Rudelle Blogging

The secret of Wal-Mart profitability lies into impulse purchases. I visit Wal-Mart to buy some butter and rice. After a dozen of minutes hanging in their premises, my cart is quickly filling up. While browsing around, I am visually strongly encouraged to add a whole bunch of various articles. And it works!
Wal-Mart marketing tactics rely on a complex of blend of products and its associated merchandising (put beers next to pampers). These tactics became so important that a whole marketing research domain has been growing under the name of category management.
On Internet, category management seems of lower interest. Thanks to the magic of Long Tail, e-merchants offer an almost infinite range of products. With a good search engine indexing its catalogue, e-merchants manage indeed to achieve spectacular results. As an example, more than 60% of all books sold by Amazon are rare books, which are not available in traditional bookstores.
The paradox of this Long Tail strategy is that it kills impulse shopping. To browse around these giant catalogues, users are required to enter very precise key words. As a result, they only buy only they were seeking for.
To combine (at last!) Long Tail and impulse purchases, e-merchants need to promote products that users would not have thought spontaneously.
The problem is that in most of the cases, these promotions are not relevant. This translate into very low rates of impulse purchases (on average, less than 2% of visitors). Tomorrow’s challenge thus consists in personalizing for each user specific products.
These techniques require very sophisticated mathematical tools. But they will have a crucial impact on bottom line of the industry. Amazon which understood this trend ahead of the pack, has invested a huge amount of money in this field.
“One fits all” easy strategy will be soon dead. Within the next two years, e-commerce sites which will continue to promote the same products to all their visitors are likely to be out of the game.