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Gap Acquisition Tracks Trend of Retailers Bringing eCommerce Experiences Into Physical Stores

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Gap
Gap

With online sales outgrowing and steadily cannibalizing their in-store counterparts, it should come as no surprise to see retailers investing in efforts that will make their physical store experiences look and feel a lot more like their apps and websites.

In fact, that’s exactly what Gap, Inc. is doing via its acquisition of Context-Based 4 Casting Ltd. (CB4), a New York- and Tel Aviv-based startup whose recommendation technology is used to create more satisfying in-store interactions at a time when most stores are reimagining the experience.

In a statement announcing the deal, Sally Gilligan, Gap's chief growth transformation officer and head of the company’s strategic growth office, said, “We believe artificial intelligence and machine learning will shape the future of our industry. Gap Inc. has experience working with CB4’s world-class data scientists, so we understand the impact and the wide applications their science can have across sales, inventory and consumer insights, as well as its potential to unlock value and enhance the customer experience.”

Gap Inc., whose portfolio of retail brands includes Old Navy, Banana Republic and Athleta, has made a series of moves in 2021 to improve eCommerce operations. The CB4 acquisition aims squarely at the need for stores to deliver seamless online shopping delights in real life.

On the news, CB4 CEO Yoni Benshaul added that “CB4’s AI helps lift sales and enhance customer experiences. As we join Gap Inc., I’m excited to see how our team can drive even broader and deeper impact at the company’s global scale.”

CB4’s team will become Gap employees under terms of the acquisition. No price was disclosed.

See also: Gap Inc. Registers 49% Boost in Digital as Store Sales Drop

Blending the Best of Online and In-Store

Per its website, CB4 delivers “on-time, location-specific product-level recommendations each week at the speed stores need them to generate new revenue.” With more physical retailers seeking these insights as part of pandemic redesigns, it’s a timely move for Gap.

The move to improve the in-store experience is gaining momentum despite legions of shoppers continuing to embrace eCommerce. People want to shop in live settings, pandemic or not, but now expect the best part of their online experiences to be replicated in-store.

For example, The LEGO Group debuted its new store concept in New York a few months back, noting in a statement that the new interactive store format “is designed to create an immersive world of LEGO bricks by blending unique digital and physical experiences. It has been developed as part of the Group’s strategy to innovate its stores as shoppers seek more personalized and interactive retail offerings. Despite the rapid growth in eCommerce, brick-and-mortar stores continue to play a critical role in strengthening consumers’ connections with a brand and in helping people to discover new products.”

Other retailers are testing out similar concepts, melding the tactile and experiential elements of live shopping with the convenience and touchless reassurance of the pandemic era.

Read also: Retailers Turn to AI/ML to Align Physical Shelf Requirements With Digitally Derived Insights

Connected Consumers Want It All

Efforts of store-centric brands to elevate live retailing even among impressive eCommerce numbers are showing up more now, as research shows that over half of highly connected consumers continue purchasing retail products in physical stores through the pandemic.

Even Big Tech sees the possibilities, with PYMNTS recently reporting that “among other companies bullish on the in-store shopping experience is Apple, which reportedly is doubling down on its pre-pandemic strategy of hosting in-store events and experiences other than shopping.”

Read more: Optimism for Re-Imagined Brick-and-Mortar Rises From High-End Retail to Final Mile

The National Retail Federation (NRF) has been talking up the trend ahead of its annual trade show slated for January 16-18, 2022, at New York’s Javits Center.

A recent NRF blog post used Neiman Marcus Group as an example, noting that “AI, analytics and machine learning play key roles in helping the company build long-term relationships with its customers, and adding that “sales associates in stores feel empowered with better insights and a better understanding of their customers’ needs that AI and ML are providing.”

See also: How Consumers Live in the Connected Economy