The Grand Problems & Opportunities | Retail & eCommerce Edition

This post originally appeared on The SandHill Newsletter here. It is Part 1 of a 3 part series – Part 2 and Part 3 are linked here.

One of the primary goals of this newsletter is to spotlight some of the big opportunity areas emerging across markets.

Until now, we’ve done this primarily through the weekly digest (which you can still expect every Sunday). Going forward, we’ll also share occasional posts pulling in insights from top investors and industry insiders on big problems and opportunities they see across areas they focus.

In this first installment, we’re focusing on the Retail (and eCommerce) space, drawing from the wisdom of over a dozen top investors and operators. I’m especially excited about this one since its a space we focus heavily on at Equal Ventures, and we’re eager—along with the experts featured here—to see more startups tackling these challenges.

This post is very much the result of a “breadth-first search”: we’ll highlight a wide range of opportunities at a higher level. Founders and investors can go down a deeper rabbit hole to uncover potential strategies and solutions that could be best suited for any of these areas.

This collection isn’t exhaustive— it’s a starting point. If you see an angle we’ve missed or an area you think is worth exploring, drop a comment below!

Since this is the first post in this initiative, I’d love to get your feedback. If you have suggestions or requests for future topics, just reply to this email or drop a comment.

Without further ado, here are some of the major problem and opportunity areas we believe builders should keep on their radar.

A huge thank you to Marshall Porter (GP at AlleyCorp; ex-US CEO at Gympass, CSO at ShopRunner), Tehmina Haider (Partner at L Catterton; ex-Chief Growth Officer at Harry’s), Adrian Alfieri (CEO at Verbatim; Angel), Alex Malamatinas (Founder of Melitas Ventures), Brian Sugar (MP @ Sugar Capital; Founder of POPSUGAR), Chaz Flexman (CEO at Starday Foods, Angel), Chelsea Zhang (Principal at Equal Ventures), Jodi Kessler (Venture Partner at 3L Capital), Jordan Buckner (Founder of Foodbevy & Joyful Co.), Qasim Mohammad (Director at Wittington Ventures), Sib Mahapatra (CPO at Branch; Angel), Simran Suri (Investor at Maveron), Sophia Dodd (Investor at Equal Ventures), and Yuriy Dovzhansky (Partner at Visible Ventures).

Solve the Massive Industry Problems

1 – Excess Inventory & Demand Planning

Excess inventory is a significant challenge across the retail sector. In the fashion segment alone, an estimated 2.5-5 billion items of excess stock are produced annually, representing $70-$140B in unsold stock. This problem extends across all retail categories. Surplus stock ties up cash, increases storage costs, and leads to heavy discounting – eroding profitability.