by Apparel Resources News-Desk
07-August-2019 | 2 mins read
Nike announces acquisition of US-based predictive analytics company Celect to strengthen its direct-to-customer strategy.
Nike mobile apps and websites will be integrated with Celect technology that will help the brand in predicting their customers buying behaviour.
The company will get better detailed insights into what style of sneakers and apparels are they liking, when and where they prefer to buy it from. “Our goal is to serve consumers more personally at scale. We have to anticipate demand. We don’t have six months to do it. We have 30 minutes,” said Eric Sprunk, Chief Operating Officer, Nike.
Celect will be immediately integrated into Nike’s global operations team while Celect’s co-founders will continue working as tenured professors at the Massachusetts Institute of Technology and plan to consult with Nike on an ongoing basis as a part of the deal.
“It’s really difficult work predicting the retail shopping patterns and behavior. This [acquisition] gets us much more accelerated. Therefore, Nike opted to acquire Celect versus “spending two to three years” trying to incubate the same platform in-house, said Sprunk.
Furthermore, the brand aims to reduce out-of-stock rate while maintaining their inventories and eliminating any case of goods overflowing in warehouse that customers are not purchasing.
“The paradigm of how inventory is planned must change. It’s always been, when a wholesaler places an order from Nike, that ‘signals demand’. But the customer needs to become the ultimate demand signal today, ” said Sprunk.
The agenda here clarifies that the brand is trying to sell more directly to the customers, shifting a bigger portion of its business away from wholesale channels. Sales from Nike’s direct business rose 12 per cent on a currency-neutral basis to US $ 10.4 billion in fiscal 2018 from US $ 9.1 billion in fiscal 2017, according to SEC filings. Direct revenue now makes up about 30 per cent of total Nike brand revenue, the company said, fueled by online growth.
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