So, what’s a Long Tail? Explained best graphically, here is the gist (this is also going to include a 15 second summary of the entire retail world, so brace yourself):
The goal of any retail space is to sell product. (Duh!) Retailers have a finite amount of shelf space, no matter how massive their particular location is. FACT: There are more products available in any given category than retailers have space for on their shelves. (Typically, retailers carry as little as 1.5% uf a maximum of 10% of the variety available.) As a result, retailers are in a constant search for products that will have a high “turn” (i.e. sell high volumes.) The idea being that whether a DVD (as an example) sells 1 copy or 400, it’s taking up the same amount of space on the shelf. (Everyone still with me?)
Now, how this relates to the graph: in any traditional retail environment, a curve exists nearly identical to the one above. Starting on the far left side of the graph (or the “head” of the curve, as it’s called), we see the high-selling products – the “hits”. As we move steadily towards the right side of the graph, sales drop off steeply, and we enter the “tail” of the demand curve – effectively made up of many products, each with very few sales. Brick and mortar retailers, all limited in the number of products they can carry, focus on the “short head” (the very left of the graph) – the products with high “turn”. Which, of course makes sense – go with the products that more people buy, right? Perfect retail logic… until recently.
As Chris Anderson illustrates brilliantly in his groundbreaking book The Long Tail, recent technological developments have created an unexpected (and unbelievably lucrative) opportunity that draws from the “other side” of the curve.
There’s a Market for That
"That’s the root calculus of The Long Tail: The lower the costs of selling, the more you can sell."
Something’s happening in our retail world. Three things, in fact.
- Production costs – from recording CDs to self-publishing books to editing professional looking videos at home – are dropping dramatically.
- Incredibly cost effective distribution channels (eBay, Amazon, iTunes, etc.) are suddenly available, giving anyone with internet access the ability to sell virtually anything.
- Google, Yahoo!, best seller lists and influential blogs are connecting buyers and sellers with ease like never before.
And here’s the result – the “Long Tail”, as Anderson describes it, is much longer, much thicker and more lucrative than any of us may have initially realized, and it’s getting bigger by the day. From the safety of our offices or living rooms, we are safe to explore new niches, or go deeper into a niche we may have already found. (Did you know Amazon sells over 1200 flavours of jam?) People are tired of buying the same old thing – tired of being lumped together with the rest of their “demographic”. Demographic profiling may help determine broad trends, but it will never reflect the tastes of the individual. There are as many different styles and tastes on this planet as there are people. The proof is in the new niche industries being born every day. Companies dedicated to selling anything from maternity t–shirts to olive oil are thriving. With two billion people online worldwide, there’s a market for just about anything. All those markets are hiding under the Long Tail, and all of them are waiting for someone to capitalize on them. So long as you follow a couple golden rules…
Love in the Tail
"…we’re starting to shift from being passive consumers to active producers. And we’re doing it for the love of it. (The word ‘amateur’ derives from the Latin amator, ‘lover,’ from amare, ‘to love’)"
Passion is everything. (We may have mentioned this in past summaries!) What amateur filmmakers don’t have in the way of big name stars or professional polish they make up for in raw passion. As human beings, we’re drawn to people and companies who love what they do. Their enthusiasm and optimism makes them virtually irresistible.
With a virtually endless number of niche markets waiting to be filled, why on earth would you get involved in one you’re not passionate about? Passion can’t be manufactured. If you want to compete with the leaders, you truly need to love what you do. Love for your work emboldens your spirit. It encourages you to experiment, to play. In the past, you could get away with passionless product creation or impersonal customer service, simply because your customer didn’t have a whole lot of alternatives. Those days are gone. They want the variety, and it’s available to them. The important factor to remember is that people want ever increasing personalization and uniqueness. If you’re in a niche that works, don’t water down your message because you think it might attract you a larger audience. Your audience is the people who care as much as you do. They’re out there, I promise.
Whatever You Do, Do It Well
"At best, a Long Tail marketing strategy, focused on stimulating word of mouth among influential consumers, can just create awareness. If the product is no good, no amount of emailing is going to keep it from being savaged or ignored."
The short head of the graph above – the hits – will always exist. There will forever be products and services that have widespread appeal and therefore “head of the curve” sales numbers. What the web is doing, though – and doing remarkably effectively – is allowing us to distinguish the truly exceptional (and therefore genuinely hit worthy) from the highly marketed, both in the short head and the long tail. Through blogs, customer reviews, user feedback and a myriad of critics (both amateur and professional), we’re now able to “pull back the curtain” and understand if any given product truly is worth the hype. “Highly marketable” products are rapidly losing their stranglehold on the head of the curve. With virtually limitless variety available, consumers are becoming more selective. In other words, they’re holding out for better options – options that appeal to them specifically, rather than just accepting a bland, mediocre product because it’s the only one available.
What are you providing to the world? Is it noteworthy? Would you consider your contribution (or that of your company) more “quality” or more “hype”? Better yet, what would your customer consider you? These days, no amount of PR can save you from a lousy product; you’re either providing value, or you’re on your way out.
Joining the ranks of influential business thinkers like Jim Collins, Seth Godin and Malcolm Gladwell, Chris Anderson uses his revolutionary book, The Long Tail to remind us, yet again, that we live in an unprecedented time of change and opportunity. Change in the way we buy, the way we sell and the way we interact throughout the process. It’s true – a lot is changing, and at an unbelievable rate. And yet… and yet, the fundamentals remain the same. Create something of value; create it with passion, and the world will respond. The classics are forever.