Key takeaways

  • Tech startups may be able to offer retailers differentiated technological innovation solutions
  • Google commissioned PwC report ‘The startup economy’ reveals that retail trade was at the lower end of the spectrum when it came to technological disruption in 2012
  • Retailers may need to review their tender processes to ensure that they do not block accessibility to the tech startup community

PwC’s recently released report, ‘The startup economy’ (commissioned by Google), predicted the Australian startup sector has the capacity to deliver $109 billion to the economy and create 540,000 new jobs by 2033. This represents a significant opportunity for the retail industry, which is seemingly under pressure from consumers who are increasingly adopting digital channels to interact with retailers.

The ‘The startup economy’ report revealed that retail trade was at the lower end of the scale when it came to actual technological disruption in 2012. Although this paints a positive picture, there is limitless potential for tech startups to pitch solutions to retailers, who need to innovate if they are to remain relevant to the connected consumer.

A study of overseas retailers adopting the Consumer Adaptive Retailing approach, such as Tesco (UK) and 8ta (South Africa), illustrates that retailers who have been early online adopters have achieved success in terms of revenue as well as staff and customer retention.

This highlights that innovative and tailored technology is clearly a necessity for Australian retailers adopting a Consumer Adaptive Retailing approach.

Connecting tech startups with retailers

Consumers are empowered, clever and switch from device-to-device without a second thought – something which many businesses are still grappling with. Herein lies a golden opportunity for retailers to connect with tech startups. These businesses often have the ability to approach development with a mindset that is usually dynamic, unconstrained and adaptable.

Perhaps recognising this opportunity eBay contracted Melbourne-based tech startup Ship2Anywhere as its preferred shipping company. The startup which was founded in 2010, offers cheap and simple shipping solutions to individuals and businesses, with a strong focus on service. Highlighting the significance of this win for the business, Ship2Anywhere’s Sales Director, Hugh McFadden commented, “Here we are, Ship2Anywhere, and we’re now a preferred shipping supplier for eBay, which is a $4 billion business.” (Startup Smart

Additionally retailers such as Lorna Jane and Sportsgirl have been pioneers in the online retail space thanks to Brisbane based software startup, Five Faces. The business has transformed the retail experience with its OmniMirror technology, which allows shoppers to photograph themselves in store and share the image on social media to gain instant feedback from friends.

Exploring a ‘growth for both’ opportunity

For tech startups to flourish, the importance of a supportive ecosystem cannot be underestimated. Retailers face significant challenges in terms of logistics, data storage and payment infrastructure, which require ongoing review and support. In order for the retail industry to effectively utilise the expertise of these businesses, the regulatory environment needs to support the long-term survival of tech startups.

In addition to this, retailers may need to review their tender processes  to ensure that they do not exclude tech startups and block accessibility to this community.

Arguably, both the retail and tech startup industries – though sitting at different ends of the business maturity spectrum – are going through a period of significant growth, opportunity and change; the former is potentially the perfect market opening for the latter. With the right regulatory environment and active matchmaking, opening up this relationship could lead to growth for both.


John Riccio

John is PwC’s Global Design & Deploy, Experience Consulting partner.

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