Most Helpful Customer Reviews
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1 of 1 people found the following review helpful:
5.0 out of 5 stars
Simple concept yet important consequences, 31 Jan 2009
This is an extremely simple yet important book about the effect of digital goods and their availability via the internet on the economics of product variety.
The basic premise, the author argues quite convincingly and correctly, is that digital goods (e.g.: music files) combined with virtually free storage allows businesses, and retailers in particular, to have a much larger variety of products to sell than regular businesses that depend on physical goods that need to be brought in, stored in a warehouse, and shipped out to customers. The internet does the rest: it guarantees a huge number of consumers whose combined needs make it easier to sell all kinds of products. This is why it's called the Long Tail: what used to be a large number of unsold products is now getting both larger (more products) and more profitable (higher sales of these 'niche' products).
Traditional businesses focus on getting as much value as possible from a small number of products, therefore restricting consumer choice. They focus on what's called the 'top' products. In fact, though they may be getting more sales from a small number of products, they are losing a lot of money because they're not carrying a large enough variety of products. The author also takes on Barry Schwartz's 'The Paradox of Choice' by arguing that more choice doesn't have to be detrimental to quality of life (as Schwartz argues) because Internet-based businesses allow consumers to easily filter and compare products in order to make a choice. I think here the jury's still out and only time will tell in the long run if a huge variety of available products is a good or a bad thing for modern life.
The concept of the Long Tail has revolutionised modern retail. If you go back to 10 or 15 years ago and compared retailers you'd find huge differences.
I quite enjoyed reading this book. Don't pay too much attention to what other reviewers might say about how simplistic this book is: it may be simple, but not simplistic, and regardless of how simple is the concept, it is important to understand the mechanics and consequences of the Long Tail.
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1 of 1 people found the following review helpful:
5.0 out of 5 stars
Here's the latest update on some Long Tail developments, 26 Jan 2009
Note: The review that follows is of the revised and updated edition of a book that was first published in 2006. It offers essentially the same information and insights except that Anderson has added a new chapter on marketing, one in which he explains "how to sell where `selling' doesn't work." More about this chapter later.
In the October 2004 issue of Wired magazine, Chris Anderson published an article in which he shared these observations: "(1) the tail of available variety is far longer than we realize; (2) it's now within reach economically; (3) all those niches, when aggregated, can make up a significant market - seemed indisputable, especially backed up with heretofore unseen data." That is even truer today than it was when The Long Tail was first published years ago. The era that Anderson characterizes as "a market of multitudes" continues to grow in terms of both its nature and extent. In this book, Anderson takes his reader on a guided tour of this market as he explains what the probable impact the new market will have and what will be required to prosper in it.
According to Anderson, those who read the article saw the Long Tail everywhere, from politics to public relations, and from sheet music to college sports. "What people intuitively grasped was that new efficiencies in distribution, manufacturing, and marketing were changing the definition of what was commercially viable across the board. The best way to describe these forces is that they are turning unprofitable customers, products, and markets into profitable ones." Therefore, the story of the Long Tail is really about the economics of abundance: "what happens when the bottlenecks that stand between supply and demand in our culture start to disappear and everything becomes available to everyone."
If I understand Anderson's most important points (and I may not), they include these:
1. Make as much as possible available to as many people as possible.
2. Help them to locate what they need, quickly and easily.
3. Offer maximum inventory only online.
4. Customize supply chain in terms of niche markets
5. Maximize its efficiencies and economies (especially inventory control, order processing, and distribution,)
5. Be customer-driven in terms of "crowdsourcing"
6. Have strategy that separates content into its component parts (i.e. "microchunking")
7. Have a pricing strategy that is "elastic" (i.e. based on the ROI of fulfillment per product per niche).
8. Have an open source business model for information sharing.
9. In markets where scarcity exists, "guesstimate" costs, margins, sales, profits, etc.
10.Where there is abundant competition, let those markets "sort it all out."
These and other points can guide and inform decision makers as they struggle to compete profitably during the era of "long-tailed distributions," when culture is unfiltered by economic scarcity and high technology is turning mass markets into millions of niches. Anderson provides invaluable advice with regard to how minimize the cost of reaching, penetrating, and then developing a multiple of niche markets. The paradigm has shifted from selling more in fewer markets to selling less in more markets but also, key point, selling as much as possible within as many segments as possible -- and prudent -- within those markets.
With regard to the new chapter, Anderson devotes much of his attention to online marketing and suggests that critical issues to address include these:
Who's influential "in our space (and how we know)"
Who/what influences them
How to get Digged
Effective blogging
Using beta-test invite lists
The art of begging for links
"Link bait" (e.g. stunts, contests, gimmicks, memes)
How to view the Web? "Forget it as a marketplace of products, and instead think of it as a marketplace of opinion. It's the great leveler of marketing. It allows for niche products to get global attention. Most products will be sold offline, as they always were. But in years to come, more and more products will be marketed online, taking advantage of Web methods to fine-slice consumer groups and influence word of mouth more effectively than ever before in history. Not all industries lend themselves to an infinite variety of products, but all industries have an infinite variety of customers. Finally we can treat them like the individuals they are. It's the sunset of the thirty-second spot."
There are several reasons why Anderson believed there is a need for a revised and updated edition. Here are two. Because the earlier version became a bestseller, it attracted lots of attention, generating an abundance of discussion of his core concepts. Also, the process of adopting his ideas (many of which at first seemed counterintuitive, if not precious and naive) was complicated by the globalization of culture. Focus shifted to distributed audiences around the world. Anderson was asked for additional examples of Long Tail effects outside the digital realms of media and entertainment. He certainly could not cover all of the extensions in fashion, travel, organic and "artisanal" food, and even alcohol as indicated by -- to cite one example -- Anheuser-Busch's embrace of niche beers, the establishment of Long Tail Libations, and the increased number of beers from 26 brands in 1997 to 80 in 2007. Given the fact that change continues to be the only constant in the global business world, think of this revised and updated edition as only the latest update on some Long Tail developments thus far.
Presumably the tail will continue to lengthen in months and years to come.
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