Strategy

You’ve raised prices – now what?: Raconteur speaks to Dr Xinrong Zhu about companies passing rising costs onto consumers

Evie Burrows-Taylor — Mon, 03 Feb 2025 10:02:14 +0000

You’ve raised prices – now what?: Raconteur speaks to Dr Xinrong Zhu about companies passing rising costs onto consumers Evie Burrows-Taylor Mon, 03/02/2025 - 10:02

28 January 2025

Professor Eddie Anderson on overcoming the risk and uncertainty of the energy sector

Shamita Harsh — Fri, 31 Jan 2025 10:53:04 +0000

Professor Eddie Anderson on overcoming the risk and uncertainty of the energy sector

Shamita Harsh Fri, 31/01/2025 - 10:53

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Who decided what ambition looks like?

A passion for mathematical analysis in energy

"The management of risk and uncertainty is often hampered by a belief that we know things we don't, and the long-term nature of this sector makes accurate forward planning particularly difficult," he explains.

Professor Anderson's research focuses on supply chain management, risk mitigation, and decision-making in an industry where uncertainty is a constant challenge. "Uncertainty is something all businesses face, particularly when it comes to developing future strategies and setting targets. And nowhere is this more challenging than in the energy sector, where so many domestic and global variables are at play,” he explains.

At Imperial, he teaches Energy Analytics and has published three books along with approximately 70 academic papers, further solidifying his impact on the field.

Managing risk in energy markets

One of the biggest challenges in energy economics is the unpredictability of pricing and demand. Professor Anderson highlights the dangers of overconfidence in predictions and reliance on technology without accounting that can bring high levels of future uncertainty. Political factors, unexpected global events like a pandemic or global conflict, and the risk of inaccurate predictions, known as "deep uncertainties “, further complicate forecasting.

"A mathematical analysis can help to manage these high levels of uncertainty and risk, and is essential in developing effective business strategies," he says.

It's a time-consuming exercise to flesh out a wide range of different scenarios, play with the variables, and identify what this means in terms of future strategy. But it's absolutely necessary, and by thinking outside the box, Professor Anderson says, we can minimise the danger of getting it wrong. This is crucial in a sector like energy, which is at the heart of all our lives and relies so heavily on long-term planning.

The challenge of predicting energy markets

The transition to renewable energy presents new challenges but in some ways we have been successful. While solar and wind technologies have become more cost-effective, we are committed to the goal of achieving net-zero emissions by 2050, a target which now looks increasingly unachievable.

Professor Anderson points out that carbon capture has not developed as expected, and renewables still struggle with supply-demand mismatches. Hydrogen has a role to play, particularly as a route to the decarbonisation of industrial processes, but the large amounts of energy storage that we need to address the supply-demand challenge are still problematic and very costly.

Price and demand

Price and demand are the two key variables in any business – and price in the energy sector is very difficult to predict or control. None of the various options available for a decarbonised energy system have prices that we can confidently predict ten years from now – and the demand side of the equation is also highly uncertain.

As we move away from natural gas for heating and petrol for transport, the demand for electricity will increase dramatically, but we are struggling to anticipate by how much, and how quickly, this will happen, he says. One alternative to the more traditional methodology of probability is the concept of "Least Worse Regret" or "Minimax Regret". This looks at past decisions with the benefit of hindsight, tests the outcome of different policies and strategies across a broad a range of scenarios, and attributes a tangible value to the difference or "regret".

"As a result of the energy transition to net zero, we are facing enormous uncertainties, some of which we can't easily put probabilities on, nor does it make any sense to do so," says Professor Anderson. "It means we need to find ways of planning to deal with that."

Exerting influence over energy demand

Professor Anderson emphasises that managing energy demand will require a combination of strategies.

"These might comprise 'smart' technology to control when energy is drawn down, pricing incentives and disincentives to lower demand at times of minimal supply, cost-effective energy storage, and ways to lower our overall energy demands – through better insulated buildings for example. It will take more than one of these developments to change the dynamics in this sector."

Professor Anderson wants to improve the way we look at energy going forwards: "This sector is a unique global ecosystem. It's in our nature as humans to be storytellers, but this sometimes comes with a confidence that simply isn't realistic.

"In the race to transition to net zero by 2050, it's vital that we acknowledge the things we don’t know and make use of analytical methodologies in creative ways to manage a very uncertain future."

During his career, Professor Anderson has held Faculty positions at Cambridge, the University of New South Wales, and the University of Sydney. Through his research and teaching, Eddie Anderson continues to influence the energy sector, shaping the way businesses and policymakers approach risk and uncertainty in an evolving global landscape.

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Professor Eddie Anderson tells us why a creative approach to analytics is crucial to managing the energy sector.

Professor Eddie Anderson Professor of Analytics and Operations Management Department of Analytics, Marketing and Operations - Imperial Business School

4 minute read

Swatch: 8 actionable lessons from a pioneering brand

Omar Merlo — Wed, 15 Jan 2025 12:14:02 +0000

Swatch: 8 actionable lessons from a pioneering brand

Omar Merlo Wed, 15/01/2025 - 12:14

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27 October 2025

Gen Z may not have the same memories of Swatch that Baby Boomers or Gen X have, but the brand remains a gold standard in entrepreneurship, marketing and leadership. It saved an entire industry in its Swiss homeland and has had a lasting impact on the global watch market.

To ensure these lessons are not lost in the past, I have had the privilege of collaborating with a key member of the brand's original team and its first marketing director, Dr Konstantin Theile. Our book The Dawn of Swatch: Timeless Strategies in Business, Marketing, and Entrepreneurship, reveals lessons that are just as valuable for business leaders today as they were over four decades ago.

Swatch's success offers many lessons – here are just eight of the most actionable for today’s marketers, leaders and entrepreneurs.

1. Flip weaknesses into assets. Swatch was born from an industry on its knees and desperately needing to make a step-change to survive. Cue a small visionary core team of the right people at the right time. It was their perceived weaknesses — youth, naivety and irreverence — that freed them to spurn the established Swiss watch experts and turn the industry on its head. This led them to conceive an injection-moulded, non-repairable, affordable fashion accessory that just happened to tell the time.

2. Marketing can be frugal. In the early days of Swatch, budgets were tiny, and the marketing team became pioneers of guerilla marketing before the phrase was even coined. A 500ft Swatch suspended from the front of the Commerzbank building in Frankfurt would be pretty radical even by today's standards. In 1984, funded largely by the bank itself (persuaded by the potential halo benefits of the Swatch brand), it generated a huge amount of publicity for Swatch in a crucial European market.

3. Think brand experience, not product. The first prototypes (branded Delirium Vulgaris rather than Swatch) were technically impressive but commercially unsellable. The marketing team soon realised that success would hinge on more than engineering; they needed an engaging brand name and story to capture consumers’ imagination. By positioning Swatch as an affordable fashion accessory, they gave customers a reason to buy not just one but several. Their edgy tongue-in-cheek campaigns turned each watch into a statement of individuality.

4. Harness the power of serendipity. While your chance of winning the lottery is in the hands of fate, you do have to be in it to win it. By creating an environment that allows for opportunity and a willingness to take risks, business leaders can create their own luck. For example, when Swatch was struggling to break into the American market, Konstantin's persistence and a fortuitous meeting with a watch buyer named Heidi (a fitting name for a Swiss success story) gave him the opening he needed.

5. Customers may not identify their needs. When it comes to innovation, traditional market research has its limits, especially when consumers can’t yet imagine what’s possible. Early Swatch market tests, for instance, produced negative results; people simply didn’t like the idea. Yet by relying on observation, intuition and belief in their vision, the team discovered unexpressed needs that consumers couldn’t articulate.

6. Embrace change. The Swiss invented quartz watches but their fear of new technology allowed the Japanese to seize the opportunity. By the time the Swiss realised what they’d unleashed, Seiko was already leading the world. Change will happen, whether you like it or not, and at an ever-increasing rate. Ignore it at your peril. As smartwatches reshape the industry, are Swiss brands adapting quickly enough?

7. Trust your instinct. Instinct played a huge role in Swatch's early success. As Konstantin often says: "The test of a good idea is first and foremost does it make the heart sing? If it does, then – and only then – should we apply our rational minds". This prompts anyone to assess the idea emotionally and only then apply rational thought to ensure the idea isn't reckless. Konstantin built his marketing team by prioritising genuine energy, creativity and passion over experience and formal qualifications.

8. Be relentlessly consistent. Swatch executed its fashionable, affordable and imaginative character across every touchpoint with rare obsession and passion. Whether it was product design, pricing, distribution or communication, every detail told the same story: Swatch was a fashion accessory, not just a watch. From fashion-show launches to art collaborations with figures like Vivienne Westwood and Damien Hirst, every move reinforced a single, coherent brand narrative. Branding excellence lies in this obsession with detail.

Gen Z might be more familiar with brands like Apple than with Swatch, but Apple’s success (and that of many leading brands today) borrows from the same timeless lessons Swatch pioneered decades earlier. Let’s make sure those lessons live on.

Note: This article was updated on 11 November 2025 to reflect the author's name and designation in the standfirst.

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Dr Omar Merlo, Associate Professor of Marketing Strategy, offers insights from his latest book on the Swiss watch industry crusader

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Jónas Oddur Jónasson on how healthcare systems can work better for people

Shamita Harsh — Wed, 15 Jan 2025 12:14:02 +0000

Jónas Oddur Jónasson on how healthcare systems can work better for people

Shamita Harsh Wed, 15/01/2025 - 12:14

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29 September 2025

Dr Jónasson’s research focuses on how analytics and operations can improve healthcare delivery in resource-limited settings. As Associate Professor of Analytics & Operations at Imperial Business School, Dr Jónasson is keen to continue developing models that link operational decisions to patient outcomes and public health. His work spans emergency medical services, behavioural health interventions and global health delivery, with collaborations in the UK, Africa and beyond.

His work develops data-driven models to address the pressing operational challenges faced by health systems—from emergency medical services in urban centres to behavioural health interventions and community-based care in lower-income regions.

A defining feature of Dr Jónasson’s approach is his commitment to making research actionable. His collaborations with organisations such as the London Ambulance Service, Riders for Health in Malawi, Keheala in Kenya and the Clinton Health Access Initiative in Mozambique, demonstrate how carefully designed operations models can be translated into meaningful improvements on the ground.

This focus on impact is also evident in his scholarship. His research has been published in leading journals including Operations Research, Management Science, Manufacturing & Service Operations Management, and BMJ Global Health. Beyond publication, he contributes to shaping the field as an associate editor for Management Science and IISE Transactions on Healthcare Systems Engineering.

Academic journey and recognition for research excellence

Dr Jónasson began his academic career in Europe, earning a BSc in Industrial Engineering from the University of Iceland before pursuing postgraduate study in the UK. He completed an MSc in Operational Research at the London School of Economics, an MPhil at the University of Cambridge, and both an MRes and a PhD in Management Science & Operations at London Business School.

Before joining Imperial, he spent nearly a decade at the Massachusetts Institute of Technology (MIT) Sloan School of Management, where he rose from Assistant to Associate Professor of Operations Management. His time at MIT further cemented his reputation as a leader in the study of healthcare operations, while also giving him the opportunity to work closely with healthcare practitioners and global health organisations.

Dr Jónasson’s contributions have earned international recognition. He received the prestigious Bonder Scholarship for applied Operations Research in Health Services in 2014. His work has since been awarded the M&SOM Practice-Based Research Competition prize (2021) and the William Pierskalla award for best paper in Healthcare Management Science (2024). He has also been a finalist for the Sanjay and Panna Mehrotra Research Excellence Award (2021) and twice for the MSOM Society Award for Responsible Research (in 2019 and 2024). These honours underscore the impact of his research in advancing both rigorous scholarship and socially responsible practice.

Looking ahead at Imperial

At Imperial, Dr Jónasson is excited to continue building bridges between rigorous research and healthcare practice.

Reflecting on his move, he said: "I am thrilled to join Imperial Business School and to work alongside outstanding colleagues in Analytics and Operations. What makes this especially exciting for me is that few business schools in the world can match Imperial’s environment: a top technical university, an exceptional medical school and a leading school of public health. For someone working on health and healthcare, this combination—in my favourite city—is a rare and special opportunity.”

Dr Jónasson looks forward to advancing research that not only deepens academic understanding of healthcare operations but also creates lasting impact for healthcare provides policymakers, patients and communities worldwide.

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Designing systems that build bridges between rigorous research and healthcare practice

Main image: Jónas Oddur Jónasson

3 minute read

Patrick Schneider on household finance and the legacies of institutions

Shamita Harsh — Wed, 15 Jan 2025 12:14:02 +0000

Patrick Schneider on household finance and the legacies of institutions

Shamita Harsh Wed, 15/01/2025 - 12:14

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10 October 2025

Patrick Schneider has joined the Imperial Business School as Assistant Professor of Economics. Specialising in the intersection of macroeconomics, household finance and public economics, Dr Schneider’s work highlights how policies designed to stabilise the economy affect different groups across society.

His current research investigates unconventional macroeconomic stabilisation policies, including the economic and behavioural impacts of early access to retirement savings. Dr Schneider’s work combines rigorous empirical analysis with policy relevance, contributing to a deeper understanding of fiscal interventions and household financial decision-making in dynamic economic environments.

Patrick earned his PhD at the London School of Economics (LSE) where his research focused on how households and firms respond to liquidity constraints and behavioural frictions. His recent work includes “Household Liquidity Policy” (with Patrick Moran), which examines how early access to retirement accounts works as an alternative to conventional stimulus, and how the two differ in their long-term implications.

Translating real-world economic challenges into classroom insights

Before his academic career, Patrick worked as an economist at the Bank of England (2015–18), contributing to high-level policy debates on Brexit and the UK productivity slowdown. He has also held roles in management consulting and the financial sector, and more recently as a macro research intern at Eisler Capital. His policy insights are reflected in publications such as “Market Power and Monetary Policy” (Bank of England Working Paper).

One of his working papers “Decomposing Differences in Productivity Distributions” sheds light on the UK productivity puzzle. Dr Schneider utilised a new decomposition method to show the puzzle is accounted for by a composition effect - workers moving into firms with less productive characteristics - and that this effect is concentrated in the top end of the distribution.

Another more recent paper for the Centre for Economic Performance, “Disunited Kingdom? Brexit, Trade and Scottish Independence” was co-authored with Hanwei Huang and Thomas Sampson and looks at the impact of independence and rejoining the EU for Scottish trade and incomes.

A committed teacher, Patrick has taught widely across economics and public policy at LSE, earning an LSE Class Teacher Award in 2024 for excellence in teaching.

Dr Schneider is keen to equip the next generation of entrepreneurs and said: “I’m most excited to work with our ��ý. Understanding economics is essential to functioning in today’s world, and I want to help our ��ý tool up for their futures.”

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From household liquidity to UK’s productivity, Dr Schneider brings a unique voice in the research landscape

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2 minute read

Shaping smarter healthcare decisions through economic evaluation at Imperial

Shamita Harsh — Wed, 15 Jan 2025 12:14:02 +0000

Shaping smarter healthcare decisions through economic evaluation at Imperial

Shamita Harsh Wed, 15/01/2025 - 12:14

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30 June 2025

Professor Anita Patel, Provost's Visiting Professor of Health Economics at ��ý, talks about the thinking behind the recently launched Imperial Health Economic Evaluation (IHEE).

IHEE is a new joint initiative between Imperial Business School and the School of Public Health to build a flagship institutional capability in health economic evaluation. Its aim is to embed robust economic analysis at every stage of health innovation and research, supporting both internal projects and eventually external partnerships.

Q: What inspired the creation of the Imperial Health Economic Evaluation initiative?
In any resource-constrained system, any ‘new’ programme or innovation - be it a medicine, medical device or a different way of delivering a care pathway - often requires robust economic and outcomes data to demonstrate value for money, either to justify new investment or to understand the implications of redirecting existing resources. Throughout my career, I’ve worked on economic evaluations for health interventions across national and global settings, so I understand well the methods, process and value of generating such evidence robustly.

��ý is home to outstanding health-related research across all faculties, from basic sciences through to translational (research that is concerned with facilitating the practical application of scientific discoveries to the development and implementation of new ways to prevent, diagnose, and treat disease). But embedding economic evaluation into research has often been challenging due to underdeveloped capacity at Imperial in this area of health economics.

Health economists and other related capabilities are dispersed across faculties and departments at the university – with some critical masses at the Business School and the School of Public Health. However, they have tended to converge around specific areas of research, e.g. infectious diseases, which entail specific methodological focuses.

While such expertise is helpful for specific areas there is a wider need that draws on a whole mix of approaches across different clinical contexts and this kind of generalisable economic evaluation within an organised structure has been a long-standing gap area at Imperial, leading to those needing economic evaluation expertise to frequently look for this outside the institution.

IHEE directly addresses this fragmentation and gap by consolidating expertise within a centralised collaborative hub that strengthens Imperial’s capacity in this crucial area.

Ultimately, it’s about embedding economic insight into every step of health innovation across all of Imperial’s health-related ecosystem, so that great ideas don’t just remain ideas - they become sustainable, impactful solutions.

We hosted a launch event in June 2025 to introduce this new initiative designed to strengthen Imperial’s capacity for economic evaluation in health research. IHEE embodies Imperial’s strategy of scientifically grounded interdisciplinary research.

During my time at Imperial so far, I have been mapping the economic evaluation landscape across the college and have spent many hours speaking individually with people who have any interest in economic evaluation, whether in undertaking this kind of research, or needing support in it. As a next phase, the event was focussed on bringing people in a room together to have open conversations about who needs what kind of support so that the shape and nature of IHEE fits the need.

We intentionally brought together the “supply” of economic expertise and the “demand” from researchers and clinicians in one space. We are committed to engage in a way that includes all staffing levels for socially impactful collaboration. So the event intentionally drew on early career researcher involvement to widen the ownership of the initiative and allow it to evolve to meet the needs of future health challenges. It’s an opportunity to map capability, build relationships, and start thinking strategically about how to embed this across Imperial’s health research legacy.

Q: How do you plan to engage with external stakeholders interested in health economic evaluation?

The first step is visibility. Creating a named entity - Imperial Health Economic Evaluation - gives funders, partners, and all stakeholders something concrete to connect with. There are obviously some basic administrative prerequisites e.g. an email point of contact, a dedicated webpage, directory of expertise and support mechanisms to make collaboration easier.

But it’s really about building meaningful connections and a track record. Isolated successful projects don’t in themselves signal long-term capability. A structured network with active and invested members, strong and impactful outputs, and shared goals does. Other researchers and funders want to engage with teams that are credible, diverse, and strategically aligned.

Q: How important is it to deal with the complexity of health economics before solving challenges at large scale?
Health challenges are rarely isolated. They sit within wider structural contexts that involve social, behavioural, political, commercial, environmental, and technological dimensions. Economic evaluation of potential solutions would ideally account for such context in understanding value – although in reality the extent to which this happens is driven by the nature of decision-making frameworks, both explicitly and implicitly.

Nevertheless, interdisciplinary approaches are often necessary even when not allowing for the full scale of complexity.

For example, if assessing a robotic surgical tool, it is relevant to account for engineering insights, clinical outcomes, patient and professional experiences, and market potential. Or in evaluating post-heart-attack behavioural interventions, it may be important to consider patient psychology, caregiver burden, and long-term cost implications including impacts on work productivity.

We want IHEE to be a diverse and versatile collection of expertise that not just undertakes economic analysis for others but offers informed ideas and contributions to help frame these interdisciplinary questions in a way that leads to meaningful, actionable and scalable insights.

Health, innovation and improvement is not just about the human body but also people's behaviour and the conditions in which illness arises and the conditions in which illness can be solved.

Q: What kind of projects can drive innovation in this space?
We’re already seeing engagement across domains: engineers developing health tech, clinicians designing care models, and social scientists working on behavioural interventions. Projects might range from national policy evaluations to local, community-based studies.

Crucially, we want evaluations to reflect real-world impact - not just system efficiency but also the lived experience of patients and carers. Embedding economic evaluation from the outset ensures research has both scientific and societal relevance.

Q: What does the initiative need to succeed and what is its long-term vision?
Strong foundations are essential for growing capabilities that are relevant and sustainable. Initially, we need a few key ingredients like resourcing for key posts, and commitment to a growth plan. Along with the initial investment, we need people who can dedicate energy to drive this forward with a truly collaborative spirit that can move beyond siloed thinking. A centralised hub is important for facilitating this.

A few high-quality grant wins can change everything. They enable us to recruit dedicated researchers who can embed economic thinking into everyday research. We also can't achieve a long-term roadmap that is simply led by senior academics - PhD ��ý and early-career researchers are critical for giving the initiative life through initiating ideas and projects, contributing to training and development, and ultimately sustaining the work and human connections.

In an organisation as large and diverse as Imperial, that might well entail tricky internal conversations about sharing credit, rethinking collaboration and funding allocation mechanisms, and embracing new ways of working – but these are all just processes and it is important to keep a clear view that they merely exist to support the end goal of producing excellent research that informs policy and practice. Imperial has world-leading expertise.

But to realise our full potential, we need to act as one - cohesive, connected, and committed to collaboration.

Note: This Q & A was updated ton 04.04.2025 to better reflect the outcomes of the IHEE launch.

In conversation with Professor Anita Patel to learn about the strategic launch of Imperial Health Economic Evaluation

Main image: Launch of the Imperial Health Economic Evaluation initiative | ��ý

6 minute read

AI-powered rental fashion: Smarter recommendations for a sustainable future

Gah-Yi Ban — Wed, 15 Jan 2025 12:14:02 +0000

AI-powered rental fashion: Smarter recommendations for a sustainable future

Gah-Yi Ban Wed, 15/01/2025 - 12:14

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6 May 2025

Fashion is one of the most polluting industries in modern times. It produces about 10 per cent of the UK's annual carbon footprint – more than all international flights and maritime shipping combined. Research from Climatetrade, 2023, shows it also consumes vast amounts of water and generates millions of tons of waste. According to Fashion Transparency Index 2023, the constant demand for cheap clothing has made the industry a "key driver of human rights abuses". One of the largest study into clothing habits ever undertaken by climate action NGO WRAP shows the UK's wardrobes hold 1.6 billion items of unworn clothes.

To address some of these challenges, a new business model of subscription rental fashion has sprung up in recent years. Established brands like LK Bennett and Ann Taylor, along with startups such as Hurr, My Wardrobe HQ, nuuly, and Armoire, now offer rental services that allow multiple customers to “share” a much larger wardrobe, reducing the need for constant new purchases. These companies operate on a monthly subscription model, enabling members to rent and swap garments within each period. Returned garments are inspected, cleaned, and recirculated, ensuring efficient inventory use. The rental fashion business model has potential for reducing waste, lowering emissions, and extending the lifecycle of clothing, all the while keeping customers stylish and satisfied.

The challenge of keeping customers engaged

As operations researchers, my colleagues and I, together with a PhD student, Jiannan Xu, were drawn to rental fashion because of the operational complexity it presents. We partnered with a rental fashion startup and analysed its customer data. One issue stood out from the analysis: customers were not staying on the platform long enough. Many left after the initial discounted trial period, citing dissatisfaction with the style or fit of their rented items.

To improve retention and enhance the customer experience, we developed a novel approach to optimising personalised recommendations for rental fashion businesses. Our work focused on two key challenges:

Encouraging customers to subscribe – many companies offer discounted trials, yet potential subscribers hesitate because they’re unsure whether they’ll find styles they like.
Retaining customers beyond the trial period – a large percentage of cancellations stem from product fit uncertainty. Customers may select items based on images and descriptions, only to find that they don’t meet expectations in person. This mismatch leads to frustration, increased returns, and lower renewal rates.

Smarter assortment optimisation with AI

To tackle these issues, we developed an AI-powered algorithm that improves how rental companies curate product recommendations. Instead of relying on generic recommendation engines or brute-force optimisation, our model develops and optimises a stochastic decision model to account for the unique structure of rental fashion businesses. Specifically, it considers:

Initial selection uncertainty – predicting which items are most likely to encourage customers to subscribe.
Renewal uncertainty – identifying which items will maximise customer retention after the first rental cycle.

By carefully balancing these factors and using smart mathematical approximations, we developed a fast, scalable, and personalized ranking algorithm—one of the simplest and quickest methods for optimising the assortment curation process. Essentially, our algorithm gives a personalised score to each garment, whereby the score weighs in the expected consumer surplus (“signal”) and the uncertainties regarding the customer’s initial and post-wear valuations (“noise”). It thus has parallels with finance and engineering applications where good decisions are made by balancing signal-to-noise ratios.

Alternative methods to our algorithm would be either too slow for real-time use, or ineffective as they do not optimise the business objective. In extensive numerical simulations, we show our algorithm ranks and refines product assortments in milliseconds, compared to minutes using brute-force optimisation. We further show that, even under stress-testing scenarios, our algorithm can achieve results within 6.5 per cent of the best possible profit outcomes, making it both effective and scalable.

Practical benefits for rental fashion companies

Beyond technical advancements, our research has real-world implications for the rental fashion industry. By ensuring that customers receive better-matched recommendations, businesses can reduce unnecessary returns and improve overall satisfaction. This leads to:

Fewer shipments and exchanges, reducing logistics costs.
Better use of inventory, maximising item circulation.
Higher customer retention rates, strengthening long-term profitability.

The future of AI in subscription-based rentals

Beyond rental fashion, the principles behind our AI-powered optimisation model extend to subscription-based rentals of experience goods in general. This includes electronics rentals, furniture subscriptions, and toy libraries, where selecting the right assortment is key to customer satisfaction and retention. By refining product recommendations, businesses can optimise customer engagement, reduce churn, and improve profitability.

Our research is among the first to explore assortment optimisation in this space, setting the stage for further studies in inventory and subscription management. While rental businesses may not solve all the environmental challenges, smarter, AI-powered recommendations can significantly enhance business viability and the overall customer experience—paving the way for a smarter, more efficient future in rental commerce.

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Can AI optimise rental fashion sustainably while boosting retention?

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The Financial Times covers Centre for Sectoral Economic Performance health tech strategy report

Evie Burrows-Taylor — Wed, 04 Dec 2024 09:24:30 +0000

The Financial Times covers Centre for Sectoral Economic Performance health tech strategy report Evie Burrows-Taylor Wed, 04/12/2024 - 09:24

13 November 2024

How to use analytics to play darts like a pro

Martin Haugh — Mon, 21 Oct 2024 11:47:42 +0000

How to use analytics to play darts like a pro

Martin Haugh Mon, 21/10/2024 - 11:47

21 October 2024

For the first time, new research from Imperial Business School demonstrates how to calculate the optimal darts strategy.

From expected goals in football to biomechanics in cricket, sport is undergoing an analytics revolution. No discipline is untouched by a newfound focus on statistics, and this includes darts – a game which has undergone a rapid journey from pub activity to global primetime.

In darts, two players alternate taking turns of three successive throws. The goal is to get from 501 points to zero before your opponent, with the final throw hitting a double. To date, however, analysis of darts has focused on the individual getting from 501 to zero in as few turns as possible, which isn’t quite the same thing. Our research is the first to account for this subtle difference by modelling darts as a dynamic zero-sum game.

Strategic play

In other words, when computing a player’s optimal strategy we ought to take the opponent’s score into account. This is particularly important towards the end of a game, when a player could choose to aim for the double bullseye – a region worth 50 points that counts as a double, but is considerably more difficult to hit than other doubles.

Whether choosing this high-risk, high-reward option is optimal depends on the opponent’s score. If the opponent is likely to win next turn, it’s more likely to be worthwhile. Conversely, if the opponent has a high score remaining and is unlikely to win next turn, it might be better to take a safer option and aim for an easier double on the next turn.

By analysing data from professional players, we were able to develop a model to calculate a player’s optimal strategy for this type of situation. To illustrate this, we compared two hypothetical situations. In both situations Player A is on a score of 50 with one throw left in their turn. In the first situation Player B is also on 50 and in the second Player B is on 150.

No discipline is untouched by a newfound focus on statistics

We can calculate Player A’s win-probability as a function of where on the dartboard they target the final dart in their turn. In one situation we assessed, for example, it is much more advantageous for Player A to be aggressive and aim for the bullseye, as it gives a win probability of 46.8 per cent compared with much smaller win probabilities for any other region of the board.

In the second situation we looked at, however, a defensive approach offers a superior win percentage of 78.6 per cent if Player A aims for single 10, as this leaves them with three throws at the easier-to-hit double 20 on the next turn. This is because Player B is far less likely to win on their next turn, so Player A is likely to have another turn and therefore another chance to win.

We found that playing strategically in this way gives the typical professional player an increased chance of victory of between 0.2 per cent and 0.6 per cent in a single game (also known as a "leg"), compared to using a strategy that ignores the opponent’s score. Over a longer match (e.g. best of 35 legs), however, this can be as high as two to three per cent – a significant edge for professional players.

Skill factor

However, this does not take into account variations in skill between different players. In practice, skill levels vary with the target region (e.g. players practise targeting triple 20 more, so can hit it more easily than other triples) and the individual player (e.g. one player might be better at hitting certain regions than others).

As we did not have data for every player–target combination, we applied empirical Bayesian methods to fill the gaps, allowing us to fit a skill model for each player. We then used this to analyse real-world situations.

For example, in a 2018 match between Gerwyn Price and Peter Wright, Wright was on 18 and Price was on 20. It was the beginning of Wright’s turn and the most obvious strategy was to aim for double nine to win the leg. Instead, he aimed (successfully) at single two, then needed to hit double eight with one of his next two throws. He missed both of those, and Price then won the leg.

When computing a player’s optimal strategy we ought to take the opponent’s score into account

Commentators questioned Wright’s decision not to use all three throws to aim at double nine. However, according to our skill model, what he did was indeed the optimal strategy for him, with a win percentage of 71.4 per cent when targeting single two with his first dart versus 70.5 per cent if he targeted double nine.

Interestingly, when we applied the same situation to a different player – Michael Smith – our model recommended the double nine approach, with a win percentage of 77.8 per cent compared to 70.3 per cent. This is because Smith is more adept at hitting double nine than double eight, while the opposite is the case for Wright.

This suggests experienced players are well aware of their own relative strengths and weaknesses. Our skill model effectively makes this instinctive knowledge visible, unlocking one of the key mysteries of the game – how and why the top players play the way they do.

This article draws on findings from "Play Like the Pros? Solving the Game of Darts as a Dynamic Zero-Sum Game and An Empirical Bayes Approach for Estimating Skill Models for Professional Darts Players" by Martin B. Haugh (��ý) and Chun Wang (Tsinghua University).

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Can managers really learn anything from sport?

Sporting metaphors are everywhere in business but aren't always liked. Dr Jan-Michael Ross joins the game to show such language is not down and out, if you keep your eye on the ball

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How to survive as an entrepreneur: insights from Steve Blank

Evie Burrows-Taylor — Tue, 13 Feb 2024 11:47:09 +0000

How to survive as an entrepreneur: insights from Steve Blank

Evie Burrows-Taylor Tue, 13/02/2024 - 11:47

14 February 2024

We sat down with world-renowned entrepreneur Steve Blank to talk about the significance of the lean startup movement, how generative AI will revolutionise the business landscape and what leaders need to do to survive the changes ahead

Famed for his founding role in the lean startup movement, Steve Blank, now an adjunct professor of entrepreneurship at Stanford, has also co-created the Imperial Wicked Module at Imperial Business School. The class teaches ��ý to use lean startup tools to address “wicked” problems that have multiple moving parts and no obvious solution, such as insurgencies, disinformation and climate change.

We spoke to Steve about the significance of his work and the biggest challenges and opportunities facing today’s entrepreneurs.

Why was the lean startup movement such a widespread sensation?

Lean’s biggest insight was observing that startups are not smaller versions of large companies and, while large companies execute business models, startups search for them. For the business world, it was like discovering an entirely new continent.

We had built tools for executing an existing business model, but we had absolutely nothing when it came to searching for them, including the understanding that it needed to be done.

My work, along with that of Eric Ries and Alexander Osterwalder, formed the beginnings of the Lean Movement. I remember going to some of the best business schools in the world and people saying: “How hard can [running a company made up of] six people in a garage be?” But I deeply understood just how hard the startup setup was.

How will generative AI impact entrepreneurship?

The impact on entrepreneurs will be enormous: they’ll be able to use data to look at what people in certain demographics want and use generative AI to come up with product ideas, websites and even pivots.

Now, if I’m in healthcare and the NHS decides they want to make money, I could take all the health data I have about everybody in the UK and start figuring out how to do it using AI models. If I was an entrepreneur today, I would be working on a piece of enterprise software to create an end-to-end platform for using AI in building startups.

What innovation challenges are unique to today’s businesses?

Large organisations are designed for repeatable and scalable processes. This works well when your business environment is relatively stable, or your competitors have the same resources as you.

These days, you’re competing with smaller companies designed to move rapidly and take risks, and that’s hard to sustain. Companies adopting startup methods often end up with innovation “theatre”, rather than innovation delivered. Carving out an innovative path requires committed leadership, culture and process change.

What is the most common mistake you see startups making?

Entrepreneurs have the passion to come up with an idea, execute it and then expect to stand back and see all the orders rolling in. That almost never happens.

The phrase I keep repeating after two decades: there are no facts inside the building, so get the heck out. When I taught the Imperial Wicked Module at Imperial, I told ��ý how important it is to talk to customers and listen to the data.

How do you think large corporations can overcome challenges with agility?

It really starts with the leadership team agreeing that execution pays your salary, but innovation pays your pension. Then deciding whether they're willing to make the changes necessary to provide a parallel pathway for innovation.

However, the worst thing you could do is make the entire company about innovation and put the core business at risk. My first mantra to CEOs is: whatever you do, protect the core.

How can leaders ensure they stay relevant?

If I was a CEO, I'd ensure I was thoroughly educating myself about the changes in my sector. If you don’t understand the relevant technology, supply chain, manufacturing et al and its implications, it would be like a CEO at the turn of the century not understanding manufacturing in China.

Lifelong learning plays a large role in figuring out how to keep CEOs continually engaged in new methods, tech, challenges, as well as global opportunities and threats.

Imperial Wicked Module leader Cristobal Garcia Herrera conducted a fireside chat with Steve Blank at the Wicked Acceleration Labs 4th Annual International Symposium on Corporate Acceleration and Digital Transformation in November 2023.

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Can managers really learn anything from sport?

How to survive as an entrepreneur: insights from Steve Blank

We sat down with world-renowned entrepreneur Steve Blank to talk about the significance of the lean startup movement, how generative AI will revolutionise the business landscape and what leaders need to do to survive the changes ahead

Why was the lean startup movement such a widespread sensation?

How will generative AI impact entrepreneurship?