When you open an e-commerce website, you will see that among the many products, there are many unpopular products and categories, and the sales of these things are very low. So do you know why the website didn't choose to take these items off the shelves? Let's start with a story.
In 1988, a British climber named Joe Simpson wrote a book called " Touching the Void" about the author and his companions climbing the perennial ice. A thrilling story that happened in the Peruvian Andes.
The book was well-received at the time, but it was only moderately successful during that time and was quickly forgotten.
Then, ten years later, a strange thing happened. Best-selling author Jon Krakauer wrote another book about mountaineering feats called Into Thin Air , which made a splash in the publishing world. Suddenly, "Touch the Peak", which has been neglected for a long time, began to be released again.
The publisher, Random House, even Latest Mailing Database launched new editions to meet reader demand, and book sellers began promoting the book next to "Into Thin Air," further increasing its sales.
The revised paperback version hovered on the New York Times bestseller list for 14 weeks after it was released. In the same month, IFC Films released a documentary adaptation of the book, which received critical acclaim.
At one point, the sales of Touch Pinnacle more than doubled that of Into the Thin Air.
Why exactly does this happen? In fact, it's all because of a move by Amazon.
Amazon's online sales software records readers' buying behavior patterns and makes recommendations on a web page that readers who bought and browsed "Into Thin Air" can also check out "Touch the Peak", and people took the advice and wrote Lots of book reviews.
Higher sales volume drives the mechanism algorithm of the website. More sales are recommended, and more recommendations lead to higher sales.
Of particular note is that by the time Jon Kracauer's new book hits shelves, Simpson's book is nearly out of print. A few years ago, Kracauer's readers didn't even have the chance to know that Simpson's book existed. Even if they knew, they would have a hard time finding it.
Amazon has changed that. It created the Top of the Touch chart retrograde phenomenon by combining unlimited shelf space with real-time information on buying trends and public opinion.
The end result: a sudden surge in sales of an obscure book.
This is the miracle brought by online websites. When people are paying attention to those popular products, the website does not only sell such products, but puts as many products as possible for users to choose from. If Amazon pulls Touch of the Peak because of its lukewarmness, maybe we'll have a hard time seeing the book again.
These unremarkable products occupy a lot of space in e-commerce. Why do merchants do such "thankful" things instead of focusing on the sales of popular products?
This is the " long tail effect ".
The Long Tail, or the Long Tail Effect, refers to the phenomenon that those products or services with small sales but a large variety of products or services that were originally not valued have accumulated more total revenue than mainstream products due to their huge total volume.
Originally published in WIRED's own magazine in 2004 by Chris Anderson, editor-in-chief, to describe the business and economics of sites like Amazon.com Inc., Netflix, and Real.com/Rhapsody model.
Anderson believes that if the store or distribution channel is large enough, those products with low demand or low sales can collectively form a market share that rivals or exceeds current bestsellers and blockbusters.
In the field of the Internet, the long tail effect is particularly pronounced.
The term long tail is also used in statistics, usually applied to the distribution of property and vocabulary.
The Pareto rule, regarded as an iron law by the business world, holds that 80% of the business performance comes from 20% of the products.
According to this law, business operations focus on the few best-selling items on the left side of the sales curve. Most of the unpopular products on the right end of the curve are defined by this law as blocks with no sales force and no profit.
But the long-tail effect has seen another level: a wide range of sales allows 98% of products to have the opportunity to sell, instead of relying on only 20% of the main products, and these products with long-tail characteristics will have room for growth in corporate profits the value of.
Not only that, but the size of the long-tail commodities is staggering, and the total value of their commodities can even compete with best-selling commodities.
However, it is also quite high risk, because the market for each product is very small, although the total amount is large, but not necessarily a product can create profits, and the popularity of successful production will quickly recede.
The long tail theory has been researched by relevant scholars before. They first used an exponential curve to study the relationship between book sales and sales ranking on Amazon.com, and found that 40% of Amazon's book sales come from books that are not sold in local physical bookstores .
This phenomenon has also occurred in the music and video streaming market, smartphone application market, and online game market. The rise of online selection and customization has also gradually fragmented products in the physical market. For example, little-known restaurants have become popular in the online market. and many more.
Long-tail marketing is the most effective application for online retailers like Amazon and Netflix, and it’s a factor for supply-side management of this type of inventory.