Over the last few years, start-up companies have been disrupting IT and technology. From Huddle to Uber, early-stage digital companies coming out of California's Silicon Valley and East London's Old Street are continuing to turn the heads in both the business and consumer world.

But why should retailers be paying attention to these small vendors? Essential eCommerce attended a TrueStart start-up investor evening last week to find out what all the fuss is about when it comes to start-ups.

TrueStart

From the 24th floor of The Shard, with views of skyscrapers stretching across East London, a select group of investors, retailers and innovators on the bleeding edge of technology gather – drink in hand – to network before 12 start-ups take centre stage to give their five minute elevator pitches to a packed room.

One of a growing number of start-up investment hubs in the capital, TrueStart focuses on encouraging the retail start-up sector to grow through a six-month programme of industry expert nurturing and networking with the hub's ecosystem of retailers.

The hub – which is a sister company of investors True Capital – invests anything from £25,000 to hundreds of millions in innovative start-ups. It's bi-annual programme hand-picks 12 companies from 1,000 start-ups across 31 countries to be part of the programme which culminates in an evening of pitching.  

Baz Saidieh, CEO of TrueStart, says the purpose of the evening is to give the investor and retail world an update on the innovations which have been brewing for the last six months at TrueStart HQ.

"This is a sneak preview of the disruptors which are entering our industry and to enable our businesses to fundraise to the next level," he explains.

From eCommerce to analytics companies and even companies launching trendy food products, all 12 start-ups are hoping to gain funding from investors and a platform for their products from retailers.

Retailers looking for innovation

Those retailers attending the evening included the likes of Debenhams, Tesco, Selfridges, Starbucks, Karen Millen and Marks & Spencer, as well as restaurateurs including the Hummus Bros and Five Guys, alongside the tech giant eBay.

But why are retailers interested in working with start-ups?

Lucy Larkin, managing director in Accenture's UK retail practice – one of TrueStart's programme partners – says it isn't just retailers. "Everybody needs to think about working with start-ups. And I think if you look at the market and the level of disruption that's gone on in recent times – Uber, AirBNB – no one could have imagined this a few years ago, so we can't afford to isolate ourselves from this type of thinking that makes these companies."

Another TrueStart programme partner, River Island, wants to be at the forefront of innovation by looking out for the latest technologies, but the retailer also appreciates the energy start-ups can inject back into the retail organisation.

River Island CIO, Doug Gardner, tells Essential Retail the retailer has been looking at innovation for a very long time.

"We get real insights from these companies," he says. "We’re going through a digital transformation right now, we’re trying to think agile, really embrace digital, build out our capabilities inside the company. And we found it absolutely fantastic to take our own team and getting them working with these start-ups – they come back so full of energy.

"If you can harness the start-up mentality and energy into a company like River Island, it’s a massive win – the start-ups win because they get really good open access to me and my team, and we get access to their energy, talent, enthusiasm," he adds.

Craig O’Donnell, head of information systems at Land Securities, says start-ups allow the retail sector to continue to grow and diversify.

Land Securities uses the programme to stay at the forefront of innovation, and as a TrueStart partner, the UK's largest property developer in the UK offers the participating start-ups access to its range of premium retail locations across the UK so they can test out their technologies.

Meanwhile, David Page, executive director, digital transition at Visa Europe also said established players need to open their doors to fresh ideas, and invest time and money into nurturing them.

Retail is at the forefront of digital technology

Saidieh argues that retail is one step ahead of other industries when it comes to using start-up technologies. "I think there's an injection of energy working in retail, you're always looking for innovation and something to delight your customer or make things easier for your employees," he says.

He believes the industry needs start-ups to help implement the fast-paced digital innovations and combat old legacy-IT ways of thinking.

"I think start-ups bring real disruptions," he says. "Companies who aren't bound by the corporate world, or a way of thinking from an industry – always being told you shouldn't do X, Y and Z.

"They don't come with preconceptions, but develop left-field ideas and the genius of bringing these left field ideas in which will let retailers disrupt the marketplace. River Island and Accenture and Land Securities are keen to get their executivess working with theses young start-ups to pass on the energy and help them think differently."

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