Sports retailers Nike, Foot Locker, buy digital startups to help customize sneakers
The way consumers shop continues to change. Customers want to put their own touch on products, not wait too long for them and in most cases, never step foot in a store to buy them. Apparel and sneaker retailers, such as Foot Locker (NYSE: FL) and Nike Inc. (NYSE: NKE), are embracing these challenges by snatching up companies that can provide customized products to customers, and advancing digital capabilities to businesses.
In 2018, Foot Locker Inc. acquired a minority stake in children’s apparel company Rockets of Awesome for $12.5 million. The target simplifies the way parents shop by delivering high-quality, on-trend, handpicked pieces directly to customers. The investment is part of Foot Locker’s strategy to diversify its customers and products offerings.
“Rockets of Awesome is advancing the way parents shop for their kids and Foot Locker is committed to evolving with the ever-changing retail landscape and adjusting to the speed of our customers,” said Richard Johnson, Foot Locker CEO, when the deal was announced.
Foot Locker is also buying a minority stake in secondary sneaker retailer Goat Group for $100 million. The investment will expand Goat’s online and brick-and-mortar presence, while it grows its global operations. The target operates under the Goat and Flight Club brands.
“At Foot Locker we are constantly looking at new ways to elevate our customer experience and bring sneaker and youth culture to people around the world,” Johnson says. “Together, Foot Locker and Goat Group’s shared commitment to trust and authenticity in the sneaker industry will provide consumers with unparalleled experiences and diversified offerings.” Goat and Rockets of Awesome follow a recent string of investments for Foot Locker including: women’s luxury activewear brand Carbon38, children’s lifestyle brand Super Heroic and footwear design academy Pensole.
Nike is also making deals that will help the company cater to the next wave of shoppers. Nike has bolstered its digital capabilities with the acquisition of Invertex Ltd. The target uses 3D technology and mobile applications to analyze consumer buying behavior, aiming to provide retailers with information to customize products to meet specific customer needs. Among its offerings, Invertex uses an in-store mat that shoppers stand on to get precise measurements to help them choose shoes that fit. “The acquisition of Invertex will deepen our bench of digital talent and further our capabilities in computer vision and artificial intelligence, as we create the most compelling Nike consumer experience at every touchpoint,” says Adam Sussman, Nike’s chief digital officer. Nike won Mergers & Acquisitions’ 2019 Strategic Buyer of the Year for Zodiac and Invertex.