Shelf space strategy in long-tail markets

Details Shelf space strategy in long-tail markets Shelf space strategy in long-tail markets

2008-08-12

arxiv.org/abs/0808.1655v2

Physica A, 388 (2008) 691-696

Economy

Quantitative Finance

General Finance

10 pages, 3 figures

Scientific paper

10.1016/j.physa.2008.11.009

The Internet is known to have had a powerful impact on on-line retailer strategies in markets characterised by long-tail distribution of sales. Such retailers can exploit the long tail of the market, since they are effectively without physical limit on the number of choices on offer. Here we examine two extensions of this phenomenon. First, we introduce turnover into the long-tail distribution of sales. Although over any given period such as a week or a month, the distribution is right-skewed and often power law distributed, over time there is considerable turnover in the rankings of sales of individual products. Second, we establish some initial results on the implications for shelf-space strategy of physical retailers in such markets.

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