In most businesses, up to 80% of turnover is generated by just 20% of the product range. The remainder of the range is termed a retailer’s long tail stock – and it’s that which can be the key differentiator to your business and therefore the most important to get right.
The success of a long tail strategy, a term first coined by writer Chris Anderson in Wired magazine in 2004, is that it allows retailers to realise significant profits by selling low volumes of a wider range of harder-to-find items than by selling higher volumes of a more limited range of popular items.
But with so much attention paid to that prime 20% of stock how do you still ensure you surface the remaining long-tail stock that will give you the niche market you need to stand out?
That relies on your customers finding those goods in the first place – which means you have to work hard on product discovery. Social proof messaging can help, since it can enable customers to find more than just the best-selling and most popular products in your range. This makes it useful for selling long-tail products as well as excess inventory.
Excess inventory is a very real challenge for retailers this year. The supply chain backlogs of late 2021 and early 2022 have seen retailers trying to shift stock since the summer. Walmart’s US president and CEO John Furner reportedly told analysts in June that there was around 20% of stock that retailers would wish to make disappear if they could and said there were already more than 10,000 rollbacks in place at the time, as well as an increased volume of discounts to continue.
But it’s not just the supply chain backlogs that have hit inventory levels. Consumers are also cutting spend as inflation and price rises hit their pockets, leaving retailers to look at increasing promotional activity to tempt cautious customers to buy, as well as cutting prices to clear stock.
Meanwhile, off-price retailers such as TJ Maxx, experts in the management of long tail stock, are snapping up the opportunity of the stock abundance by stocking up on discounted merchandise with the amount of merchandise on the overstock market up by around 40% compared to June 2019.
So how can social proof messaging help to shift long tail items and clear excess inventory?
Although social proof messaging works well for surfacing bestselling items, helping to guide customers to that top 20% of stock that sells best it can also highlight other items within the same category – such as one of the top 10 or 20 bestsellers that day for example. This can encourage sell-through of similar items in the range rather than just the favorite.
And its parameters don’t need to be limited to traditional bestsellers. It can also surface other products that might normally sit in the realms of long tail stock but for whatever reason might be selling well at unexpected times. For instance, bathroom goods selling well pre-holiday season as customers spruce up their bathrooms ahead of guests, arriving.
At Taggstar our platform monitors the rate of sale for each individual product and compares the historical average for that same product, and this is done in real-time across the entire product catalog.
This is a subtle way to show shoppers what others like them are buying – and could encourage such behavior from them too, reminding them that their bathroom could also do with a makeover before the guests arrive for example.
The popularity of a product can turn on a dime – unseasonal weather, product placement in a TV program or on social media, for example – which means that your long tail stock can very quickly turn into trending items themselves – again something that can be highlighted with social proof messaging.
