Nike is once again turning to outside help to accelerate its ambitious digital transformation initiatives. The Oregon athleticwear and footwear giant has acquired Datalogue, a data integration platform startup, for an undisclosed sum.
Co-founded by CEO Tim Delisle and former chief operating officer Bryan Russett in 2016, Datalogue has built proprietary machine learning technology designed to automate the data preparation and integration processes.
With this acquisition, Nike says it will be able to integrate data from all sources—including app, supply chain and enterprise data—in one accessible and standardized platform. The platform is designed so that regardless of technical know-how, cross-functional teams can be self-sufficient in gathering relevant data across the enterprise.
For example, Nike would be able to leverage the centralized data to create real-time dashboards and predictive models, pull data from product databases and IoT systems to automate routine maintenance and get ahead of outages or even gain real-time visibility on inventory by synchronizing data from digital devices like Wi-Fi access points or application databases.
Upon completion of the acquisition, Datalogue’s team will be integrated into Nike’s global technology organization.
The Datalogue deal is the latest in a succession of acquisitions by Nike to feed its digital-first, direct-to-consumer strategies and get out in front of shifting shopper behavior. In an 18-month span from March 2018 to August 2019, Nike acquired three data-science-related startups: data and analytics company Zodiac, Israeli computer vision and footwear fit technology Invertex, and most recently predictive analytics and demand sensing software provider Celect.
The acquisitions have been successful for Nike’s larger company pivot thus far. Invertex ended up being the technology behind the athleticwear giant’s Nike Fit sizing app experience, while Nike management credited Celect’s technology for helping drive 100 percent year-over-year digital revenue growth in North America in the second quarter, while lowering digital fulfillment costs per unit.
In particular, Nike’s new regional service center in Los Angeles was ramped up to serve peak holiday demand ahead of the season, executive vice president and chief financial officer Matt Friend noted in a December earnings call. The L.A. center went live in September and uses predictive modeling from Celect to anticipate consumer demand and ensure the product is available and will arrive within one to two days.
“We’re investing in technology in the supply chain, so that we can better predict where to put inventory, where we think consumers want the inventory, and the benefits for us in that are in gross margin,” Friend told analysts. “It’s more full-price realization, it’s lower cost to fulfill, and frankly, it’s better for the environment because it’s less shipping and it’s less moving stuff around so it’s better.”
The three deals came with prescient timing for Nike, given that they all occurred ahead of the onset of the Covid-19 pandemic, enabling the athletic titan to nimbly pivot its digital strategy during months of disruption.
In June 2020, as the company sought to bounce back from the impacts of the pandemic, which led to $790 million in total losses for its fourth quarter, Nike unveiled that it was taking its “Consumer Direct Offense” to new heights, replacing the strategy with an even more determined “Consumer Direct Acceleration” (CDA).
This push came as Nike already surpassed its goal to reach 30 percent digital penetration by 2023 once the Covid pandemic pushed more shoppers online. Under the CDA, Nike set the bar even higher by outlining a new goal of 50 percent online penetration of total sales.
In the most recent quarter, Nike brand digital sales increased 84 percent, marking the third-straight quarter the company has reported roughly 80 percent increases in sales originating online.
“Our CDA strategy focuses on accelerating how we connect with consumers to better serve them personally at scale,” John Donahoe, president and CEO of Nike, said in a statement. “The acquisition of Datalogue builds on our digital momentum by enhancing our ability to transform raw data into actionable insights in real time and across the enterprise.”