The long tail or the short tail: The category-specific impact of eWOM on sales distribution

Abstract

This paper investigates the impact of electronic word of mouth (eWOM) on sales distribution and challenges the conventional wisdom of the long tail theory. As customers refer to eWOM to evaluate products, and each product type entails a different scheme of evaluation standards, the impact of eWOM may differ by product type. Thus, we propose a new type of product categorization based on evaluation standard objectivity and hypothesize that this categorization gradually differentiates sales distribution patterns, some of which refute the long tail phenomenon. To validate the hypothesis, we collect data from Amazon.com, compare the distribution of eWOM among various product types, and conduct the Wilcoxon signed rank test for statistical significance. All the test results show adequate levels of significance; thus, the three hypotheses are supported. This study sheds new light on eWOM research by developing a new approach to product categorization and by proposing a different use of eWOM in searching for products to explain the different effects of eWOM on sales distribution. (C) 2011 Elsevier B.V. All rights reserved.