Nike announces its acquisition of Celect aiming to
better predict shopping behaviour
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
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,
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.