What is the long tail?

The “Long Tail” – the extensive, online, sustained reach of smaller, low-volume specialized
products – is now wagging the big dog of blockbuster hits in news, music, literature and
film. It is invading and changing many retail markets. Internet-driven retailing technology
has fundamentally altered the balance of marketing power. Mega-sized big box retailers
are being threatened by the long, cyberspace tail of mini-markets and fragmented niches.
The long tail consists of the “hidden majority,” the vast assortment of books, films, recordings
and other items that don’t become popular hits. Some of it is obscure garbage, but long-tail
merchandise includes a lot of quality products that “one-size-fits-all” gatekeepers bypass as they balance expensive inventory and finite space. This changes the 80-20 rule. Some items will continue to garner better sales than others, but “even if 20% of the products account for 80% of the revenue” great profits can still be made selling the other 80% – particularly “in long-tail markets, where the carrying costs of inventory are low.”

In baseball terms, Wal-Mart and other big retailers can carry only the home runs and
the grand-slam products. But niche, long-term, online vendors, who make everything
available, can profitably sell bunts, singles and walks. And, when they sell a long string of
little hits and bunts, the long-tail profit score is right out of the ballpark. For example, the
typical NetFlix consumer – who can order either popular or obscure films in abundance
without leaving home – rents DVDs at a rate triple that of standard video/DVD rental
shops. Today, 5% of U.S. shopping occurs online. Amazon CEO Jeff Bezos predicts it
will reach 15% of all retail.
For another demonstration of the power of the long tail, look at the literary shelf life
of Touching the Void, British author and mountaineer Joe Simpson’s book about his
dangerous, near-fatal mountain climbing adventures in Peru. Published in 1988, it got
favorable reviews but was quickly forgotten. Ten years later, its fortunes dramatically
changed when a similar book – Into Thin Air, Jon Krakauer’s dramatic Mt. Everest saga –
became a hot seller. When mom-and-pop reviewers compared the two books on Amazon.
com, their favorable buzz made Touching the Void into a New York Times bestseller. The
extended tail of online consumers’ specialized preferences powerfully revived a book
the merchants of bestsellers had long forgotten. This underscores the forceful ability of
Amazon and other online retailers to churn profits out of niche goods.

To learn more, search for the author Chris Anderson on Get Abstract, a great book summary site for busy business people, or purchase the book online.

Tammy Martin

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At Martin Marketing we help businesses take the lead in their industry with digital. We're centralized in Newmarket, Ontario and our remote team is located across Canada and United States.

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