Despite saying goodbye to nearly 60 physical stores across the Middle East in 2019, the region’s largest luxury distributor Chalhoub Group was delighted to open a Dubai Mall store for the latest brand in its portfolio, B8ta.
I’m personally excited to see b8ta finally arrive in the UAE as it’s a retail brand I have kept tabs on since visiting a New York City branch three years ago. B8ta is unique in how it leverages data and great store design to make physical retail accessible to small producers who do not have their own physical store presence. It offers this through its own stand-alone stores and shop-in-shop spaces in other retailers, including Macy’s and Lowe’s in the US. The Dubai Mall location is b8ta’s first international store added to its chain of 16 flagship locations across the US.
B8ta’s offerings are typically trendy consumer tech or home gadgets where it helps for consumers to discover-and-try-before-buying. In look and feel, the design and experience is one you might see as familiar to Apple stores, but with b8ta, there is a much wider breadth of micro-categories and brands. Okay, you’d be right to argue that I have not offered evidence of anything dramatically innovative. So let me tell you about how they approach consumer engagement as it is here where their retail model is truly disruptive.
Firstly, they offer a ‘retail-as-a-service’ model. Rather than taking a cut of the sales from the products showcased in the stores, b8ta passes all revenues on to the producers, making money from renting space to them. As a result, neither b8ta nor the producers care whether you buy in or out of the store, even if you end up doing so on the likes of Amazon. B8ta earns its rental income regardless, and producers have a chance to get their products into customers’ hands for a tryout.
Secondly – and here’s the really interesting part – b8ta does not even see itself as a retailer, rather it sees itself as a software-powered organisation. You won’t notice it when you first walk in, but a b8ta store environment is rigged with multiple sensors, over one hundred cameras and is actively using bespoke software. This is all working together to collect and measure information about store performance based on how consumer engage with the store environment and the products within it. Just as a website can track a visitor’s path to purchase and their reactions to banners, buttons and prompts, b8ta has equipped its bricks and mortar stores to measure everything about a consumer’s visit and how they interacted with the products during that visit.
For every product within the store, there is an accompanying digital tablet that helps you learn more about the product. Like most tablets, this one has an in-built camera. What you might not realise however, is that in a b8ta store, these cameras are always-on and what the camera captures is being used by software to understand more about you and your engagement with the product. Cameras across the store and on the tablet will make estimations for individual consumer demographics, including gender and age.
The tablet camera and software will seek to understand your reactions to the product and what you learn about it via the tablet (e.g. features, colour variants, price etc.), whether you purchase the product and what was the key triggered that led you to purchase (or walk away). B8ta has sought to assure consumers that it doesn’t capture or retain information at an individual or personal level in the process, rather it simply assesses sentiment and reactions using the geometry of the face. Any insights gained are hashed and accumulated against the product, not an individual person.
As a result, for the producers that successfully secure rented space in their store, b8ta offers them unrivalled quantitative and qualitative insights. On the quantitative side, they get traffic data specific to their product. They see the number of ‘impressions’ their product received i.e. how many consumers have walked past their product. They gain insights on ‘discovery’ i.e. how many people stopped and spent five seconds or more looking at the product.
They learn how many staff demonstrations have been requested for their products. They have real-time up-to-the-minute information on how and what time of day their products are selling in the store. On the qualitative side, b8ta has a chat feature built directly into the software on the tablet. If there’s anything that the producer wants more information about – say, how a new colour variant or price point is resonating with consumers – they can send a message to the store and get real-time feedback from the store staff.
B8ta does have a website and sells products on it. However, it sees the website mainly as a channel for people who have previously visited the stores and now want to transact, or as a channel for people who are currently standing in the store and want a product shipped to someone else. These consumers utilise the website as a fulfilment channel. Most of the actual discovery of new products happens in stores and b8ta say that it is very rare that somebody who’s never been to a b8ta store transacts via the b8ta website.
In designing their business model and channel strategy, the team behind b8ta have shown that they recognise the unique opportunities that physical stores offer, and that they know you should not simply replicate or cannibalise this with an e-commerce offering (and vice versa) but play to the unique strengths of each. When a retailer does this, they demonstrate customer-centric thinking and seek to maximise the usefulness and value of each channel available to them to best serve the customer.
I see b8ta as one of the most exciting brands in retail today, and their well-documented success leaves obvious clues for others in how to write a successful future for physical stores. With ever-increasing options and channels for consumers to purchase products from, retailers need to view their physical space as more of an experience than simply a point of purchase. Conversely, retailers will need to monetise their real estate differently if they want to survive in the future.
Doug Stephens, CEO of Retail Prophet says that he sees the b8ta model as an inevitable outgrowth of the maturation of e-commerce, in which we are all just a swipe of a smartphone (or an Alexa voice command) away from buying something. “Media is no longer a means to attract customers to retail. Media is retail,” he says, “and the corollary to that is that physical retail is becoming a powerful form of media.”