by Scott Denne
The retail industry has adopted machine learning at a faster rate than other verticals, which has led to an uptick of M&A. Home improvement retailer Lowe’s is the latest to make a deal with the purchase of Boomerang Commerce’s retail analytics technology assets. Although this transaction extends that trend, the acquirer departs from its peers in buying machine learning for applications beyond customer engagement.
Like many industries, retail has not yet moved past the early stages of adopting machine learning, although it’s further up the curve. According to 451 Research’s Voice of the Enterprise: Artificial Intelligence & Machine Learning, Adoption and Use Cases, 49% of companies in retail are running, at a minimum, a machine learning proof of concept, compared with just 40% across all verticals. Retailers and the tech firms that sell to them have acquired nine machine learning providers since the start of the year, just one fewer than all of last year, according to 451 Research’s M&A KnowledgeBase.
Acquisitions of technologies and products that aim to improve customer experience through new offerings, recommendations or analytics have accounted for nearly all of that deal flow this year. McDonald’s, for example, nabbed Dynamic Yield for personalization technology, while Walmart picked up Aspectiva to make product recommendations from customer reviews.
Those rationales align with retailer priorities in our machine learning survey, where 45% of retailers said ‘customer engagement’ was among their current use cases for machine learning. And although the rationale for Lowe’s purchase – pricing optimization and demand prediction – hasn’t driven as many transactions, it’s not far behind in the survey, as 37% highlighted that application.