IDEA No 73
THE LONG TAIL
The long tail is what happens when everything is available to everyone. Given enough choice and enough customers, obscure products tailored to our individual needs are more desirable than mass-market blockbusters.
In statistics, the long tail refers to distributions with a large number of occurrences far from the head of the spread. They arise when a large proportion of data points are unusually far from the mean.
The term has gained popularity in recent times as a description of the online retailing strategy of selling small quantities of lots of unique items.
The concept was popularized by Chris Anderson in his 2006 book The Long Tail: Why the Future of Business Is Selling Less of More. Anderson suggests that the future of business does not lie in the high-volume end of a traditional demand curve – the blockbusters – but in what used to be regarded as misses, the long, thin, straggly end of the demand curve. Now that consumers can find products tailored to their interests, they will bypass those products designed for mass appeal. Anderson takes this further, suggesting that the tail will grow steadily longer and fatter, as consumers discover more products better suited to their tastes. Technology writer Kevin Kelleher describes this as ‘an embarrassment of niches’. The global reach of the Web means that a large number of disparate, niche audiences can be combined to make one large, economically valuable market. A significant portion of Amazon’s sales, for example, come from obscure books that are not available in high-street stores.
For digital products like music and e-books, storage and distribution costs approach zero. The viable tail of the demand curve is therefore extremely long. Apple’s iTunes lists millions of songs, whereas the largest high-street record stores can only hope to stock thousands.
Throw search into the mix, so that people can find these obscure products, and you have the perfect conditions for the long tail to succeed.
The Web has transformed our world. The immediate gratification and near-infinite choices it offers have overturned traditional business models and revealed new truths about how consumers like to shop.
Amazon’s Josh Petersen sums it up: ‘We sold more books today that didn’t sell at all yesterday than we sold today of all the books that did sell yesterday.’ You might need to read that a couple of times.■
‘We sold more books today that didn’t sell at all yesterday than we sold today of all the books that did sell yesterday.’
Chris Anderson, author of the 2006 book The Long Tail: Why the Future of Business Is Selling Less of More.