This document discusses the "long tail effect" identified by Chris Anderson in 2004. The long tail effect describes how products with low demand or sales can collectively make up a significant market share if the store or distribution channel carries enough products. With an internet marketplace having virtually unlimited shelf space and no physical constraints, niche and obscure products can become easily available and formerly sub-economic products and customers can become a major market. Examples are given of how streaming services and online retailers carry much larger inventories than physical retailers, and derive significant portions of their sales and profits from niche products in the "long tail" rather than just top sellers. The advantages of targeting the long tail include lower competition and higher customer intent for niche products and topics.

1. THE LONG TAIL EFFECT

2. OUTLINE
Who identified first?
What is a long tail?
What are the advantages of it?
Examples from the leaders in the market
How to practice it in the real market

3. WHO IDENTIFIED?
• Chris Anderson, Wired Editor, October 2004
• The Long Tail: Why the future of business is
selling less of more, June 2006

4. • Products that are low demand or have low sales volume can
collectively make up a market share that rivals or exceeds the
relatively few current best sellers and block busters, if the
store or distribution channel is large enough.
WHAT IS A LONG TAIL?

5. Hidden majority

6. • A solution to the mass supply and demand culture of the 21st
century.
• A market place without the limits of a conventional retailer (infinite
shelf space, no physical constraints)
• A market that has allowed obscure, niche products to become
easily available
• Formerly sub-economic products and customers are suddenly
becoming the biggest market of all.
• Automated suggested products allow niche products to be seen
and increase customer satifaction
ADVANTAGES OF LONG TAIL

7. WHAT FACTORS DRIVEN TO
A LONG TAIL?

8. INVENTORIES:
PHYSICAL VS. INTERNET RETAIL
Total Inventory (books)
2,300,000
130,000
Amazon Barnes & Noble
Total Inventory (songs)
39,000
735,000
Rhapsody Walmart
Total Inventory (movies)
25,000
3,000
Netflix Blockbuster

9. SALES DISTRIBUTION:
HEAD VS. TAIL
Rhapsody
% Sales from Long Tail
22%
78%
Amazon
% Sales from Long Tail
57%
43%
Netflix
% Sales from Long Tail
20%
80%

10. PARETO VS. LONG TAIL
80%
20%
20%
80%
100%
Products Revenue Profit
Brick and mortar
25%
50%
25%
Revenue
33%
33%
33%
Profit
8%
90%
Products
2%
Long tail retailers
Internet
only
inventory

11.  Low competition
 Low search frequency
 High searcher intent
LONG TAIL IN SEO

12. GET SPECIFIC, GET FOUND!

13. LONG TAIL IN BUSINESS
Make everything available
Variety in product choices (ex. Amazon)
Cut the price in half. Now lower it
No packaging, no manufacturing (ex. iTunes)
Help me find it
Recommendations, Collaborative filtering (ex. Netflix)

16. THANK YOU