Digital Advertising Industry News


What Is Retail As A Service?

January 17, 2020 Sarah Cavill

In a shopping world dominated by digital commerce, is there a place for brick-and-mortar stores? Conversely, can a modest brick-and-mortar business go online without the burden of expensive technology and onboarding? All signs point to yes for both — and retail-as-a-service (RaaS) providers may be the answer.

How Can RaaS Help Retailers Find Consumers?

Shutterstock_558968941 Customers and staff in a busy clothes shop

Younger consumers like “showrooming,” which means spending time trying out products in a brick-and-mortar store, but then ordering the products online. Meanwhile, older shoppers are increasingly comfortable with their ecommerce options. This variability in shopping preferences has left some brands in the difficult position of trying to find their consumers and meet changing expectations without over-extending themselves. Enter Retail-as-a-Service (RaaS) providers which offer solutions for up-and-coming retailers, providing access to technologies like checkout and payment features, streamlined and trusted experiences for consumers and inventory management.

“So many emerging brands lack the resources to make the investments they need to scale, and the last thing that many of them want to do is rely on Amazon as their quickest path to scale,” said Andrew Lipsman, Principal Analyst at eMarketer. “Fortunately, there are a number of RaaS providers in the market helping them grow their operations while maintaining more control of their own destinies.”

Who Are The RaaS Providers?

RaaS providers are in the online and brick-and-mortar spaces, offering solutions for brands that need shopping tech or places to sell online and ecommerce brands that want opportunities to sell in traditional retail environments.

Microsoft Azure Brings Shopping Tech To Retailers

On the technology side, Microsoft’s cloud provider, Azure, and Kroger announced last winter that they are developing a commercially available RaaS product for the retail industry. “Our partnership brings together Kroger’s world-class expertise in the grocery industry with the power of Azure and Azure AI,” said Satya Nadella, CEO of Microsoft. “Together, we will redefine the shopping experience for millions of customers at both Kroger and other retailers around the world, setting a new standard for innovation in the industry.”

Although the Kroger/Microsoft partnership is developing a grocery-specific product called Enhanced Display for Grocery Environment (EDGE), all of the tech is intended to eventually be available broadly to other kinds of retailers which may not have the bandwidth of Kroger. eMarketer predicts “Microsoft will raise its profile in 2020 as a clear alternative for white-label ‘store of the future’ technology, such as cashierless checkout and dynamic pricing displays.”

Shopify Offers Brick-And-Mortar Retailers The Full Online Experience

According to eMarketer, Shopify is already the one-stop shop of choice for small- and medium-sized ecommerce merchants with its storefront, checkout and payment features.” The Canadian company offers more than 70 themes for designing digital storefronts, a blogging platform, mobile-friendly built-in commerce features and customizations allowing brands to create their own online presences.

DTC Brands Explore Brick-And-Mortar Options For Full Retail Experiences

For ecommerce and DTC brands that want to court showroomers and shoppers who prefer brick-and-mortar stores, Neighborhood Goods may be the RaaS these brands need. A “new department store,” Neighborhood Goods provides an inviting, hip retail space for online brands and an app for self-checkout in the store, plus online ordering.

The hybrid sales approach of Neighborhood Goods appeals to online retailers. According to Matt Alexander, CEO and Co-Founder of Neighborhood Goods, the store’s aim is to build a “meaningful platform for DTC brands that want to experiment with physical retail but don’t necessarily have the resources to gamble with signing a standard 10-year lease.” Neighborhood Goods has a sophisticated app that allows for in- and out-of-store purchases, but Neighborhood Goods is intent on focusing on a satisfying retail experience that doesn’t sacrifice brand-building for core metrics. 

As shopping continues to evolve and embrace new consumer preferences, brands also have to evolve and be open to experimentation. This may mean relying on the technology and convenience of RaaS platforms for increased sales, revenue and brand awareness.

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About the Author

Sarah Cavill

With more than 20 years of writing, editing and reporting experience, Sarah Cavill brings to Digital Media Solutions (DMS) a fine-tuned and diverse set of skills. Her work has been featured in notable publications including The Daily Muse, CBS Local, Techlicious and Glamour magazine. Sarah has a passion for current events and the deep-dive research that goes into the content development and brand identity of DMS Insights. In her role as Associate Content Manager, Sarah contributes to the pitching, researching and writing of multiple stories published each week surrounding digital and performance marketing innovations in pop culture, news, social media, branding and advertising.

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