Books: Shelf space that never ends

This book identifies a powerful phenomenon of e-tailing that turns conventional precepts of marketing on their head. John Naughton buys the author's argument.

Chris Anderson is the editor of Wired magazine, one of the bibles of the information age. His book, he tells us, 'began with a mistake'. He was talking to Robbie Vann-Adibe, the CEO of Ecast, a digital jukebox company. Digital jukeboxes are like their analogue counterparts but with one important difference: rather than holding, say, a hundred CDs, they have a broadband connection to the internet and patrons can choose from 10,000 music albums stored on a hard drive somewhere else.

Vann-Adibe had asked Anderson to guess what percentage of the 10,000 albums sold at least one track per quarter. Anderson guessed 50%. The answer was 98%. It was one of those moments that the novelist James Joyce called an 'epiphany' - a sudden spiritual manifestation that provides a blinding insight, in this case into the nature of the digital world.

Why is that figure of 98% so striking? Because it runs directly counter to one of the laws of retailing nature: that generally most of your profits come from a small percentage of your inventory. Anderson had the wit to realise that he had stumbled on something big, and he spent some time trying to figure out what was going on. He looked at lots of other online businesses to see if the Ecast phenomenon was repeated. It was.

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