Celect To Help Retailers Understand Consumers With $5 Million In Funding
By Christine Kern, contributing writer
Algorithms help retailers understand customers’ buying patterns
Boston-based machine-learning analytics firm Celect has announced that it has garnered $5 million in Series A funding led by August Capital with participation by Activant Capital Group.
The funding will be used to expand its existing management and development teams and open expanded headquarters in Boston’s Innovation District.
According to the release, the company was founded by MIT professors Vivek Farias and Devavrat Shah, and “uses a fundamental technological breakthrough in machine learning, which allows retailers to truly understand their customers’ buying patterns.” The technology allows retailers, merchandizers, and inventory analysts to ‘create optimized and localized product assortments, and in turn, increase inventory turnover and revenue while fostering a better customer experience.”
Using a model called “choice modeling,” Celect studies the science of how consumers make decisions, according to Xconomy.
Celect also announced that a new pilot of the technology with Bon-Ton Stores, Inc., which has 270 locations across the U.S., demonstrated positive increases in in-store revenue over the control group.
“Celect is fundamentally changing how some of the world’s largest retailers stock their shelves,” explained Vivek Mehra, General Partner at August Capital, who joins Celect’s Board of Directors. “The underlying technology powering Celect is capable of revolutionizing the retail industry and August is thrilled to be an early supporter.”
Celect says it can help retailers boost online sales by 20 percent and in-store sales by 7 percent through its analysis of transactions with customers and its determination of a retailer’s optimal merchandise assortment, Venture Beat reported.
Retailers are looking to leverage predictive analytics to make better informed merchandising and planning decisions,” said Steve Sarracino, Founder and Partner at Activant Capital. “Celect’s technology, centered on choice modeling, provides retailers with completely unique insights to help them do just that. The Celect team has deep business and technology experience and we’re excited to help bring their cutting edge solution to a broader market.”
“We’re excited to work with investors that operate at the intersection of retail and technology,” said John Andrews, CEO of Celect. “Every retailer we speak with is looking to add the support of deep science to the art of retailing, and this new funding allows us to further build out our team to assist retailers in this rapidly evolving and competitive omni-channel commerce market.”
This technology represents the new wave in analytics, which some call “lean retail,” able to dig more deeply into a retailer's information to come up with more meaningful and more useful results. If successful, the new technology could help retailers avoid over-stocking or running out of merchandise by garnering real-time information on customers opinions regarding trendy and cool objects and fashion.