Nike has announced that it has purchased predictive analytics company Celect which will help the company boost its direct-to-consumer strategy and “serve consumers more personally at scale.”
The company was founded by MIT professors Devavrat Shah and Vivek Farias back in 2013 and gives retailers the ability to both predict and meet inventory needs thanks to its AI-driven analytics platform. According to Celect, what it does is that it increases “full-price sell-through, reduce out-of-stocks and decreases markdowns.”
“With the acquisition of Celect, Nike greatly accelerates our digital advantage by adding a platform developed by world-class data scientists.” Eric Sprunk, Chief Operating Officer for Nike said in a press release. “As demand for our product grows, we must be insight-driven, data optimized and hyper-focused on consumer behavior. This is how we serve consumers more personally at scale.”
Celect will slowly start to be embedded into the Nike global operations team and its founders, while they will continue their work as MIT, will also consult with the company when needed.
It’s not hard to imagine why Nike would feel the need to introduce this type of platform into its business: online shopping has seen a massive increase in the past couple of years and, considering Nike’s sneakers, especially the limited edition ones are in high demand, the company will want to make sure it can anticipate that demand.
Nike’s full-year revenue last year was already up by 7%, rounding up profits of $39.1 billion and it’s worth mentioning that it was just at the beginning of 2019 that it had also acquired a 3D scanning company and data analytics startup Zodiac. Both of these companies too, were aimed at helping it with the direct-to-consumer business.
It’s not something Nike just decided to do out of the blue though: the company got in the habit of buying other brands and tech companies in order to strengthen both its design as well as its data analysis capabilities: back in 2002 it purchased surfwear brand Hurley while in 2003 it also brought Converse to its ranks.