Gap Inc. acquires AI startup CB4 for better retail analytics

The startup examines point-of-sale (POS) data to uncover consumer demand patterns and identify stores that should be selling more of a specific item.

Gap Inc. on Monday announced it's acquiring the New York and Tel Aviv based startup Context-Based 4 Casting Ltd. (CB4), which uses AI and machine learningto 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, the CB4's algorithms learn more about the retailer and its potential problems. 

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"We believe artificial intelligence and machine learning will shape the future of our industry," Sally Gilligan, Gap's Chief Growth Transformation Officer and head of the Strategic Growth Office, said in a statement. "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."

Founded in 2014, CB4 has $26 million in funding from investors, including Sequoia Capital. Its technology has been implemented by retailers like Levi's, Urban Outfitters, Lidl and Ace Hardware.

CB4's more than 60 employees will join Gap Inc. as full-time employees as part of the acquisition.

Gap Inc. has increased its investments in technology since moving to the cloud in October 2020. Earlier this year, the company acquired Drapr, an e-commerce startup that powers 3D-fit technology and virtual fitting rooms. It also participated in the latest funding round for obé fitness, a digital fitness platform that partners with Gap Inc.'s Athleta Brand to bring entertainment, pop culture and design to fitness.