An Empirical Analysis on Long Tail Patterns with Online Daily Deals

Seongmin Jeon

Abstract


The renowned Pareto rule of 80/20 has been challenged in the electronic marketplace with the emergence of long tail economy. Mass customization on top of the Internet infrastructure is expected to explain these changes of product concentration. In this paper, we empirically analyzed the micro-transactional data of a Groupon-like daily deal web site to identify the changes of product and customer concentration. The results show the long tail pattern aligned with the previous research on the e-commerce literature on the long tail. We find that the notification setting on email or SMS about daily deal influences the patterns of sales concentration. The information through email and SMS is expected to enable consumers to know about daily bargains and purchase the coupons eventually. However, the email notification for niche products results in the decreased sales while the SMS notification for overall product promotes overall products.


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References


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