By the end of 2019, B8ta will operate 25 flagship locations, representing more than 45,000 square feet of experiential retail space and nearly doubling its retail footprint this year. The company has seen more than 50 million product engagements, launched more than 1,000 brands on its platform and has more than doubled its store traffic this year, with upwards of 3 million visitors across its flagships.
B8ta is also set to open its Built by B8ta retail concept for apparel, with the opening of Forum on Nov. 15. Forum, a curated fashion and lifestyle popup platform, will be housed at 8406 Melrose Ave. in Los Angeles.
On Oct. 31, the San Francisco-based firm closed on its $50 million Series C round of funding, led by Evolution Ventures as a new investor. Existing investors Macy’s Inc., Khosla Ventures, Peak State Ventures and others participated in the fundraise.
“Stores today are serving as story-telling platforms for brands rather than sales channels. Product discovery and sales happen in different places,” B8ta co-founder and CEO Vibhu Norby said.
Norby believes we’re on the cusp on the “age of experiential retail, a post e-commerce era that will change the way we all shop for decades to come. Our latest round allows us to meet the global demand for our stores and software.”
The B8ta co-founder sees a structural shift at play. “Any modern product brand created in the last 10 to 15 years isn’t interested in doing wholesale,” he said. “It doesn’t want to sell below margin at retail and give up control of pricing or its relationship with the customer to the retailer.”
“[The company] will want to own its voice at whatever channel it chooses,” Norby added, explaining that most product brands want to open their own stores–whether they have one stock keeping unit or many–because they crave that hands-on experience with their customers.
B8ta launched in 2015 around the concept of showcasing new consumer tech products. As the square footage of the stores has evolved, the merchandise has expanded to include other categories, such as wellness. The square footage has ranged from an initial 1,500 square feet to 3,000 square feet, followed by a test of 250 square feet. The average that seems to work best now ranges between 2,000 square feet to 2,500 square feet, with about half of the stores located in malls and shopping centers.
“The magical thing about a marketplace model is that the assortment in each of our stores changes over time. It mirrors the shopper that comes into our store,” Norby said. “Through our software, we see a wide range of attributes and benchmarking data.”
Some B8ta stores will find their leases set to expire when they hit the five-year mark next year, forcing the company to decide whether it makes sense to stay or relocate–even if it’s just one block away. And Norby said the company is open to reworking a space to fit an entirely new store theme, depending on demographics and shopper interest.
As B8ta looks to expand internationally, Norby said investors are keen on helping the company set up an international office, describing the Dubai launch next month as “really, really incredible for us.”
“There’s not a ton of direct-to-consumer companies going global today,” he said, noting that B8ta is leveraging equity partnerships with companies in the region to set up a network of distributors.
Norby mentioned Latin America as a serious contender for future expansion plans. The stores in Miami, where it has a large Hispanic customer base, have been performing well, he said.
“We do have people come in and buy out all the inventory,” Norby said.
Separately, the company is licensing its Ark Marketplace software, which underpins the B8ta retail-as-a-service concept. This allows retailers as well as retail landlords to operate their own retail marketplaces, Norby explained.
B8ta has spent the past two years fine-tuning and testing the marketplace software at Macy’s, with the goal of attracting the top 500 retailers in the U.S.