The Long Tail

1. By Mantaza Assyaed (AKA MINTY)
The Long Tail

2. 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.

3. Before the Introduction of Long Tail
The 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.

4. The driving forces behind the
long tail phenomena
In 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.

5. Rules of success for using the long-
tail
Successful 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.

6. Consumers Variety of choices
Consumers currently face the biggest explosion of variety in history. To take just a few
representative examples:
 The advertising firm OMD has estimated there are 19,000
variations 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 2
million songs which can be downloaded for listening in digital
format.

7. 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.

8. 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.

9. 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.

10. Benefits & Drawbacks
Benefits:
Increases target Markets
More products on offer to consumers
Selling Less of more = increase on profitability
Reduces the cost of storage and distribution
Drawbacks:
 Internet Access is required for both consumers and Businesses
Businesses need an e-commerce/website
Confusion of the distinction between the interpretations of where the "head"
and "tail" begin.

11. The future of The Long Tail
Things 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?

12. References
http://ministrynetconference.com/wp-content/uploads/2009/10/The-Long-Tail.pdf
www.novelr.com/2008/02/08/the-long-tail-and-o...

13. ANY QUESTIONS