The gadget store that doesn’t care if you buy anything

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Two years ago, a few undergraduates at UCLA invented a pocket phone charger called Flux. They sold it around the corner of Santa Monica.

Flux became a success, so they started accepting orders online. They packed them up and shipped them to patrons at a fraternity house.

“It wasn’t the best condition to run a business, especially in terms of cleanliness, that’s when we decided to outsource distribution,” Flux co-founder Miles Anthony said. .

Now Flux chargers are priced between $ 30 and $ 50 at B8ta, a retail store with eight locations in the United States.

The tech gadget store is betting on a new kind of business model. Instead of taking a percentage of the profits, it charges hardware manufacturers a flat fee to display their product. For example, Flux pays $ 2,000 per month for placement in multiple stores.

In return, B8ta collects data on interactions between buyers and products.

Its San Francisco store has 24 stereoscopic cameras monitoring sales and visitors’ browsing habits. The cameras are clearly visible throughout the store and the data collected is anonymous, the company said.

Although some retailers already track buyer behavior, B8ta has made it part of their way of doing business. Gadget makers receive updates with the number of impressions, finds, demos, and sales their products have received.

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Another goal of the store is to educate shoppers on the products. In fact, b8Ta doesn’t even care if you buy the items elsewhere.

“If you want to buy it from Amazon, that’s okay,” B8ta co-founder Phillip Raub said. “We are not threatened by this at all.”

Inside, the space looks like a more moody cousin of an Apple Store. B8ta the stores are open and minimalist, with product lines to touch and try. An iPad Mini sits next to each gadget and displays product information about it.

B8ta’s inventory is a mix of useful and kitschy tech, much like what you would find in a Brookstone or Sharper Image. There are wi-fi speakers, security cameras, electric bikes and connected home devices. If you’re looking for something unusual, try the floss dispenser that frowns when you spend too much time without flossing, or the Fondoodler “hot glue gun” cheese dispenser.

A place in a real physical store would not be possible for many of these businesses. The majority of gadgets come from startups founded by people who started a successful Kickstarter campaign.

“Where would they be able to bring their equipment to a store? Said Vibhu Norby, another co-founder of B8ta.

Founded in 2015, the company wants to position itself as the next trend in retail, a sector currently undergoing major change. Traditional stores are closing at an alarming rate, retail stocks are struggling, and some businesses are going bankrupt. B8ta sees the changes more as an opportunity than a warning.

“We’re tired of saying retail is dead,” Norby said. “It’s too important for an industry to just write off and say it’s dead.”

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Meanwhile, online sales are increasing, fueled by companies like Amazon. But retail will survive because there is no way to recreate the “emotional experience of a demo,” according to the founders of B8ta. You can’t tell how a product feels in your hand or hear the quality of a high-end speaker on the internet.

“It’s pretty clear that a multitude of legacy players are becoming less and less relevant,” said Mark Cohen, director of retail studies at Columbia’s Graduate School of Business. “There is no shortage of clients and most have a lot of disposable income and / or access to consumer credit. They will certainly continue to shop according to their needs and wants. They just don’t shop at their ubiquitous local Macy’s or JC Penney anymore. . ”

One of the ways these traditional retailers are trying to stay relevant is by partnering with B8ta. The company has made deals with established chains like Lowe’s and Macy’s to open mini-stores in their existing locations.

For Anthony de Flux, that’s one less thing to worry about. He said the entire production process for his chargers is automated – he doesn’t even see the product anymore. The flow chargers are made in China and shipped directly to a distribution company in Austin which stores and ships the inventory.

The vast majority of Flux’s sales are currently on Amazon.com, but a retail outlet still has its appeal.

“We walked into a pretty cool tech store,” Anthony said. “It really validated our whole business and our product.”

CNNMoney (San Francisco) First published on November 17, 2017: 2:46 p.m. ET

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