The Effectiveness of E-tailers’ Communication Practices in Stimulating Sales of Niche versus Popular Products

Abstract

Using sales data from 30,008 books from Amazon.de, this article studies the effects of four distinct online communication practices that e-tailers increasingly use: presenting product networks (recommender systems), social features (electronic word of mouth and various types of user-generated content), free trials, and vivid content. These practices vary greatly in their effectiveness in influencing consumers’ purchase decisions. The author also provides insights into the sales frequencies of popular versus niche products, in response to the selective use of these communication practices. Long-tail theory argues that consumers are particularly attracted to buying niche products, because these products match their personal preferences better than mainstream products do. In contrast, superstar theory predicts increased sales frequencies for popular goods. However, the results from this large sample reveal that both popular and niche products gain sales. The findings specify how different communication practices relatively and differentially affect sales of popular and niche products, which has notable implications for managers’ selective uses of these tools.