Friday, November 17, 2006

The Long Tail

I have been reading about the shift that has taken place with the introduction of Internet retailing (specifically, The Long Tail) and came across the concept of "the long tail". This is a really interesting phenomenon that defines the Internet as a whole – "something for everyone".

The long tail refers to the market for those non-mainstream products that traditional retailers cannot afford to stock. Your local Virgin Megastore cannot stock every album ever recorded; it simply hasn’t got the room to store them all. As a result, they choose those albums that they can be sure of selling at least enough copies to cover the cost of storing them. iTunes, on the other hand, just needs some server space to store its stock. Of course, there is a cost associated with this form of storage as well but it is far less expensive. As a result, iTunes can quite feasibly stock every album ever recorded (of course there are challenges associated with doing so – some are pretty esoteric for starters) but there is no disputing that they can offer consumers more choice. The market for those non-mainstream albums that Virgin Megastore cannot afford to stock but that iTunes makes available is the "long tail" and where this market becomes commercially interesting is when the "long tail" represents more sales than the mainstream products do.

Not only is Internet retailing a step forward in terms of consumer and retailer convenience, it has opened up a whole new way of satisfying each and every individual consumer’s preferences.

An interesting concept, certainly, and one with which any commercial information professional should be familiar but is there more to this idea? Could it change society at all? Ever notice how you see certain popular books being read by commuters around the same time? The Da Vinci Code is a really good example of this phenomenon. About two or three years ago, you could pretty much count on seeing one of the dozen or so people near you on the train reading that book (never mind the dozens of others you cannot see on the train who might also be reading it). These days, though, no one is reading it. It was pushed to the market through all available channels and consumers responded. So, given that:
  • less-mainstream products are just as readily available as the mainstream ones
  • Web 2.0 makes it possible for consumers to have a louder voice in recommending books/music/etc
  • Internet retailing continues to grow and the ‘long tail’ phenomenon continues to have commercial appeal
I wonder if this means that over time, we will have more diversity in society – not everyone will be listening to the same albums or reading the same books at the same time…

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