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The Long Tail

The Long Tail

What is the concept?
The expression "Long Tail" was used for the first time by Chris Anderson in the article "Wired" in 2004. The Long Tail is a retailing concept which describes a niche strategy of selling a large number of unique items in small quantities (webshops as Amazon for eg.). In other words, the rarety of a trend or product can have an important impact in terms of weight or numbers. This theory questions the traditional Pareto model.

How is it different from traditional retail concepts?
The economic model of the Long Tail considers the consumers as individuals, offering a mass personalization instead of a mass market.

If we consider the Pareto model in the cultural industry, the rule concerns only the Hits and does not take into account the sales in general. The industry just think in terms of Best sellers: if a song is not a Hit, it won't be sold and it won't cover the production costs. The logic applied by the iTunes, Amazon or Netflix managers is totally different, they consider that an unsuccessful song can also be sold and generates money. How? Just because it's a huge market, bad songs are more numerous then very good songs.

In this new ebusiness model, everything is available, the good and the bad products, this allows to enlarge the market. Another advantage, the diminution of the costs, if we consider the unuseful costs linked to the sale of a CD: fabrication, distribution, shops costs. The storage and distribution costs are low, it can be interesting to sell products with less popularity.

This is also a good way to make marketing and find a public for small labels or film producers.

Finally, one of the main interest of the Long Tail is to link different products, and increase the searching capability of the consumer, using backlinks or search engine.

What issues will an e business face when using the Long Tail as the method for growing revenue?
For some customers, the lack of references could put a check. And people still love to go out and do shopping with the family on saturday afternoon, they can touch the products, compare, choose by themselves, and test in live a new product. The e business can reduce the pleasure of buying, this stops partially the development of the cybermarket.

Blog: http://thelongtail.com/