XRC Labs: Designing the future of retail innovation

Free flowing venture capital dollars in the digital age have made business incubators and accelerators commonplace, but until now the retail and consumer packaged goods industry didn’t have one it could call its own.

XRC Labs, an acronym of sorts for “accelerating retail and consumer goods innovation,” is set to begin operation on Sept. 28 when it offers its first 10 week session for applicants drawn from a pool of entrepreneurs and innovators. The mission of the accelerator formed by the Parsons School of Design, Harvard’s i-lab and global management consulting firm Kurt Salmon is to create an ecosystem of entrepreneurs and investors to rapidly design, launch and iterate retail and consumer technologies, products and services, supported by partners and advisors in the retail and consumer goods industry.

The accelerator will focus on omnichannel retail, product development and data science, exploring innovations that address such challenges and opportunities as loyalty, customer experience, geolocation, 3-D printing, crowdsourcing, personalization, consumer insights, the Internet of things and video analytics.

XRC Labs offers a new twist on the familiar concept of an accelerator in several important ways. First, it is singularly focused on retail and CPG as opposed to well-established accelerators that focus on growing all manner of start-ups. A second key point of differentiation relates to the mindset of the organization and the entities involved in its creation.

“We believe that innovation has two components with technology and design innovation playing important roles,” said Paul Schottmiller, a partner at Kurt Salmon. “Technology is obviously important, but more and more the value in innovation is driven by design.”

The philosophy regarding the importance of design played a key role in XRC Lab’s decision to locate in Manhattan in space provided by the Parsons School of Design.

“Our focus on creative entrepreneurship, coupled with our expertise in design, makes Parsons the ideal partner for XRC Labs,” said Parsons’ Executive Dean Joel Towers. “Good design drives innovation and is essential to creating products that consumers want. In the lab, entrepreneurs will learn how to leverage emerging technologies and processes to create a personalized consumer experience that will allow them to thrive in a global marketplace.”

The New York location, emphasis on design and singular focus will make XRC unique among accelerators, but there are some familiar aspects. For example, the organization will hold what’s called a “demo day” on December 1 after the first pool of entrepreneurs has completed the 10 week program. Demo day is where entrepreneurs pitch their concept to investors and actual end users of the solution.

XRC is also employing a tiered membership model for businesses who want to be involved with the accelerator and companies developing design drive technology solutions focused on retail and CPG issues. The Silver ($50,000), Gold ($100,000) and Platinum ($250,000) pricing model is best explained using a musical concert metaphor. The Silver level buys sponsors tickets to the concert, the Gold level is another level of access and includes backstage passes while the Platinum level lets sponsors play with the band.

Leading XRC Labs as managing director is serial entrepreneur and retail technology expert Pano Anthos. In his view, the retail industry has a long way to go when it comes to all manner of digital initiatives.

“The shopping experience is still largely the same as it was when Selfridge opened the modern department store in 1909,” Anthos said. “It’s not a technology problem. It’s a design problem. Retailers have the technology to personalize every consumer’s experience and to form products that function like magic. They just haven’t built much that consumers want to use.”