By Mantaza Assyaed (AKA MINTY)

The Long Tail

What is The Long Tail?

The Long Tail is a retailing concept describing the niche strategy of selling a large number of unique items in relatively small quantities – usually in addition to selling fewer popular items in large quantities.

In a market with near infinite supply (huge variety of products), a demand will exist for even the most obscure products.

The concept was popularised by Chris Anderson in an October 2004 Wired magazine article.

Before the Introduction of Long TailThe twentieth-century commerce has been dominated by:

An intense search for one-size-fits-all products. Companies trying to predict demand for their goods. Products that don't sell immediately getting pulled quickly. A limited range of popular products being available.

The introduction of the internet and commerce has created an era of unprecedented choice for consumers. When you have a store with unlimited shelf space, you are serve the long tail part of the demand curve.

The driving forces behind the long tail phenomenaIn a nutshell long tails emerge in an industry whenever the cost of reaching niches gets reduced to a very low level. There are three powerful forces which can cause these costs to fall:

The tools of production become more widely available. The costs of distribution are cut appreciably. Some way of connecting supply and demand is established.

Whenever these three forces are present in an industry, look for a long tail to emerge as the driving force of commerce.

Rules of success for using the long-tailSuccessful long tail businesses will treat consumers as individuals

The secret to commercial success in an economy dominated by long tail:

1. Make everything you have to offer available.2. Help people find what they want.

The savvy consumer is the best customer and they are the ones who appreciate and consume the long tail.First time users or light users should be directed to the hits table where in over 90% of the time, they’ll find what they want. Heavy users should be taken to the hits area but with recommendations and more options to explore.

Consumers Variety of choicesConsumers currently face the biggest explosion of variety in history. To take just a few representative examples:

The advertising firm OMD has estimated there are 19,000variations of Starbucks coffee available. Mintil International found in 2003 alone, 26,893 new food and

household products were introduced. These new choices

included 115 new deodorants, 187 new breakfast cereals and

303 new women's fragrances. iTunes now makes available to consumers more than 2million songs which can be downloaded for listening in digital

format.

The effect of Long tail"Goodbye Pareto Principle, Hello Long Tail"

80/20

Competitive impact Before a Long Tail works, only the most popular products are generally

offered. Examples:

Large web business with broad coverage such as Yahoo or BBC News are threatened by smaller web sites with niche focus.

Blockbusters is threatened by Netflix because it offers titles that blockbusters don’t.

Who uses Long tail?

Significant portion of Amazon.com's sales come from obscure books that are not available in brick-and-mortar stores.

Employee described the Long Tail as follows: "We sold more books today that didn't sell at all yesterday than we sold today of all the books that did sell yesterday.“

Micro-Finance Offers very small credits to lower-middle to lower class and poor people, that would

otherwise be ignored by the traditional banking business. The banks that have followed this strategy of selling services to the low-frequency long tail of the sector have found out that it can be an important niche, long ignored by consumer banks Grameen Bank in Bangladesh and two banks in Mexico called Compartamos and

Banco Azteca.

Who uses Long tail? Continued….Marketing

New Media Marketing: Building and managing of social networks, extend the reach of marketing to the low-frequency, low-intensity consumer in a cost effective way often through RSS feeds and blogs.

Viral Marketing: Spreading of marketing messages using pre-existing social networks, with an emphasis on the casual, non-intentional and low cost such as Youtube videos and viral emails.

Benefits & DrawbacksBenefits:Increases target MarketsMore products on offer to consumersSelling Less of more = increase on profitabilityReduces the cost of storage and distribution

Drawbacks: Internet Access is required for both consumers and BusinessesBusinesses need an e-commerce/websiteConfusion of the distinction between the interpretations of where the "head" and "tail" begin.

The future of The Long TailThings are going to be different in the future. It helps if you keep in mind a few basic ideas and concepts about the realities of the long tail economy:

Always think in terms of abundance, not scarcity. Blockbusters will still come along, they are here to stay. The niche revolution will reach every industry.

Successful long tail businesses will require both hits and niches to prosper well into the foreseeable future.

The question tomorrow will not be whether more choice is better, but what do we really want?

Referenceshttp://ministrynetconference.com/wp-content/uploads/2009/10/The-Long-Tail.pdf

www.novelr.com/2008/02/08/the-long-tail-and-o...

ANY QUESTIONS