Israeli Retail Tech: The Billion Dollar Boom
24 July 2019
Facts that speak for themselves
Despite being a country of only 8 million people, Israel today boasts over 500 active retail start-up companies- making it, per capita, second place in start-ups in the whole world. It can claim an astonishing 10% of the total amount invested in retail technologies worldwide. As the graph [IMAGE1] shows, the last three years have seen no less than $1billion invested.
Some of these start-ups have been acquired already for eye-watering sums, including Retalix to NCR for $650million and Cimagine to Snap for $40million. Big retail players are hungry for tech that complements their strategy, and the likes of Nike and Alibaba have also made acquisitions. Many of the global tech giants – including Amazon, Alibaba and eBay – have established R&D centres in Israel, while the number of retail scouts regularly making the journey to Israel continues to grow.
Retailers can’t ignore it: something significant is going on in Israel.
Why Israel? Why now?
The high profile Israeli tech has in Europe has in the main been due to its world-leading cyber-security. Israel has also, however, been a significant player in AI, Analytics and IoT technologies. But in the last few years a sizeable shift has taken place which has now reached a “tipping point” of irreversible momentum: these technologies have found a vertical focus – retail.
Oren Paran founded the non-profit organisation Retail Innovation Club a couple of years ago, and has seen notable success in matching up the right start-ups with the right interested global retailers. In considering why Israel has proven to be such a hotbed of innovation Oren points also to the association with leading-edge military technology: “A sensor that was created for $100 million for a jet pilot is today available at a very low cost price and can now be applied to a cashier”.
The ‘hub’ mentality
I’ve been in technology marketing long enough to know it’s very exciting when a new ‘hub’ comes into being. The synergies of thinking (as well as potential economies of scale) that come with a critical mass of smart, driven people being in close proximity to one another creates a self-sustaining feedback loop of ideas and innovation.
Here in London we’ve been lucky to be the international hub for FinTech innovation and I’ve been able to experience the ‘energy’ fist hand. So it’s with a tinge of envy that I congratulate Tel Aviv on becoming – rapidly – the third most significant hub for Retail Tech after Silicon Valley and New York City.
All great. But what does this mean for UK Retailers?
The UK retail sector is famously hungry for innovation. In today’s increasingly ruthless commercial environment brands must innovate or face being left behind. Israeli technology has deservedly made its name for providing the go-to platform for innovation.
One of the things that I personally find staggering is the breadth of application and focus these Israeli start-ups have proven. While we mustn’t forget security, it’s only one small part of where Israeli retail tech plays. From indoor mapping to loyalty, from warehouse to last-mile solutions, from smart shelves and digital signage to sensors and beacons, from IoT-assisted tech to bleeding-edge VR, from advanced analytics to next-gen personalisation … if you can imagine it, the chances are someone’s working on it in Israel.
The infographic below [IMAGE2] gives you some idea of the commanding breadth and ambition, with innovations in every area of retail.
With an imperative to drive differentiation and an appreciation of such how catastrophic it can be to be left behind, UK retailers increasingly want to be among the first movers.
Experience the innovation for yourself
For what we believe is a first, Retail in Detail (in association with the Retail Innovation Club) are bringing top UK retailers face-to-face with leading-edge Israeli retail technology in a dedicated – not to say unprecedented – one day event.
Retail Innovation Now is taking place at the Design Museum in London on Tuesday 24th September 2019. It brings together 15 of the top Israeli retail start-ups and puts them face to face with UK retailers looking for the tech that will give them the edge. We’re also planning to have some special guest speakers from the world of UK retail.
If you’re a retailer interested in attending (places are free but limited) please contact Natasha Richardson our Head of Events.
Nearer the event itself I’ll mark your card about some of the names to watch. For now I’ll leave you with the idea that Israeli retail tech is here to stay, and the sooner you get involved, the better.