Market Experimentation

It is abundantly clear from the industry leader practices that a key aspect of success is the practice of experimentation. This practice has become necessary to confirm demands of the consumer and other partners within the extended supply chain. Data and analytics will take you so far in responding to the demands of the marketplace and then the final clarification and confirmation requires experimentation as part of the continuous improvement process. In fact, the experimentation is a critical piece of the continuous improvement process and these leaders in industry are extending the continuous improvement practice to the the business decision process. This is an important factor in the ability to sense and respond to changing demands, the reaction to change must utilize the continuous improvement process to test validity of process and change in meeting the market demands.




The growth and importance of experimentation in clarification and implementation of change is a reaction to both the velocity of change and the almost overwhelming cost of bad decisions in the model of increased velocity of change. There are really two factors involved in the increase in experimentation:


The velocity of change and the amount of data available to help the market to sense and respond to change is increasing. First the velocity of change has reached a tempo of discontinuous velocity that requires continuous evaluation and re-evaluation. While the volume of data available has increased exponentially with the growth of omni channel commerce the analytics can take you so far and then the final steps require a series of trial and error experiments.


The cost of change has increased to a level that almost prohibits very large change. This means that the change must be coordinated and executed in steps that allow for validation and corrections prior as part of the change delivery cycle.

These are important factors to encourage and expand the level of experimentation.




When the market partners reach of level of capabilities to segregate the back office planning and forecasting and financial systems from the customer and partner facing capabilities to allow for change in the customer and partner facing applications to be implemented efficiently and without significant change to the back office operations then the model of experimentation can really take the center stage. This takes significant investment from the retailers and an especially large investment from the larger retailers. Unfortunately for the retailers, they must perform both activities at the same time in order to continue to succeed. Amazon and Google both excel at these activities as they have built the foundation with the concept of integration and segregation to reduce effort and impact of change on their back office and both us experimentation as a foundation function in their activities.




One of the lasting effects from Amazon is their practice of experimentation and willingness to drop a concept when it does not succeed. This impact of this practice is the market of discontinuous change and increased velocity of change. Others must also embrace this practice now in order to survive and this can be very tough for the large retailers. The initial reaction was to acquire operational capabilities and now these retailers much change their culture and framework to support quick an iterative change to react to the demands of the market.