Monday, April 11, 2011

03 A Short History of the Long Tail/ 04 The Three Forces of the Long Tail

The origins of the Long Tail go back to the first giant centralized warehouses in the late nineteenth century. The first to utilize this were Sears and Roebuck and Co through the mass distribution of their “Wishbook” which acted as the first viral marketing campaign. Through their use of warehousing and a unique network of suppliers, sears beckoned the beginning of the superstore.

Just as the key to the early success of the supermarket was the shopping cart, the automobile, free parking lots, and mechanical refrigerators in the home and store, resources are key. Compared to Sears era of massive centralized warehouses that contained everything, the wave of catalogs was more about targeted niches and with color printing technology, niche retailers found a way to reach mainstream audiences by printing magazine-quality catalogs showcasing their products; but what the personal computer could do took postal shopping to the next level.

The internet provides a way of offering a catalog to everyone- with no printing and no mailing required- and it also presents a way to eliminate most of the physical barriers to unlimited selections. The unlimited shelf space of the web retail allows them to offer their customers more variety and convenience, cementing brand loyalty with current customers and extending to new customers who may or may not be near a physical store location

Our culture and economy are increasingly shifting away from a focus on a relatively small number of hits (mainstream products and markets) at the head of the demand curve, and moving toward a huge number of niches in the tail. There are 6 themes to the Long Tail age:
  1. there are far more niche goods than hits
  2. the costs of reaching those niches is falling dramatically, allowing more variety
  3. new tools and techniques, or filters, to help consumers find niches can drive the demand down the tail
  4. with more variety, the demand curve flattens
  5. there are so many niches that collectively they can comprise a market rivaling the hits
  6. the natural shape demand is revealed through the other steps.
Anderson also sees there being three driving forces to the long tail which can be understood through the table at the top.

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