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b8ta disrupting retail—again

Fresh off its win as “Store of the Year” in the annual Shop! Awards design competition, tech-gadget retailer b8ta is extending its business in a new direction it calls “store as a service.”

B8ta has launched an initiative to help brands open stores with minimal effort compared to the traditional retail model — and for much less cost, according to the company. The new platform, “Built by b8ta,” comes as more and more brands, many of them digitally native, are looking to enter physical retail for the first time. B8ta aims to help them take the leap by providing them with a set-up store, complete with fixtures, state-of-the-art technology and staff. It describes the offering as “a fully built-out store.”

“We take care of everything — from the real estate to hiring and training the staff — on behalf of the brand,” explained Vibhu Norby, CEO, b8ta. “There is no upfront cost for the brand to build out the store.”

The concept builds on b8ta’s model for its own stores. Debuting in late 2015, in Palo Alto, Calif., the company now has nine freestanding locations and 70 in-store shops at Lowe’s. The stores are designed to give consumers a hands-on demonstration of cutting-edge tech products, many from emerging start-up companies.

The business model is unusual: Instead of earning revenue from product sales, b8ta leases space in its stores to the product makers, who pay a monthly subscription fee to b8ta. (All revenue goes back to the makers.) The makers also benefit from b8ta’s software and analytics program, which gives each brand key insights into critical real-time selling metrics, from dwell time to conversion rates, to help them understand just how shoppers are interacting with their products.

Brands that open a store using b8ta’s new platform won’t have to negotiate with landlords, sign a lease, hire design and construction firms, select fixtures, or hire store staff. And they won’t have to worry about technology. Instead, they will leverage b8ta's data-driven platform and software that includes staff scheduling, inventory management, checkout and other capabilities.

“The brand will keep 100% of its sales, and completely manage store operations using our software,” Norby said. “We also provide powerful analytics that help optimize every piece of the store experience for performance.”

In return, the brand will pay b8ta a flat, monthly fee that is dependent on the square footage of the store and the going cost of the real estate in the store’s specific market. The company has partnerships with leading real estate owners as well as architects and contractors.

“Our economic model makes opening a store with us at least 50% less expensive than doing it on your own,” said Norby. He predicted that in 10 years, most brands who are going into physical retail for the first time will use someone else’s infrastructure.

Norby added that the b8ta platform lends itself to a variety of brands, including direct-to-consumer apparel companies, who are going into brick-and-mortar for the first time.

“Our goal is to have these stores open for a long time,” Norby said, “with a minimum of six months.”

The first brand to use the “Built by b8ta” platform will be Netgear, whose products include a wide array of home networking solutions. It will open a store in June, in the heart of the Silicon Valley, at Santana Row, an upscale lifestyle center in San Jose, Calif.

And more are in the works. b8ta expects from 10 to 15 more brands, including cosmetics, apparel and furniture retailers, to open launch stores using the “built by b8ta” format this year.
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