History[ edit ] A frequency distribution with a long tail[ which?
Anderson cites Amazon as a trailblazing company that has taken advantage of a long-tail strategy. Instead, what research there is suggests mixed or mediocre results, with the importance of long-tail often depending on the particular metrics used by researchers.
The best evidence for questioning the wisdom of long-tail as a go-to strategy for online retailers, however, is the long-tail poster-child itself: Instead, what Amazon offers is a marketplace for long-tail items. In other words, Amazon only focuses on directly selling and fulfilling high-demand products and leaves long-tail merchandise for its independent sellers to fulfill.
In its electronic category, for example, Amazon only sells 7 percent of the products while the remaining 93 percent are sold by third-party merchants, according to a article in Marketing Science.
Amazon is a massive company with access to large amounts of aggregated retail data and advanced machine learning algorithms. If Amazon, with all of the big data resources at its disposal, has decided against selling long-tail products directly, other retailers might want to rethink their own endless aisle strategy.
Long-tail has clear benefits. The variety inherent in an endless aisle strategy attracts customers, encourages them to buy many different products in one place, and keeps them loyal.
It also offers great market research. Out of an endless aisle of products, some will begin to sell well, providing solid data for direct offerings that will likely be popular.
Long-tail products have much lower traffic acquisition costs from search engines, price comparison engines, and online auctions.
Long-tail has per-partner costs. Despite marginal costs being lower in the distribution tail, they are still present and include all the costs of supplier on-boarding and data exchange, as well as cataloguing, digital conversion, encryption, storage, and building of databases.
The reality of trying to understand every permutation of market demand and then sourcing the aligned supply is not scalable. Niche sellers often have better market information and lower operating costs than larger retailers.
Niche sellers might be working out of a basement or garage.
They know their niche markets better, and they have better access to and relationships with niche suppliers. They are, therefore, in a better position to incur the risks and costs of long-tail. Amazon receives a cut of each sale. Amazon takes advantage of all the benefits of long-tail and endless aisle.
Amazon passes the costs and risks associated with a long-tail and endless aisle strategy onto its third-party sellers. Amazon uses third-party long-tail data to cherry pick — i. Essentially, Amazon crowd sources its market research using third-party long-tail merchants.
Beware of the Long-tail? Such a strategy will likely only be successful with a marketplace business model — the utilization of a large and vibrant online retail community with thousands of independent third-party merchants taking on the costs and risks of long-tail.
Long-tail, however, will not work for non-marketplace retailers. Instead, those retailers should focus on improving their curation science through market data and an understanding of their customer base.
As they define their curation of suppliers and inventory, retailers can then expand deeper into the inventory of their supply partners via drop shipping. The key to this is setting a clear threshold for where the aisle ends based on partnership, content overhead, and alignment with the curation brand authority they intend to create.
Online retailers would be wise to follow its example.The examples above characterize a long tail problem. With the popular book, there is ample knowledge within Amazon to reflect the context of my interests; with the unpopular book, the knowledge of.
The best evidence for questioning the wisdom of long-tail as a go-to strategy for online retailers, however, is the long-tail poster-child itself: Amazon.
The long tail is a strategy that allows businesses to realize significant profit out of selling low volumes of hard-to-find items to many customers . STEP 2: Reading The Amazon Long Tail Harvard Case Study: To have a complete understanding of the case, one should focus on case reading. It is said that case should be read two times. The long tail is the name for a long-known feature of some statistical distributions (such as Zipf, power laws, Pareto distributions and general Lévy distributions).In "long-tailed" distributions a high-frequency or high-amplitude population is followed by a low-frequency or low-amplitude population which gradually "tails off" grupobittia.com events at the .
This is because Amazon doesn’t do long-tail — despite conventional wisdom. What Amazon teaches us about the long tail market for content discovery. T he market for content discovery is largely unclaimed. Incumbents are focusing on content discovery for the masses.
Apr 03, · The long tail is a way of seeing how items are sold online. There are a few popular items that sell in high quantity then there are millions of items that are only sold a few times.
The long tail is a strategy that allows businesses to realize significant profit out of selling low volumes of hard-to-find items to many customers . STEP 2: Reading The Amazon Long Tail Harvard Case Study: To have a complete understanding of the case, one should focus on case reading.
It is said that case should be read two times.