Retailers Taking Control of Their Technology
There is a growing trend of non-tech acquirers participating in the technology M&A market as large traditional companies seek to own, rather than outsource, their technology resources. As the shopping experience moves increasingly into the digital space, retailers want more control over their interactions with customers. Recently these historically brick-and-mortar companies have been acquiring technology startups to bolster these capabilities rather than building them in house.
On March 25th, McDonald’s announced an agreement to acquire Dynamic Yield, a big data and machine learning startup, for a rumored $300 million (wired.com). The fast food giant is betting big on the Tel Aviv-based company that develops a machine learning engine, enabling marketers to increase revenue through personalization, recommendations, and automatic optimization. McDonald’s intends to leverage the Dynamic Yield’s expertise to overhaul their digital customer experience, providing a Netflix or Amazon-esque recommendation system.
Earlier in March, department store chain, Nordstrom made two acquisitions to improve the veteran retailer’s shopping experience with new technologies and tools. The first acquisition was BevyUp, which provides shoppers with cloud tools to help make purchase decisions. The second acquisition was MessageYes, a conversational commerce software company that will enhance Nordstrom’s ability to send personalized text messages to customers.
Earlier, during February of 2019, retail bellwether Walmart acquired application software provider Aspectiva. The company analyzes and visualizes user-generated content with product insights, boosting engagement, and confidence of online shoppers. The acquisition of the Israeli natural language processing startup is intended to improve and jumpstart the shopping experience for Walmart customers both on-and offline. Aspectiva will join Store No 8, Walmart’s in-house incubation arm.
Further notable acquisitions in the space include IKEA’s acquisition of the online and mobile marketplace TaskRabbit (terms undisclosed) and Target’sacquisition of same-day delivery platform Shipt ($550 million). M&A activity in the technology space coming from non-tech acquirers during early 2019 is reflective of the continually increasing hunger for technology outside the traditional industry buyer-group.