- As consumers increasingly become omnichannel shoppers, retail tech investments hit $31.5 billion in the second quarter, over triple the amount for the same period last year and a 4% increase from Q1, according to a report from CB Insights.
- In preparation for consumers' return to shopping in physical locations, funding for in-store tech reached a record $3.3 billion in the second quarter — a 46% rise quarter over quarter, the report said.
- E-commerce funding, however, is still going strong. It grew 31% quarter over quarter to $16.9 billion, while Amazon third-party marketplace brand acquirers raised $1.2 billion in the quarter. Meanwhile, investments to supply chain and logistics tech rose by 13% to $9.6 billion in Q2.
Now more than ever, retailers are turning to technology to solve long-term and immediate challenges, CB Insights said in its report. Demand for faster delivery, seamless cross-channel shopping experiences and personalization coupled with labor shortages are driving the need for retail tech innovations.
The report indicates that retailers will lean into tools like robotics and machine learning to run stores more efficiently as the need for labor grows.
"Tools that can optimize warehouse operations, delivery routes, and more along the fulfillment chain will be a top priority, and autonomous trucking will continue to gain traction," according to CB Insights.
Interest in supply chain innovations has already been proven out in some areas of retail. Target said it is testing new methods to deliver packages faster in April. Meanwhile, Walmart invested an undisclosed amount into autonomous vehicle startup Cruise around the same time and its executives have said it intends to heavily invest in a more automated supply chain environment.
CB Insights also documented the rise of Amazon brand acquirers in its report, which nabbed nearly $1.2 billion in funding in the quarter. The market for companies looking to acquire and scale third-party sellers from Amazon seems to be on fire lately, with digital commerce company Perch raising $775 million in May to grow Amazon third-party and DTC brands. Likewise, Heyday, which helps grow marketplace brands, raised $70 million in May and Foundry, which both supports and acquires digital brands, raised $100 million in July.
CB Insights's first quarter report showed that retail tech investments were at their fastest run rate in half a decade, and investments don't appear to be slowing down anytime soon. Retailers outside of just Walmart and Target have been working on bolstering their tech and digital capabilities. Neiman Marcus, for instance, announced it is embarking on a number of digital and tech investments worth $500 million over the next three years.