Consumers are more demanding and specific with the products they buy. Retailers of all kinds are under pressure to get a better grasp of shopper behavior, so they can tailor their marketing strategies and inventories to meet evolving consumer needs. In order to do this, companies are investing in technology, including data and analytics providers, snatching targets in those fields through M&A.
One prime example is Nike Inc. (NYSE: NKE), which has bolstered its digital capabilities with the acquisition of Invertex Ltd. of Tel Aviv. Invertex uses 3-D technology and mobile applications to analyze consumer buying behavior, aiming to provide retailers with information to customize products to meet specific customer needs. Invertex’s imaging technology can be used to analyze people’s feet in stores to suggest models and sizes that would fit them best.
Invertex is not NIke’s only technology acquisition. The Beaverton, Oregon-based company bought consumer data analytics firm Zodiac Inc. “The acquisition of Zodiac demonstrates our commitment to further accelerating Nike’s digital transformation and enhancing our consumer data and analytics capabilities to help us serve consumers globally,” says Nike chief digital officer Adam Sussman.
Based in Philadelphia and New York, Zodiac uses “proven data models, customer analytics, and behavioral analysis to predict the future behaviors of individuals.” “What really powers all these immersive consumer experiences is great data and the ability to maximize. And while we’re constantly building these skills in-house we’re also acquiring capabilities to accelerate our strategy,” Nike CEO Mark Parker told investors.
Both strategic and private equity buyers are going after analytics firms to monitor consumer behavior and help with their digital strategies. For example, in 2017, the Carlyle Group LP (Nasdaq: CG) acquired consumer data provider Claritas from Nielsen (NYSE: NLSN). New York-based Claritas, founded in 1961, provides consumer data and demographics, including where people work, live and shop, to help businesses better directly market to those clients.
On the strategic side, in 2016, security company Tyco International plc (NYSE: TYC) purchased ShopperTrak for $175 million. The Chicago-based target measures customer traffic as well as other consumer behavior for retailers, including Crate and Barrel and Harry & David.