Standard Cognition

Overview

Standard Cognition is an AI computer vision startup developing technology for physical retail stores. The center of their offering today is cashierless checkout in a retail store, very much competing with the Amazon Go store. Standard Cognition acts as a third party provider to existing retail chains who license their technology and hardware for their stores. A number of chains will be implementing their technology in test stores by the end of 2019. For testing the company also has its own retail store in downtown San Francisco that consumers can use.

Interestingly enough the company claims not to use (or need) facial recognition technology but instead identifies individual shoppers via their shape and movement pattern.

The team is based in San Francisco, California.

Why I like Them

This is technology that feels like the future. The main thing that consumers hate about brick & mortar shopping is the dreaded line at the cashier. Even more fascinating is the technology Standard Cognition has developed may be more advanced than Amazon’s own that powers their Go stores. They need significantly fewer cameras and hardware than an Amazon chain. The space is starting to get crowded however with several other startups and Microsoft developing their own offering.

Mizzen+Main

Overview

Mizzen+Main is a consumer apparel eCommerce startup focused on using advanced performance fabrics to make affordable, high quality, and good looking clothing.  They are constantly pushing the edge on fabric technology.  Currently their fabrics are water resistant, comfortable, wrinkle free, moisture wicking, stretchable, and do not look like normal performance fabrics.  The company primarily sells its products online but has in the last few years expanded to 400+ retail locations and popup locations.

The company is based in Dallas, Texas and currently has around 30 employees.

Why I like Them

Mizzen+Main is following the playbook that has made new consumer companies like Bonobos or Warby Parker such large successes - a reimagining of a long established product that is cool, good looking, and comfortable with an advanced design.  They have a die hard customer base among professional millennial males and have built their brand entirely online with social media.

I also like that the company is experiencing large traction with their biggest challenge their supply chain in order to match the product demand.  I would not be surprised if they are scooped up soon in the large retail and eCommerce war that is being waged between Amazon and traditional retailers currently.

Disclosure:  I have spoken to members of the team.

Inturn

Overview

Inturn is a SaaS marketplace platform for brands to sell their excess inventory to retailers.  For sellers, it allows brands to organize, price, and sell excess inventory quickly through privately controlled channels (vital in allowing brands to protect their image). Underperforming products can quickly and easily be sold off to make room for better selling inventory.  This is especially helpful to retailers after holidays when they face high amounts of merchandise returns.  Buyers (such as discount retailers like TJ Max or Ross) are able to search for a brand's excess inventory and easily negotiate.  They are also able to discover inventory they would not otherwise have known about or have access to.  

Inturn earns revenue through subscription fees to its platform and takes a small percentage of each transaction.  The company was founded in May 2013 and is based in New York City.

Why I like Them

As retail becomes more competitive, faster paced, and business models like fast fashion continues to dominate the clothing industry, the ability of a brand to quickly get rid of its excess inventory for the next set of merchandise is vital.  Inventory management is critical for retailers, especially as turnover is faster with consumer taste becoming ever more fickle.  Inturn is the only firm out there offering brands modern software tools for excess inventory management, allowing for a much more efficient market.  Prior to Inturn, manual tools and processes  were used that were slow and created an inefficient market.

On the other side of the transaction, the retailer benefits as off-price merchandise is one area physical retailers are holding their own against eCommerce sales.  Discount retailers saw foot traffic grow in the last several years and forecasters expect discount retail to grow at a much faster pace than the rest of the industry for the next several years.  The trend seems to be that off-price retail is becoming the core business for many retailers such as Nordstrom.

This is an underserved, inefficient B2B process that will continue to grow, positioning Inturn nicely, especially as it expands its platform to other types of consumer products beyond apparel.   

Disclosure:  All information is from publicly available sources, I have not had any contact with a member of the company or its investors.