Neighborhood Goods, a startup rethinking the traditional department store experience, is announcing that it has raised $5.75 million in seed funding.CEO Matt Alexander (who co-founded the company with Mark Masinter) told me via email that while the largely static layout and offerings of a department store provide a degree of consistency and reliability, theyre also dull and unchanging, as well as fairly transactional with little more to provide.So instead, Neighborhood Goods will allow around 15 brands to create their own activations, each highlighting the aesthetic and products that the brands choose.
(Bulletin is another startup looking to bring a pop-up approach to traditional retail.) The store will also have a restaurant and bar, and communal spaces that could be used for things like speaking events or art installations.At Neighborhood Goods, were creating something more social and communal around an ever-changing landscape of products, Alexander said, later adding, Neighborhood Goods ostensibly takes the polish and approachability of the typical department store, but combines it with the dynamism and community of a pop-up store or pop-up marketplace.He also said technology will play a big role in the experience particularly with an iOS app that will allow customers to learn more about the brands, text the staff, have products brought to them and make purchases.The funding was led by Forerunner Ventures, with participation from Maveron, CAA Ventures, Global Founders Capital, NextGen Venture Partners,Revolutions Rise of the Rest Seed Fund, Dollar Shave Club founder Michael Dubin and Retail Connection co-founder Alan P.
Shor (whos also joining the board of directors).Community and emotional connection are a big part of what drives consumer spending something Matt and Mark understand wholeheartedly, said Forerunners Kirsten Green in the funding announcement.
The delicate balance of both experience and discovery is reshaping the retail industry as shoppers crave brands that are unique and worth getting excited over.Neighborhood Goods plans to open its first location a 13,000-square-foot store in Plano, Texas this fall.
Asked why he chose Plano, Alexander said:Specifically, were able to tap into an aggressive consumer market, whilst bringing brands closer to exceptional customers.
And were able to do so without the brands having to invest exorbitant amounts, hiring extensive retail teams, or developing marketing initiatives from the ground-up in new markets Thats not to say we wont look at markets like LA, NY, and SF in future, but, as a launchpad for a new concept, Plano is uniquely good for us today.