It’s easy enough to think of small businesses as not being particularly innovative – and even to find data to back up that claim. According to the May 2019 edition of the PYMNTS Retail Innovation Readiness Index, when it comes to adopting digital tools like smart POS or storing customer payment info or accepting digital wallets or adding kiosks to their locations, small firms notably trail their larger counterparts at the enterprise level in terms of how much (both in dollar amount and share of revenue) they are investing in building multichannel operations. In fact, on the zero to 100 scale offered by the Readiness Index, small businesses underscore large firms in terms of digital innovation adoption by over 20 points.
It might be easy to glance at the SMB gap and conclude the issue is a simple lack of interest in being innovative, through a closer read on the data turns up a somewhat different conclusion. SMBs have both less capital and less room for error when it comes to a proposed upgrade not living up to its billing. Moreover, most don’t have dedicated IT teams that can be entrusted with the task of building or integrating the latest and greatest in innovative progress. It is not surprising that when picking a POS vendor, the vast majority of SMBs (67 percent) will choose reasonable pricing as their top consideration as opposed to degree of innovation.
And yet, as Bulletin Co-founder and CEO Alana Branston noted in an interview with PYMNTS, while smaller retailers have all of the limitations listed above, they also have an advantage over their larger, enterprise-level counterparts: They tend to be quite a bit more spry and wired to move more quickly, which can be a powerful drive to innovative approaches.
“I think it comes down to how a firm is run and what problems they are trying to solve for,” she noted. “They can often be ready to move in with really unique approaches and concepts and are able to maneuver their teams very quickly toward new ideas.”
Those are the types of retailers that Bulletin, a retail tech firm looking to disrupt brick-and-mortar retail, wants to work with – because they are the brands that are most interested in offering the types of highly curated physical experiences that Branston’s company specializes in building.
Assortment as a Service
In its early days, Bulletin was often called the WeWork of retail – and though that particular reference point carries some issues as of 2019, the basic conceptual comparison still holds.
Bulletin was founded in 2015 to give retailers a way to get a toe into the world of brick-and-mortar retail without having to take on the expense or hassle of opening up their own shop, while still getting something a bit more permanent and substantive than the dime-a-dozen pop-up shops that have dotted urban landscapes for the last few years.
In short, Bulletin takes a physical location and divides it into sections of various sizes and layouts. Next, they offer brands access to that shelf and floor space on a month-by-month rental plan. Brands use the shops in different ways: Some are looking for short-term engagements to launch new products or test-drive new concepts, while others are looking to build a more permanently tethered relationship with real-world commerce.
A relationship that, importantly, takes them out of the day-in, day-out minutiae of running a retail store – because Bulletin does that part. They take care of running the store, keeping it clear and managing the staff – though individual brands can train Bulletin’s salespeople if they so choose.
“What customers are looking for is a unique and unexpected experience. That is what separates fun shopping from just going down to the store to make a utility purchase,” said Branston, noting that the future of brick-and-mortar stores will rise and fall on their ability to deliver those experiences.
Which is why last year, Bulletin began building a marketplace that matches modern, relevant brands looking for shelf space with retail buyers looking to source new product for their stores.
If one looks around at much of the brick-and-mortar retail experience as it exists today, Branston noted, a single word will probably come to mind: antiquated.
“There is so much about traditional brick-and-mortar that is just trapped in the past. We are centered on how to find a new, innovative way to handle this type of business that is just so antiquated in so many ways – as in lugging inventory to trade shows or sending paper invoices,” Branston noted.
Ultimately, Bulletin aims to kill all of that off, she said. The company has just closed a $7 million funding round, enabling them to build out their wholesale platform. Instead of going to trade shows and wandering from booth to booth hoping something interesting stands out, Bulletin wants to offer its retailers what it calls assortment-as-a-service tools, which leverage a host of data streams to point them toward the types of inventory they ought to be buying. To make those matchmaking connections between retailers and up-and-coming brands, noted Branston, the store uses factors like historical sales data, social media data and current bestsellers, run through their proprietary artificial intelligence (AI).
In some ways, it was a move that stemmed from too much success – with a waiting list 3,000 brands deep, Branston realized they couldn’t solve the digital brand’s transition into brick-and-mortar retail because they couldn’t build enough shelf space to do it in a profitable way. But, she noted, there are plenty of retailers – particularly smaller up-and-comers that are very interested in being on the cutting edge – who have shelf space. They just need insights into how best to fill it – insights that Bulletin thinks it can offer.
Because, Branston noted, brick-and-mortar is a changing environment, and consumers will come to a store if it promises something special to see. Other than that, she said, they will likely decamp to Amazon.
“Shoppers want a human touch from a retailer, but just getting them into a store isn’t providing it,” she said. “Surprising and delighting the customer is what does it – and we think we can better match up brands and customers to make that happen more often.”