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Studies

by Mike Masnick

Fri, Dec 2nd 2005 3:20pm





The 46/18 Rule Of Online Shopping: Big Shoppers Buy More

from the not-so-catchy dept

The famous "80/20" rule is often misquoted or misused in amusing ways, but it's generally used to mean that the top percentage of some group add up to a lot more than the "long tail" beneath them. In some ways, this is quite obvious. After all, the richest 20% of the population will obviously own more than 20% of the wealth -- otherwise they wouldn't be the richest 20%. What was really interesting about the original point of the rule was the degree to which the top 20% mattered (80% according to the rule). So, is it nearly as interesting when the numbers aren't nearly as extreme? A new study is touting the fact that 18% of top shoppers represent 46% of online sales. Why those numbers? That's not clear. Basically all this is saying, again, is that top shoppers spend more -- which is something of a truism. It would be a lot more interesting if they showed the entire breakdown and how it changes as you go up the population. Why just look at the 18%/46% point which seems like an entirely random data point? The article claims these people are the "Most Valuable Shoppers," but nowhere is it explained why this was the cutoff point.

6 Comments | Leave a Comment

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  1.  
    identicon
    Rikko, Dec 2nd, 2005 @ 4:07pm

    No Subject Given

    Took me a second read, Mike, but I do agree with you. It's pretty arbitrary and kind of silly. You'd think if there were such a sharp statistical dropoff right there that that itself would be of more interest.. Alas.

    I especially loved Nielsen/NetRatings calls the heaviest buyers MVPs—Most Valuable Shoppers. I guess I'm getting too old for acronyms these days.. I still pretend an acronym is a series of letters representing the first letter of some words.

     

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  2.  
    identicon
    Anonymous Coward, Dec 2nd, 2005 @ 4:41pm

    Re: No Subject Given

    An acronym is supposed to be initials that are spoken like a noun. Like NASA, LAMP, or ICANN. MVP is not an acronym in the academic sense because we say M-V-P spelled-out; not "emm-vipp" or something. Popular buzzword culture has appropriated the term "acronym" to mean anything with initials whether it is spoken as a word or not.

     

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  3.  
    identicon
    Anonymous Coward, Dec 2nd, 2005 @ 4:57pm

    Re: No Subject Given

    maybe Most Valuable Patrons? Still not a real "acronym" though.

     

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  4.  
    identicon
    dorpus, Dec 2nd, 2005 @ 6:42pm

    CDF

    The word you are looking for is Cumulative Density Function.

    In the case of the normal distribution (bell curve distribution), this is represented by the upper-case Greek letter phi.

    Would the CDF of jellyfish ice cream have a steeper cliff?

     

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  5.  
    identicon
    dorpus, Dec 2nd, 2005 @ 6:52pm

    Quantile Function

    Another relevant concept here is the quantile function, where we solve for P(X income) = percent of sales.

    The jellyfish ice cream is being sold exclusively through the internet, as it would not succeed in traditional retail even in Japan. So the internet is turning into a bonanza for curiosity seekers.

     

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  6.  
    identicon
    dorpus, Dec 2nd, 2005 @ 6:52pm

    Quantile Function

    it's supposed to say X less than..., but the damn html erased it.

     

    [ reply to this | link to this | view in thread ]


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