Monday, December 29, 2008

WalMart: real time retailisation

From O'Reilly.

WalMart is a better example of Enterprise 2.0 than any of these more trendy examples of user contribution systems. If Google's key innovation with PageRank was to recognize that a link was a vote, which could be counted and measured to get better search results, so too, WalMart recognized early on that a purchase was a vote. Each company built real-time information systems to capture and respond to that vote. WalMart built a supply chain in which goods are automatically re-ordered as they go out the door, with algorithms based on rate of sale controlling the reorders. Google built a better search engine, in which pages that were "better linked" were given priority over the ones produced by pure keyword matches. They went on to build real-time systems to measure what John Battelle called the database of intentions, as expressed by people's queries and subsequent clickstream data, as well as an ad auction system that prices ads in real-time based on the predicted likelihood of the ad being clicked on.


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