ITPEC IP October 2020 Question 90

Online sales of a wide range of products each expected to sell very few — that is the long-tail concept.

Plot products by sales volume, best sellers first: a few hit products form a tall head, and a very large number of niche products, each selling little, form a long, thin tail. A physical store has limited shelf space, so it stocks only the head. An online store pays almost nothing to list one more item, so it can offer the tail as well, and the many small sales together can rival the sales of the hits.

Answer (d)

Why not others:

• •(a) — listing products on an auction site for a long time and selling to the highest bidder is online auction selling; the long tail is about the range of products, not the length of the listing
• •(b) — ordering products made to the customer's body measurements, to keep the customer buying, is made-to-order customisation (one-to-one marketing)
• •(c) — selling only products with large sales over a long period concentrates on the head, the opposite of the long tail

Key rule: The long tail earns from the many low sellers that shelf space used to exclude; the Pareto (80:20) view earns from the few best sellers.

Business Industry · AI-written, may contain errors