Red Sox ‘02 v The
Analytics have swept through Major League Baseball (MLB)
over the past 17 years. The Oakland A’s got first analytical results. But, the Boston
Red Sox were the first to go big in 2002. John Henry, the new owner, was a
believer. He had gotten rich by trading commodities with his own invented
Continue reading Baseball’s Adoption of Analytics v. Distributors
BIG CHANGES BY 2020+?
Big players (Amazon, Walmart, Home Depot, etc.) are
combining many technologies to create the onrushing Cloud Omnichannels to which
B2B brands must respond.
Amazon’s (AMZ) “doorstep-back-to-producers” value-channel is
all in the cloud. It incorporates technologies like AI, machine learning, robots,
and cobots. And, AMZ has already hugely pre-invested in exploiting 5G bandwidth,
instant-startup-clone brands, info-videos with watch-me reward points, last-mile-uber-metro-delivery
platforms, voice commerce, drones, fintech, blockchain, etc.
Continue reading 140. Channel-Model Innovations Ahead
LEVELS OF INNOVATION:
INCREMENTAL, BUSINESS-MODEL, CHANNEL-MODEL
All businesses innovate. But, rearranging the deck furniture
on the Titanic (an incremental innovation)
is not as powerful as getting an iceberg-resistant ship or an ice-berg-free
innovation is when you rethink the system of how you organize your
resources to create a breakthrough value for some target group of customers. You
may also, simultaneously, eliminate wasteful or dying activities. Common
phrasings: Weed to feed. Prune to grow. Downsize, Upgrade, Refocus and
Revitalize. Do a “Blue Ocean Strategy”, etc.
Continue reading 137. Amazon’s Channel-Model Innovation Challenge
PRICING EFFICIENCY ISN’T PRICING EFFECTIVENESS
Practice good-pricing hygiene. Don’t underprice SKUs or customers if they will continue to (happily) buy from you at higher prices. But, consider also the positive trade-off of lower prices in exchange for larger average order-size buying. What are your general buying and selling incentives for increasing order size?
CASE STUDY ON ORDER-SIZE ECONOMIES
For 2018, a $100MM contractor-supply distributor had roughly 4000 active accounts. More facts:
Continue reading 136. SELL WIN-WIN, LOWER PRICING (?)
AMAZON’S WAR ON CRaP
Amazon’s analytics can identity SKUs on which they “Can’t
Realize a Profit” (CRaP). Even with their improving, world’s best fulfillment
and last-mile delivery costs, they can’t cover costs on items lower than $15
AMZ’s fixes to date?
Continue reading 135. Fix Your CRaP Items and Their Root Causes
Lollapalooza Effect: (A Charlie Munger
term) When multiple cognitive biases reinforce one another within a group,
irrational beliefs will take over.
WITH SMALL CUSTOMERS WITH UNPROFITABLE, AVERAGE-ORDER SIZES
When distributors create a Cost-to-ServE (CTS) model to estimate
and rank customers by net-profitability, there are typically two, customer-group
Continue reading 134. The Small-Customer, Small-Order “Lollapalooza Effect”