A Better Workplace

What Is The Long Tail Theory?

Retailers are no more constrained by shelf space due to the internet revolution, globalization, and unlimited virtual shelf space, and they can stock a large number of products. As a result, consumers now have more choices and sellers can stand out by catering to a niche or micro-niche.

y Chris Andersones can benefit from this approach by stocking a variety of individualized, niche items. This approach is known as the long tail.

The concept of the long tail was introduced by Chris Anderson, editor of Wired magazine, in his book named ‘The Long Tail: How Endless Choice is Creating Unlimited Demand’.

What Is the Long Tail?

The long tail is a statistical distribution pattern in which a higher proportion of occurrences appear further out from the distribution’s center.

This business strategy enables companies to make considerable profits by selling low volumes of hard-to-find merchandise to a large number of customers rather than selling large volumes of a small number of popular items.

“For too long we’ve been suffering the tyranny of lowest-common-denominator fare, subjected to brain-dead summer blockbusters and manufactured pop. Why? Economics. Many of our assumptions about popular taste are actually artifacts of poor supply-and-demand matching—a market response to inefficient distribution.”

– Chris Anderson

Anderson believes that now that people can find and afford products and services that more closely fit their unique interests and needs, they will move away from homogenized hits.

Sellers can create more demand for a greater number of unique items. They can focus their efforts on inventory management and sell a variety of less popular products in order to gain as much profit from the long tail as the hit head.

As a result, the wise company can sell fewer products in bulk rather than a great quantity offered to a limited number of customers.

Anderson forecasts that the many small markets in goods that do not sell well enough for traditional retail and broadcast distribution will collectively exceed the size of the existing market in goods that do cross that economic obstacle. In other words, as time passes, the shaded region beneath the curve will grow larger than the white area.

Chris Anderson explains his theory of “The Long Tail,” in the following videos:

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