Nike buys analytics company Celect to enhance consumer engagements

Nike has acquired Boston-based predictive analytics company Celect as part of the strategy to enhance consumer engagements, CNBC reported.
Nike and digital transformation

Financial terms of the deal weren’t disclosed.

The predictive analytics company in December 2018 announced that it has raised $15 million in a series C funding round led by NGP Capital and existing investor Fung Capital. Previous investors Activant Capital and August Capital also participated. Celect previously raised $10 million in series B financing in February 2017, and $5.2 million in June 2015. Its funding to date stands at $30.2 million.

Nike will integrate Celect’s technology into Nike’s mobile apps and website to better predict what styles of sneakers and apparel customers want, when they want it and where they want to buy it from, Chief Operating Officer Eric Sprunk said.

Nike expects Celect to help reduce out-of-stock rates and run into fewer situations where demand of sneakers and apparel comes unplanned. This could also lead to less pressure on profit margins, if Nike can control inventories better and not have goods overflowing in warehouses that people aren’t buying.

Celect’s co-founders will continue working as tenured professors at Massachusetts Institute of Technology (MIT) and plan to consult with Nike as part of the deal. Celect, which was founded in 2013, will be integrated into Nike’s operations team, the company said.

In 2016, Nokia bought Virgin MEGA, a digital design studio based in New York and backed by Richard Branson’s Virgin Group, to help build out its SNKRS app, a commerce platform for shoes launched a year earlier.

In March last year, Nike acquired consumer data analytics firm Zodiac in a bid to speed its digital transformation, as its sales continued to shift online.

In April, Nokia announced its acquisition of computer-vision company Invertex, based in Tel Aviv, Israel. Invertex was ultimately behind the recent rollout of Nike Fit — a new 3D scanning feature within Nike’s mobile app that’s able to accurately predict what size shoes people should buy.

Nike hasn’t disclosed how much it spent on any of these deals.

Sales from Nike’s Direct business rose 12 percent on a currency-neutral basis to $10.4 billion in fiscal 2018 from $9.1 billion in fiscal 2017. Direct revenue now makes up about 30 percent of total Nike brand revenue, fuelled by online growth.