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20

Chapter 2: The Platform Revolution is here

Moving from the Pipeline Model In the pipeline model, there is a flow of margin through the

value chain wherein each player in the chain takes a piece. At

the end of the value chain is the customer, who pays the full

margin. Information about that customer flows back only ot

the entity at the end of the value chain, facing the customer.

In a pipeline model, there are two priorities that have always

been the same. For a retailer, the priority is to buy low, sell

high. All the marketing, the customer experience, and the

loyalty programs only work if, at the beginning, the retailer is

able to buy low, and sell high.

The priority for brands - such as a company like Decathlon

in France - is on brand/product innovation. The goal of

innovation is to create more margin (more value that customers

are willing to pay for) to flow through the value chain.

SOURCING CATEGORY MANAGEMENT

EXECUTION

MARGIN

CUSTOMERS

the Pipeline model