Tipping Point in the Retail Industry
In today’s retail industry, the value of data has grown to become a dominating characteristic. Companies such as Amazon, Netflix, Nordstrom, and Target are using predictive analytics to make product selections. The article states that, “the days of relying solely on historical data and personal intuition to make product decisions are gone — assuming you want to be successful in the future”. The real tipping point isn’t about if companies are using data and analytics, but refers to when and where companies are using the proper data and analytics. Historically, business’s utilized data after a season’s sales cycle to evaluate how products worked with costumers. A superior way of using data in today’s market is to engage customers before the product launches. This process is the true “tipping point” in the modern retail industry. The three key benefits of applying the true tipping point are: building loyalty with customers by recognizing their input, getting customer feedback on a product that has no sales history, and maximizing the revenue potential for investors by launching the right products at the right value.
In class we learned about Network Effect Equilibria and the Tipping Point. The article demonstrates a real world application of the tipping point in the retail industry. Although we are able to calculate the tipping point of a product, the article offers more insight into real world benefits of utilizing data and analytics properly. Besides the success of a product, companies can build customer loyalty, acquire costumer feedback, and maximize revenue by implementing the real tipping point.
https://www.forbes.com/sites/gregpetro/2015/07/07/the-retail-tipping-point/#5ab2f9aa6617