July 20, 2006

Staff Picks: Catherine Doyle's Review of The Long Tail

By: 800-CEO-READ @ 2:30 PM – Filed under: Management & Workplace Culture

The Long Tail
by Chris Anderson
The future of business is selling less of morehave you updated your business plan lately? Chris Andersons case for the death of mass market culture consists of three prongs:
  1. The tools of production are cheaper than everyour computer can be your editing suite, your design studio, your book production facility. You can mark your works to as small a group as you like to the world.
  2. Internet sales have removed the need to have expensive retail shelf space to display items for sale. Its much cheaper to design a website and hire a warehouse than it is to rent space in a mall. Were no longer limited by the ability of the Gap to stock blue jeans in womens sizes 2-10 (well, it seems that way sometimes!) A much wider range of fashions can be warehoused and send on demand to customers. While sizes and colors outside the normal distribution may not be best-sellers, they will sell enough to make a substantial profit for the manufacture.
  3. Filtering mechanisms have become robust enough to help consumers make informed decisions on the multitude of options now available to them.
All of these items combine to lead to the death of the best-seller and the formulas which have worked for us for so long. Eighty percent of our sales will no longer come from 20% of the goods available. What will replace this is a system by which consumers can acquire goods and services that are much more in line with their exact tastes and preferences? Examples from music services, such Rhapsody, show the Long Tail in action as consumers use the search functions to narrow down their choice of music down to very specific format types. The low cost per track and reviews give customers the confidence to try something new. The end result is the ability to purchase music that youre really interested in, not the entire CD with the two songs that really werent ready for prime time. Many of the examples in this book deal with intellectual property, such as music, movies, and books, which can be easily digitized and sold in chunks. Lest you think that this theory doesnt have wider application, Anderson cites the case of Kitchen Aid, which offers a much wider variety of colors of its signature mixer on its website than it does through retail outlets. Who would have thought that tangerine orange would have been a best seller for them? Anderson was an editor for the Economist before becoming editor for Wired and it shows in his style. This book is among the most readable business book thats come across my desk lately. Buy it or borrow it from your local library, you wont regret the time youve invested. ----- Reviewed by Catherine Doyle