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News  3, Jul 2014

The long tail weapon of your e-commerce store

How do you make use of the long tail effect to generate sales for your e-commerce store? According to e-commerce.milo, variety is key

For a start, let’s revisit the golden formula of online sales:

Sales = Unique Visitors (UV) X Conversion Rate (CVR) X Average Order Volume (AOV)

Besides the 7 traffic generation methods to boost visitors (and sales), is there any other way to increase traffic to your online store? Yes, you can also increase the number of visitors to your webstore by just increasing the number of your products listed. Still can’t relate? How could it be possible? The answer is simple, the more products you list, the more pages from your webstore will be indexed hence higher traffic you can expect from the search engine.

longtail1

Top e-commerce sites in Malaysia: No of pages indexed by Google (as of 1 July 2014)

Just take a look at the graph above, sites like eBay.com.my, Lelong.com.my and Rakuten.com.my have millions of pages indexed by Google, hence potentially with huge organic searches traffic. It is quite admirable that a relatively new site like Rakuten.com.my has done so well in SEO, while Lazada.com.my has only 163,000 pages indexed at the time of writing (though it has undergone site revamp recently).

Also Read: Product offerings: The more the merrier for online marketplaces

Let’s look at this from another angle…
As an e-commerce business owner, who are you competitors? You might say that it is another online store but do you know that online retailing is just ~1% of our total retail market size (in Malaysia)? In reality, all e-commerce sites are “fighting” against the physical retail shop!

longtail2

So, how do you beat the physical retail shop? Setting cheaper price online? Is that all? Can’t the “offline guys” do the same? Do you still remember what is the advantage of an online store vs the offline shop?

longtail3

The simple fact is, offline retail shop has limited shelf space while there is no boundary for online store! So, have you found your strategy now? Yes, beat them with VARIETY!

  Mainstream     Niche (Long Tail)  
Popularity Popular Unpopular
  No of items (SKU) Few Many
Stock (per SKU) Many Few

Did you know that 95% of items (or more) in the world are “niche”? Physical or offline retail shop can only sell mainstream or “hit” products due to limitation of space, however online store can sell both mainstream and long tail products without space consideration.

longtail4

The long tail products sales collectively can be better than the sales of your mainstream products. At the very least, you will get more visits and potential sales with long tail strategy.

Also Read: 25 ways for you to increase online sales

The post The long tail weapon of your e-commerce store appeared first on e-commerce.milo.

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