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Executive Times |
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2006 Book Reviews |
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The Long
Tail: Why the Future of Business Is Selling Less of More by Chris
Anderson |
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Rating: |
***** |
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(Outstanding Book: Read It Now) |
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Click on
title or picture to buy from amazon.com |
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Niches I’ve been enthralled
by the possibilities of mass customization and narrow cast marketing for
decades. Fellow enthusiasts of exploiting niches will salivate over Chris
Anderson’s book, The Long
Tail: Why the Future of Business Is Selling Less of More. Thanks mostly
to the Internet, we live in a world where almost everything is available to
almost everything, and even the smallest needle can be found in the largest
haystack, thanks to refined search capabilities. Product marketers can
segment offerings, and can sell lower volumes of more discrete products. The
concept is a simple one, and The
theory of the Long Tail
can be boiled down to this: 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. In an era without the constraints of physical shelf
space and other bottlenecks of distribution, narrowly targeted goods and
services can be as economically attractive as mainstream fare. But that’s not enough.
Demand must follow this new supply. Otherwise, the Tail will wither. Because
the Tail is measured not just in available variety but in the people who
gravitate toward it, the true shape of demand is revealed only when consumers
are offered infinite choice. It is the aggregate sales, use, or other
participation of all those people in the newly available niches that turns
the massive expansion of choice into an economic and cultural force. The Long
Tail starts with a million niches, but it isn’t meaningful until those niches
are populated with people who want them. Collectively, all of this
translates into six themes of the Long Tail age: 1. In
virtually all markets, there are far more niche goods than hits. That ratio
is growing exponentially larger as the tools of production become cheaper and
more ubiquitous. 2. The
costs of reaching those niches is now falling
dramatically. Thanks to a combination of forces including digital distribution,
powerful search technologies, and a critical mass of broadband penetration,
online markets are resetting the economics of retail. Thus, in many markets,
it is now possible to offer a massively expanded variety of products. 3. Simply
offering more variety, however, does not shift demand by itself. Consumers
must be given ways to find niches that suit their particular needs and
interests. A range of tools and techniques—from recommendations to rankings—are
effective at doing this. These “filters” can drive demand down the Tail. 4. Once
there’s massively expanded variety and the filters to sort through it, the
demand curve flattens. There are still hits and niches, but the hits are
relatively less popular and the niches relatively more so. 5. All
those niches add up. Although none sell in huge numbers, there are so many
niche products that collectively they can comprise a market rivaling the
hits. 6. Once
all of this is in place, the natural shape of demand is revealed,
undistorted by distribution bottlenecks, scarcity of information, and
limited choice of shelf space. What’s more, that shape is far less hit-driven
than we have been led to believe. Instead, it is as diverse as the
population itself. Bottom line: A Long Tail is
just culture unfiltered by economic scarcity. To whatever
degree you’re involved in production or distribution, the concepts contained
in The
Long Tail will have implications for how you operate. All the more reason
to read it now, and think about what it means for you and your business. Steve Hopkins,
October 25, 2006 |
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The recommendation rating for
this book appeared in the November 2006
issue of Executive Times URL for this review: http://www.hopkinsandcompany.com/Books/The
Long Tail.htm For Reprint Permission,
Contact: Hopkins & Company, LLC • E-mail: books@hopkinsandcompany.com |
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