Long tail

Long tail in the context of business and marketing refers to the strategy of selling a large number of unique items with relatively small quantities sold of each (the "long tail")—in contrast to selling a small number of popular items in large quantities (the "head"). The term was popularized by Chris Anderson in an October 2004 Wired magazine article, in which he mentioned Amazon.com, Apple's iTunes Store, and Netflix as examples of businesses applying this strategy. Anderson elaborated on the concept in his book, The Long Tail: Why the Future of Business is Selling Less of More (2006).

Concept

The long tail concept has its roots in statistical distributions (such as Zipf's law, Pareto distribution, and power laws), where a high-frequency or high-amplitude population is followed by a low-frequency or low-amplitude population which gradually "tails off" asymptotically. In retail and online marketing, the long tail is seen when a large inventory of products sells in small quantities, complementing the bestseller or "hit" items that sell in large volumes.

Applications

1. 1. 1. Online Retail###

Online retailers like Amazon.com leverage the long tail by offering a wide variety of items, including obscure books or media not available in typical brick-and-mortar stores. This strategy allows them to cater to niche markets and individual preferences, significantly expanding their customer base.

1. 1. 1. Digital Media and Streaming###

In digital media, services like the iTunes Store and Netflix utilize the long tail by providing access to a vast selection of music tracks, movies, and TV shows, including rare and less-known content. This approach not only satisfies diverse consumer tastes but also encourages the discovery of new content.

1. 1. 1. User-Generated Content###

Platforms such as YouTube and Wikipedia embody the long tail principle by hosting a vast amount of user-generated content that caters to a wide range of interests and niches. This inclusivity attracts a broad audience and fosters a rich ecosystem of content.

Implications

The long tail model has several implications for businesses and consumers. For businesses, it suggests that by expanding their product range to include niche items, they can tap into new markets and increase overall sales. For consumers, it means greater choice and the ability to find products that closely match their interests and needs.

Challenges

Despite its benefits, the long tail model presents challenges, such as inventory management, distribution logistics, and the need for sophisticated recommendation systems to help consumers discover niche products.

See Also

• Chris Anderson
• Market segmentation
• Niche market
• Pareto principle