The Hitchhiker's Guide to the Long Tail: The Influence of Online-Reviews and Product Recommendations on Book Sales - Evidence from German Online Retailing

摘要

Exploring the long tail phenomenon, we empirically analyze whether online reviews, discussion forums, and product recommendations help to reduce search costs and actually alter the sales distribution in online book retailing. We have collected a data set containing 320,248 observations for 40,031 different books at Amazon.de, each assigned to one of 111 different product categories in our sample. By adopting an innovative approach, we provide the first long tail conversion model for the German online market, based on publicly available sales data. Our results indicate that online reviews and automated product recommendations reduce search costs by facilitating the identification of adequate books and the assessment of their quality. This highlights the relevance of information technology implementation as vital part of the marketing strategy.