98. The 80-20 Hypothesis

A female student from Social Media Usage course and a male student of Party Politics course are talking in the bus stop outside the NILS building. It is past 8:30 pm and all classes have got over.

Girl: Today we did something interesting. We had a class on what type of information you should share on social media if you are running a store and want to advertise your merchandise online.

Boy: What type of store?

Girl: Anything, from big chain stores like Shoppers Stop to smaller online start-ups selling stuff like key chains or handbags.

Boy: That is a long range.

Girl: And yet they have the same purpose. Tell me, what do you remember from big chain store adverts on Facebook?

Boy: Like Shoppers Stop? Colourful clothes mostly. Some bath towel kind of stuff as well. Scented candles.

Girl: That’s all?

Boy: Umm…some prices and discounts. And some happy family kind of photos with the models wearing the products.

Girl: Okay. Myntra?

Boy: Similar. Lot of clothes and other stuff. Discounts, combos. Models wearing stuff.

Girl: Amazon?

Boy: Computer accessories.

Girl: Only?

Boy: Books also I guess. I don’t read much.

Girl: No wonder! What type of computer accessories?

Boy (thinking): Mouse pads, USB drives, laptops.

Girl: What kind of laptops.

Boy: Mostly notebooks of basic models. Some very hi-fi gaming laptops.

Girl: Some classy stuff and some for the middle class.

Boy: You can say that.

Girl: Not me. The teacher said so. She was saying that every store that puts up adverts online will show 80% of middle class accessible products with low prices, discounts and attractive combos and about 20% of high class products. They may never sell those 20% but it only increases their brand value.

Boy: Gaming laptops make people think they are not a roadside shop?

Girl: Yes, even if nobody is buying the laptop. Same with scented candles in Shoppers Stop. Few will buy them, but it makes them look a classy outlet. Which is why, when you are creating social media adverts for your store, you should have 80% of middle class products meant for real sale and 20% of high class product mostly to boost your brand value.

Boy: Some shops in malls only sell extremely high-end products.

Girl: And nobody buys them. The owners of those shops have a bigger business and that shop is the 20% of that entire business.

Boy: Hmm. 20% invested in imported perfume and real business is actually chewing gum.

Girl: Possible.