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.
the Pipeline model