The long tail… E-business assignment by Lina Benseghir
What’s the concept about ?
The long tail is a new business model , introduced by Chris Anderson, regarding mostly the entertainment industry.
How does it work ? It is based on providing each consumer with the a large choice , without focusing on what will please the majority , but rather on opening various possibilities so as to suit as many tastes & individual choices as the online media enable (which means quite a lot) .
The individual matters more than the mass
A picture is worth a 1000 words…
How is it different than 'traditional' retail concepts?
Traditional retail concepts have to deal with limited resources (space, time & money).
To be profitable, it has to reflect what pleases the majority (the so called «hits« ) which ends up narrowing customers« minds & cultural knowledge (by «imposing « a conformist behavior).
… New media & post-modern retail concepts (the long tail)
Main characteristics :
Lower cost (hosting web pages)
Unlimited resources (the storage space is virtual)
Emphasizing word-to-mouth to promote the «misses« (not so popular items)
"The biggest money is in the smallest sales". Kevin Laws
Revenue comes from the variety of choice & the techniques to " guide" consumers through the purchasing process
What issues will an e-business face when using the Long Tail as the method for growing revenue ?
Offering the largest choice " at your fingertips " (from popular to independent music or movies for instance)
Basing the strategy on very low prices (to discourage piracy)
Memorizing consumers« taste to lead them through their daily maze of choice (both handy & time saving for them)
Combining both long tail & standard retail to remain profitable