Announcing Drop’s Acquisition of Canopy Labs
Today we’re excited to announce Drop’s acquisition of Canopy Labs. This partnership signals our foray into the exciting world of machine learning and artificial intelligence; it will provide us with a massive head start on where we want to be over the next few years. More specifically, the acquisition of Canopy Labs fits well within our view of a few seismic shifts that will change the way consumers and brands will interact in the not-so-distance future:
We are experiencing a generational shift in consumer intelligence
In 2017, the economist published an article which advocated that data is the new oil. It’s also no longer a secret that platforms we use daily, like Facebook and Instagram, are leveraging our data to build up their customer intelligence capabilities. The level of customer intelligence that marketers have on an every day consumer is evolving rapidly. In the age of the empowered consumer, we believe that strong customer intelligence not only informs, but guides and advises leaders as they make real-world business decisions in real time. Platforms like Google allowed marketers to target based on how we spend our thoughts; platforms like Facebook target based on how we spend our time; the next generation of platforms will target based on how we spend our money. At Drop, we have a growing set of transactional data across customer wallets and we’ve been applying machine learning to that data to advance customer intelligence.
The survival of retailers and brands will be significantly influenced by how sophisticated they leverage data
It’s predicted that global retail spending on artificial intelligence will grow to $7.3 billion per year by 2022. In the coming years, retailers and marketers will spend heavily on AI tools that will enable them to differentiate and improve both the products and services they offer customers. We believe that a big part of this tool kit will include leveraging automated marketing platforms that generate tailored and timely offers. Against the backdrop of retailer bankruptcy and uncertainty, we believe that the iconic retailers and brands that will survive into the next decade will be the ones that can truly leverage intelligent data to compete against tech-first behemoths like Amazon. Drop will productize machine learning and make accessible advanced data techniques across marketing efforts.
The increasing specificity of targeted marketing is a massive opportunity
Over the last 50 years, marketing has evolved tremendously. We started in the world of mass marketing — TV, radio, billboards. Then with the advent of the internet, marketing became more specific and began to target based on intent — what you’re clicking, what you’re watching, even what you’re searching. We believe that the next evolution of marketing will revolve around payments — where you’re spending and where companies think you may want to spend. This form of marketing, also known as 1-to-1 marketing, will completely revolutionize the world of advertising; we just don’t know it yet. At Drop, we call it payments marketing.
Payment-based marketing is becoming more main stream
In 2017, I came across the first marketer with the title of “Payments Marketing Manager”. She didn’t work at a small company, but rather at one of the largest grocers in America. Marketing and payments might seem like rather odd bedfellows to the average retailer or marketer, but we believe that they are converging rapidly to bring more value to consumers and merchants alike. In a world where consumers are sharing data more openly than ever before, we believe that this shift coupled with marketers’ need to target more effectively and decrease advertising waste, will drive the ultimate collision of both payments and marketing. And we believe that this will create a new multi-billion dollar channel that didn’t exist before.
With all this in mind, we are very excited to welcome the Canopy Labs team to the Drop family. At the intersection of our vision on the future of payments and marketing is data; but not just data in its raw form, but cleansed, contextualized, and machine-learned data that leads to intelligent and efficient targeting. We are fast becoming experts at deeply leveraging our massive set of data and applying machine learning to deliver material business impact and are excited for the Canopy family to be a big part of it!
You can read the official press release here.