When I presented at the Teradata Partners conference on the subject of Long Tails and Black Swans in 2008, one of the anecdotal stories I told was about online specialty diaper purchases in Germany. I was amazed that online stores could compete with the brick and mortar outlets on goods with such low margins, including the additional shipping costs. Well… Amazon has confirmed this with the purchase on the online diaper and soap store provider Quidsi, Inc.
As the article states, “Major consumer-product companies are accelerating their online investments because it provides direct access to consumer data, a gold mine that has long been controlled by retailers.” What is happening here is that the value of the data is exceeding the additional cost of the distribution channels. This is in addition, for Amazon, to driving additional sales from the new shoppers as they add higher margin goods to their online shopping carts.
The rules are still holding: the more data, the better – as long as your organization is prepared to handle it.
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