The Longest Tail that started it all

So, when I was first asked to read and develop a book summary for the novel The Long Tail in my E-Marketing class, I was instantly put off. I mean, really, a book report -in University? The only novels I read for book reports remained half-finished and Coles Note’d. However, as this remains a turning point in my life, where I try to put forth some genuine effort, I decided I’d exercise some discipline and give it a shot.

Thankfully, to my surprise, the book was amazing. Bound within were some of the most thought provoking concepts and material I could have ever imagined for a school-book. In fact, this novel remains one of the main contributing factors that prompted me to start and believe in this site!

Anyways, I thought I’d kill two birds with one stone and use my book summary as a post. Read on below if you are brave. But I warn you, it’s a little high-brow for those not in Marketing. And it’s Long.

The Long Tail presents an interesting look at how the digital age has greatly affected our lives, businesses, and choices. Once forcedly subject to tangible storefronts, products, and services, we are now moving towards a world in which the products that we consume are not only easily accessible, but strikingly intangible. As consumers, this new digital era has not only provided us with greater freedoms, but also granted us higher degrees for making choices.

Prior to this digital era, the only consumption choices we were subject to were those within a defined physical radius around us. Culture was vastly rural, and to be cultured was an unthinkable dream left up to the rich and powerful, resulting in the lesser’s own closed and narrow mindedness for lack of better options. Now, however, thanks to the digitization process and the wonders of the internet, we are able to access and become accustomed to different cultures around the world from the comfort of our computer chairs. We have moved away from being a society of one mass culture, the water cooler society, to a society filled with subcultures and a market full of niches –the niche economy.

Following the don of the digital age and the boom of highly permeable information, comes the “free and highly accessible production tools” revolution. Through these tools, we are each now able to develop and produce products and services on our own that would once have required a capital-intensive firm. As such, we are now better equipped to produce our own songs, books, and videos, as well as sell them with a greater degree of freedom, thanks to services such as iTunes and the like, thereby transforming us further in to a society of producers.

As this society of producers continues to countlessly develop products in different product categories: entertainment, physical goods, software, etc., we are presented with an exceedingly longer Tail. In its simplicity, the Long Tail characterizes the extended life in each product or information’s Life Cycle (PLC) due to the digital age’s capabilities. Where we were once led to believe that, due to the rise and fall of “Hits”, the PLC of a product would eventually reach zero, we are now beginning to realize that this is not the case. Thanks to the wonders of digitization, products are able to find infinite markets around the globe on infinite shelf spaces. As an example, the notion of listening to Beethoven’s 9^th Symphony may seem antiquated to us, but around the globe, individuals may find his music to be both innovative and new.

Comfortingly, unsuccessful or dying products may now find new or sustained life in the Long Tail. Music that was once considered old, normally pulled off store shelves, is now able to find never-ending life on the online shelves of stores such as iTunes and Rhapsody. Unquestionably, products that are able to achieve digitization are able to experience this never-ending life. Though this may seem bleak for products incapable of digitization, thanks to sites such as eBay and Amazon which take advantage of Long Tail economies through hybrid retailing, physical products are better capable of experiencing extended, but not infinite, life as well.

Hybrid stores such as eBay and Amazon, incorporating both digital and non-digital aspects towards their retailing, allow individuals to place unwanted products up for sale; thereby continuing the life of these products in a digital garage-sale of sorts. Ultimately, endeavours toward the utilization of digital shelf space and e-commerce have helped businesses in reducing their holding costs, contributing to higher cost-savings which may then be tickled down to the end consumer.

Interestingly, the Long Tail also hints at the possibility of a market existing for almost any product -one simply has to find and access the correct niche. Simplistically, a niche-product is a product that one finds valuable when others do not.  Through the digital age’s uncanny ability to disseminate information, both over-saturated and uncommon products have been able to find new and unique markets worldwide. Once unimaginable, almost laughable, product offerings such as 3D printers and White-House retail stores are now conceivable, having found their correct niche-market within the Long Tail. This does not suggest, however, that all products will survive, as markets may be unfit to produce sustainability, it simply suggests that all products may provide some value to some market within the Long Tail.

Evidently, the most successful of companies have learned how to access the Long Tail and build their core offering around this phenomenon, thereby creating sustainability for themselves. Companies such as Google, Lego, and eBay, each access the Long Tail’s myriad of products and information, awarding them pristine market power and leverage. With all of the Long Tail information featured on YouTube, it is no wonder Google had purchased it. In keeping with Google’s utilization of Long Tail information, Google allows users to search the web with striking accuracy in order to find information suiting that individual’s particular niche. Ultimately, all of this has contributed to Google becoming one of the greatest advertising embodiments of all time.

The author also provides a list of nine rules for businesses wishing to operate in the Long Tail. Rule (1) Move inventory way in or way out. What the author means by this is that, unlike traditional retailers such as Sears and Wal-Mart, one should reduce the amount of inventory that they carry, or rather; take on more characteristics reminiscent of a distributor as opposed to a retailer. Rule (2) Let the customers do the work. Rather than develop you own products, utilize peer-production readily available in the digital era. Rule (3) One distribution does not fit all. Some consumers want to shop online and some consumers want to shop at physical locations. Multiple-distribution methods allow for achieving the biggest possible market, taking advantage of both physical and digital distribution. Rule (4) One product does not fit all. We are living in an age where consumers highly benefit from and desire the effects of microchunking. All aspects of a product, for example a CD, may not be appealing to a consumer. Therefore, break it off into chunks and sell its component parts -song by song. Rule (5) One price doesn’t fit all. Price elasticity highly influences the purchasing decisions of individual consumers. Therefore, for more popular items, one should charge more, and for less popular items, less. Rule (6) Share information. Transparency can help to build trust in consumers at no cost. We each expect information to be widely available to us in this day and age. As such, undisclosed information puts consumers at unease. Therefore, practice high transparency. Rule (7) Think “and” not “or”. Before, it was a choice between this “or” that. However, the right strategy has revealed itself to be “offer everything”. Not only does it provide consumers with more options, creating a greater sense of value, it is much easier for businesses when deciding between “and” versus “or”. Rule (8) Trust the market to do their job. Filters and ranking systems are the voice of the market. Rather than constantly issuing guess-work, Filters and Ranking systems serve as the feedback loop for online Word of Mouth. Through these tools, marketers and businesses are now better able to predict, measure, and respond to the trends of the market more efficiently.  Finally, Rule (9) Understand the power of free. Free is a powerful tool for attracting potential consumers. The issuance of free is best utilized when executed in concert with premium options, giving rise to the Freemium model -a model in which consumers may purchase the initial version of a product for free, and then are highly encouraged to purchase the upgradable features for a price.

As consumers, the Long Tail has provided us with greater choice. Gone are the days of the water cooler society, replaced instead by micro-markets, sub cultures, and niches championing consumer individuality. After having examined the Long Tail, two themes present themselves to be most clear, (1) Make everything available, and (2) Help me to find it.

March 2, 2012 | Categories: Believe me, I'm a marketer! [:MARKETING], Good Reads [:BOOKS] | Leave A Comment »