December 23, 2008

Long Tail Strategy for Online Sales

The products that are low in demand or in sales volume when considered together collectively can not only rival, but even exceed the relatively few current bestsellers and blockbusters, if the store or distribution channel is large enough. For example, a significant volume of Amazon.com's sales comes from difficult-to-locate books that are not easily available in brick-and-mortar stores. 
The Long Tail is a surely a potential market. Internet, with the distribution and sales channel opportunities it has created, can enable businesses to tap that market successfully.
The term was coined by Chris Anderson in an October 2004 Wired magazine article which described the niche strategy of businesses, such as Amazon.com or Netflix, that sell a large number of unique items, each in relatively small quantities.
The term can be understood in an alternate manner from a simple XY graph that is created when charting popularity to inventory. 

In this graph, Amazon's book sales or Netflix's movie rentals would be represented along the vertical axis, while the book or movie ranks are along the horizontal axis. The total volume of low popularity items exceeds the volume of high popularity items.

0 comments:

Post a Comment





Follow my blog with Bloglovin
Powered by Blogger.