy and Sustainability, Scott Mackey, on the state of our startup ecosystem, where retail is headed, and what improvements he expects to see.
What's your perspective on Austin's standing compared to other tech hubs in the states?
Scott: Austin possesses a vibrant startup community that attracts talent from all over the world. The entrepreneurial spirit of residents coupled with the business-friendly culture have allowed Austin to skyrocket to the top of tech hub radar over the past decade. We believe Austin is well poised to surpass many of the incumbent tech hubs in terms of professional talent, quality of life, and the degree of innovation achieved every year as more and more people flock to the heart of Texas.
Not only that but with the cost of living a fraction of what it is in areas like San Francisco and New York City, establishing Austin as the new Silicon Valley - i.e. the “Silicon Hills”, is a milestone that could be right around the corner.
In your opinion, where is retail headed in the future? Especially considering the impact that COVID-19 will have on health and safety.
Scott: Retail is rapidly accelerating towards a fast-paced, tech-driven business model where eCommerce and efficient supply chains reign supreme. We believe that COVID-19 will only exacerbate the trends that were already gaining traction among consumers. Prior to COVID-19, retail was adopting contact-free exchanges as more and more people buy and sell products online. We believe that retail will rapidly diversify to accommodate the needs and buying preferences for every type of consumer. In some cases, this means brick and mortar stores that serve as shipping and exchange hubs. In other cases, this means supply chains centered around eCommerce and shipping fulfillment centers.
COVID-19 has also exposed the need for greater insight into consumer products. With a shifting focus to health and safety, consumers demand to know the ingredients in their products and the health and safety implications. Many products claimed to effectively combat COVID-19, but truth and marketing jargon are rarely one and the same. Consumers demand transparency, and quite frankly, they deserve it. A majority of retailers and brands are ready to deliver on this and will continue to focus on being transparent with their consumers.
Do you believe that we'll see major improvements when it comes to sustainability?
Scott: Absolutely! Sustainability and corporate responsibility have become the driving factors for many consumers when purchasing products and developing brand loyalty. Both retailers and brands have taken notice, and have begun implementing robust sustainability programs at their organizations. Sustainability initiatives are further enhanced by big data and operational transparency, which are gradually overhauling legacy practices and paving the way for meaningful progress.
Furthermore, innovation in technology, chemical safety, and waste management is making sustainability easier for retailers and brands to implement. With consumers voicing their sustainability preferences loud and clear, retailers and brands are responding and iterating quickly to accommodate these buying preferences. While many believe sustainability is merely a trend, we believe it is here to stay for the long term.
Thank you for sharing, Scott!
Here's to the (bright) future of retail
We're glad to see that Austin's startup community is continuing to gain national recognition. We believe our city has the potential to become a formidable tech hub like Silicon Valley, or better. Although there are areas that need work, by supporting each other and giving back to the community we see the opportunity for Austin's ecosystem to thrive.
We predict that Austin startups will play a significant role in establishing a transformed retail space— one that will give customers a greater sense of safety, empathy, and personalization. Retail has experienced many disappointments this year, but we're staying confident about our industry's ability to adapt to these changes and develop shopping experiences that better suit customers' needs.
The startups in Target's 2020 cohort are already making an impact in the industry, and we're looking forward to learning with them. Our team can't wait to see what opportunities present themselves and how our company will continue to grow from here.
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