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The Long Tail

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The Long Tail is a powerful concept that describes how markets and culture are developing now that an enormous range of choice is available to consumers via the Internet. It was first promoted by Chris Anderson, the editor of Wired Magazine, and has since become a major topic of discussion in boardrooms and business meetings around the world.

The Little Shop With Everything

Imagine walking into your local bookshop, to be confronted with a vast array of shelves containing every item that has ever been published, from the works of 14th Century masters to local newspapers written for small communities all around the world. In the real world this is impossible, but in the online world such a degree of choice is available. Websites such as Amazon provide an immense variety of books that classical 'bricks and mortar' bookshops can only dream about. This phenomenon is replicated in the world of music and video by websites such as iTunes and Netflix.

What is most interesting about this new phenomenon of online shopping is how shopping behaviours have changed, and it is this change in behaviour and its implications for businesses and culture that is at the heart of the Long Tail concept.

What Does the Long Tail mean?

If you graphed the sales of all the products available online, starting with the bestsellers and moving down to the low-sellers, you would see that a small number of products at the left of the graph sell very well, but as you move to the right, the line dips down until sales begin to approach zero. This graph is known as a long-tailed graph, because while the number of products selling well (the Head) is very short, the graph of all the products selling in small quantities is very, very long. This is the Long Tail: and what is happening in this part of the graph is remarkable.

Bricks, Mortar and the 80/20 Rule

In the classic 'bricks and mortar' shopping environment, the focus has always been on high-selling items: the hits, the bestsellers and the blockbusters. The prevailing law has been that 80% of all the profits arise from just 20% of the goods available - the so-called '80/20 Rule'. Poor-selling goods are too costly to store and are therefore ruthlessly purged from the shelves. The hits and blockbusters get all the attention, and the low-sellers, the 'onesie-twosies', are dismissed as misses and flops, quickly disappearing into obscurity. The reason for this is pure economics. Low-selling products take up expensive shelf-space and can quickly become unprofitable unless they sell in large numbers. The result for consumers is very limited choice, blandness and lowest-common-denominator offerings that appeal to a broad mass of people, but are not suited for the unique tastes and preferences of each individual.

Chasing the Long Tail

In the online world however, it is possible to offer up a vast array of products even if they sell in very small numbers. Customers can use powerful search tools to sift through this vast range in order to find exactly what they are looking for. What happens is that when a wide choice of products is available, consumers gravitate away from the Head down into the Tail. They seek out products that are more customised to their own individual needs. A thriving market develops for niche items that would never have been apparent in marketplaces rooted in the real world. This movement away from the Head looks set to increase over the coming years.

Longer and Fatter

As customers are migrating towards the Tail, small online producers avail of minimal distribution costs to sell their products, so the Long Tail is getting longer as well as fatter. The total market in the Tail is becoming much larger than in the past. Not only is it large, but very profitable too.

Why Arnie Won't Be Back

The growth of the Long Tail threatens companies and organisations who depend on hits and blockbusters to exist (Hollywood, major music labels, network TV etc.) Recent consumer reports indicate that these companies are feeling the effects of this shift in buying behaviour. This is not to say that in the online world blockbusters do not exist any more, it's just that they appear to have less-relative importance compared to the past.

We're Not in Kansas Anymore

The emergence of the Long Tail gives rise to profound social and cultural implications. With the Internet (and digital TV, digital radio etc.) people can find whatever they like online while blotting out anything that does not catch their interest. The growing fascination with specialist websites and television channels, social networks, blogs, niche music and old movies all suggest that more and more people are purchasing and following things that are more customised to their own particular tastes, rather than accepting standardised offerings intended for a mass-market. It becomes more difficult, therefore, to use the tools of mass-marketing (TV, Radio, Newspapers, etc.) because a large group of people are no longer viewing or listening. The culture becomes person-centric rather than organisation-centric.

The Age of the Niche

With the Internet and the development of the Long Tail, the age of the niche has arrived. This points to a longer-term fragmentation of society, where people are defined less by their geography than by their interests and values. Authority figures have limited impact, news media has less influence, micro-celebrities become more prevalent and mass-advertising becomes less effective. Good or bad, the Long Tail idea gives us an insight into the way the world is beginning to change.

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