Saturday, February 21, 2009
The Myth Of The Long Tail
Do you know about the long tail? The Long Tail is an economic theory designed by Chris Anderson that defines the characteristic of online retailing and why it is so different from traditional retailing.
One of the fundamental idea, is that the Pareto law, is not applicable to online stores.
Instead of having 80% of a store's sales coming from 20% of the products it distributes, an online retailer would have a lot of niche markets that would represent its main sales.
Here is a video of Chris Anderson explaining the Long Tail.
The Register is hitting hard the theory in an article called The Long Fail. It underlines some approximation of the theory, and points out the weaknesses of the idea with economical facts.
Is the Long Tail a myth? It really doesn't exist. I believe that the long tail concept explains well the differences between what an online retailer can do versus a traditional one. Because online stores can have an unlimited selection of products (since it is not limited by no shelves size), online retails can delevop some niche markets that would provide them competitive advantages. That is the real idea of the long tail.
It might be deceiving to see that the Long Tail is not a concrete economical theory, but, economical theories are anyways no 100% sure. I believe it is still a good indication for online retailers to work on their product selection.
What do you think about it? Do you still have faith in this long tail. Do you know some examples where it is applicable?