Gap Inc. announced earlier this week that it's acquiring the New York- and Tel Aviv-based startup Context-Based 4 Casting (CB4), which uses artificial intelligence (AI) to identify patterns in retail data and identify ways to improve in-store sales. The terms of the deal were not disclosed. CB4's software examines point-of-sale (POS) data to uncover consumer demand patterns and identify stores that should be selling more of a specific item. It then sends managers a list of likely causes, such as misplaced products. As store managers select issues they found, CB4's algorithms learn more about the retailer and its potential problems.
Total Retail's Take: Many have voiced the opinion that the future of the retail industry is dependent upon AI. If that is the case, Gap Inc. is making a wise investment in its future. Gap is aggressively investing in technology as it seeks to grow and diversify its business beyond its well-known retail outposts. For example, the company acquired Drapr, an e-commerce startup that powers 3D-fit technology and virtual fitting rooms, in August. Gap Inc. also participated in the latest funding round for obé fitness, a digital fitness platform that partners with the company's Athleta brand to bring entertainment, pop culture and design to fitness. The bottom line is that technologies such as AI and machine learning, which power the personalized shopping experiences that today's consumers crave, will be critical to the future success of any retail organization. Gap Inc. recognizes that and is willing to pay the price now to hopefully ensure future prosperity.