CHAPTER THREE
The Expert Squeeze
Why Netflix Knows More Than Clerks Do About Your Favorite Films
ACCURATELY PROJECTING HOLIDAY SALES is a crucial task for retailers. A forecast that is too low leaves shelves bare and profits lost, while too much optimism leads to dusty inventory and pressure on profit margins. So retailers have a great incentive to come up with a precise sales estimate. To do so, most merchants rely on experts—individuals in the organization who gather information, study trends, and make predictions.
The stakes are especially high for consumer electronics firms because they generate so much of their revenue during the gift-giving season and the value of their inventory depreciates rapidly. The pressure is really on the internal ...
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