Thoughts On A Retailer Purchasing A Software Startup
Neiman Marcus acquired a technology company Stylyze.
The big problem is that these sorts of technology acquisitions don't work out well for anyone but the largest retailers, because the scale is not large enough to make a difference.
The only words you need to understand in this acquisition are "terms were not disclosed."
Overall, Stylyze had only raised about $3M or so several years back. Likely Neiman is one of their largest customers and was approached in a fundraising round.
It's possible Stylyze was having trouble raising money, although that strains credibility in this environment. For the Stylyze team, it's a great exit, particularly if they want a new challenge.
For Neiman, ensuring that these investments actually deliver on the promise is more difficult. This kind of personalization/merchandising technology is notoriously difficult to prove the value on, and once it's in-house - guess what?
It's essentially custom software - it is no longer "off-the-shelf software." Given the fact that most retailers struggle to innovate with software, that can be a challenge. Are there any other challenges that Neiman should be looking out for?
Keep in mind - Neiman Marcus is not Target, Walmart, or Amazon. Its IT infrastructure is likely much smaller.
