According to Chris Anderson, the future of business is selling less of more. Anderson coined special term to describe this new trend: “Long Tail” (his book: “Long Tail: The Future of Business is Selling Less of More”). According to Wikipedia, the long tail is “the colloquial name for a long-known feature of statistical distributions… In these distributions a high-frequency or high-amplitude population is followed by a low-frequency or low-amplitude population which gradually ‘tails off’… In many cases, however, the long tail …can make up the MAJORITY of the graph.”
Sounds too academic? Maybe, but take for example Amazon’s business model. Large proportion of Amazon.com’s book sales come from obscure books that are not available in brick-and-mortar stores! Where inventory storage and distribution costs are extremely low, it becomes profitable to sell relatively unpopular products; however when storage and distribution costs are high only the most popular products can be sold.
As with any other new trend, this can be huge opportunity, or this can threaten your established business. A friend of mine decided that this is an opportunity, so he build his text messaging service (www.ipipi.com) serving hundreds of thousands “insignificant” clients (b2b and b2c) all over the world… Huge success based on the Long Tail!
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1 response so far ↓
1 Matt // Jul 6, 2007 at 1:09 pm
Basically, the emergence of blogs that cater to the niche consumer or interest group is whats fueling this idea. Its not a new idea its been around for a long time. This is also why major publications and retailers are beginning to suffer – consumers and readers are becoming more interested in the obscure ie, their favorite blogs because mass scale mainstream is boring. This applies to blogs, fashion, e-retailers, opinion leaders, etc.
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