Do retailers benefit from the long tail phenomenon?

The Internet and related technologies have vastly expanded the variety of products that can be profitably promoted and sold by online retailers. As a result, while in most offline markets, a few best selling products (blockbusters) generate the bulk of demand, online demand for blockbusters is often accompanied by sales for a huge number of less-selling products (niches). In response to emerging long-tailed sales distribution patterns, Anderson (2004, 2006) coined the phrase Long Tail to describe the phenomenon that niche products can gain a significant share in total sales. Most important from a retailers' perspective is whether additionally offered niche products mainly substitute former existing ones or if consumers expand their demand. While the latter can generate additional profit, substitution is only beneficial if substitutes have higher margins than products that were purchased before. By using a unique data set of a monopolistic video-on-demand operator in Germany that covers all individual sales since its launch from December 2004 until August 2007, we disentangle demand for additional offered films into substitution and additional consumption. Our results reveal that demand of additionally offered films is driven by on average 86.10% additional consumption and only 13.90% substitution, suggesting huge profit potential for retailers by increasing their assortments. © 2010 IADIS

A meta-analysis of the relationship of academic performance and Social Network Site use among adolescents and young adults

This meta-analysis explores the relationship between SNS-use and academic performance. Examination of the literature containing quantitative measurements of both SNS-use and academic performance produced a sample of 28 effects sizes (N ¼ 101,441) for review. Results indicated a significant negative relationship between SNS-use and academic performance. Further moderation analysis points to test type as an important source of variability in the relationship. We found a negative correlation between SNS-use and GPA, while a positive one for SNS-use and language test. Moreover, we found that the relationship of SNS-use and GPA was more strongly negative in females and college students

Using discrete choice experiments to estimate willingness-to-pay intervals

Willingness-to-pay has always been conceptualized as a point estimate, frequently as the price that makes the consumer indifferent between buying and not buying the product. In contrast, this article estimates willingness-to-pay (WTP) as an interval based on discrete choice experiments and a scale-adjusted latent-class model. The middle value of this interval corresponds to the traditional WTP point estimate and depends on the deterministic utility; the range of the interval depends on price sensitivity and the utility's error variance (scale). With this conceptualization of WTP, we propose a new measure, the attractiveness index, which serves to identify attractive consumers by combining knowledge about their price sensitivities and error variances. An empirical study demonstrates that the attractiveness index identifies the most attractive consumers, who do not necessarily have the largest WTP point estimates. Furthermore, consumers with comparable preferences can differ in their purchase probability by an average of 16%, as reflected in differences in their WTP intervals, which yields implications for more customized target marketing. © 2012 Springer Science+Business Media, LLC

A closer look on online banking customers

ONLINE BANKING IS WIDE SPREAD AMONG GERMAN BANKING CUSTOMERS. BUT WHAT REALLY MAKES THEM TICK? CLUSTER 3 GETS INTO DETAILS, USING DATA FROM A NATION-WIDE SURVEY OF ABOUT 20.000 RETAIL BANKING CUSTOMER

Linking customer and financial metrics to shareholder value:The leverage effect in customer-based valuation

Customers are the most important assets of most companies, such that customer equity has been used as a proxy for shareholder value. However, linking customer metrics to shareholder value without considering debt and non-operating assets ignores their effects on relative changes in customer equity and leads to biased estimates. In developing a new theoretical framework for customer-based valuation, grounded in valuation theory, this article links the value of all customers to shareholder value and introduces a new leverage effect that can translate percentage changes in customer equity into shareholder value. The average leverage effect in more than 2000 companies across ten years is 1.55, which indicates that a 10% increase in customer equity is amplified to a 15.5% increase in shareholder value. This research also compares the influence of customer and financial metrics on shareholder value. The findings challenge previous notions about the dominant effect of the retention rate and underline the importance of predicting the number of future acquired customers for a company

Measurement of preferences with self-explicated approaches: A classification and merge of trade-off- and non-trade-off-based evaluation types

Self-explicated approaches are popular preference measurement approaches for products with many attributes. This article classifies previous self-explicated approaches according to their evaluation types, i.e. trade-off- versus non-trade-off-based, and outlines their advantages and disadvantages. In addition, it proposes a new method, the presorted adaptive self-explicated approach that is based on Netzer and Srinivasan's (2011) adaptive self-explicated approach and that combines trade-off- and non-trade-off-based evaluation types. Two empirical studies compare this new method with the most popular existing self-explicated approaches, including the adaptive self-explicated approach and paired comparison preference measurement. The new method overcomes the insufficient discrimination between importance weights, as usually found in non-trade-off-based evaluation types; discourages respondents' simplification strategies, as are frequently encountered in trade-off evaluation types; is easy to implement; and yields high predictive validity compared with other popular self-explicated approaches. © 2014 Elsevier B.V. All rights reserved